hoist group holding intressenter ab · 2020. 6. 9. · hoist group holding intressenter ab 3 crn...

Hoist Group Holding Intressenter AB CRN 559094-0689

ANNUAL REPORT FOR THE

FINANCIAL YEAR 2019

Hoist Group Holding Intressenter AB 2 CRN 559094-0689

A word from the CEO ........................................................................................................................................................ 3 Management Report .......................................................................................................................................................... 4 Group overview ................................................................................................................................................................. 6

Group balance sheet ..................................................................................................................................................... 10 Statement on changes in equity .................................................................................................................................... 12

Group statement on cash flows ....................................................................................................................................... 13 Parent company income statement ............................................................................................................................... 14 Parent company balance sheet ..................................................................................................................................... 15 Parent company report on changes in equity ................................................................................................................ 17 Parent company's report on cash flows ......................................................................................................................... 18

NOTES ............................................................................................................................................................................ 19 Note 1 General information ........................................................................................................................................... 19 Note 2 Summary of important accounting principles ..................................................................................................... 19 Note 3 Financial risk management ................................................................................................................................ 31 Note 4 Important estimates and judgments in applying the Group's accounting principles ........................................... 36 Not 5 Segment information ............................................................................................................................................ 37 Note 6 Other operating income ..................................................................................................................................... 39 Note 7 Audit fees ........................................................................................................................................................... 40 Note 8 Employee benefits ............................................................................................................................................. 41 Note 9 Financial income and financial expenses .......................................................................................................... 44 Note 10 Income tax ....................................................................................................................................................... 45 Note 11 Intangible assets .............................................................................................................................................. 48 Note 12 Tangible assets ................................................................................................................................................ 51 Note 13 Right-of-use assets .......................................................................................................................................... 54 Note 14 Operational leasing .......................................................................................................................................... 55 Note 15 Shares in Group companies ............................................................................................................................ 55 Note 16 Financial fixed assets ...................................................................................................................................... 57 Note 17 Inventories ....................................................................................................................................................... 57 Note 18 Accounts receivable ......................................................................................................................................... 58 Note 19 Prepaid expenses and accrued income ........................................................................................................... 59 Note 20 Cash and cash equivalents .............................................................................................................................. 59 Note 21 Share capital and other contributed capital ...................................................................................................... 60 Note 22 Borrowing......................................................................................................................................................... 61 Note 23 Other provisions ............................................................................................................................................... 62 Note 24 Other liabilities ................................................................................................................................................. 62 Note 25 Accrued expenses and prepaid income ........................................................................................................... 63 Note 26 Pledged assets and contingent liabilities ......................................................................................................... 63 Note 27 Acquisitions...................................................................................................................................................... 64 Note 28 Related party transactions ............................................................................................................................... 68 Note 29 Divested operations ......................................................................................................................................... 69 Note 30 Non-cash items ................................................................................................................................................ 69 Note 31 Events after the balance sheet date ................................................................................................................ 70 Note 32 Appropriation of profits ..................................................................................................................................... 70 Note 33 Appropriations .................................................................................................................................................. 70

Signatures ....................................................................................................................................................................... 71 Auditor’s Report ............................................................................................................................................................ 72

Sustainability ................................................................................................................................................................... 76 Auditor’s report on the statutory sustainability report ....................................................................................................... 79 Corporate governance report Hoist Group Holding Intressenter ..................................................................................... 80 Auditor’s report on the Corporate Governance Statement .............................................................................................. 83


A word from the CEO

2019 was a successful year for Hoist Group. We secured new deals with many new customers in all markets and all product groups. The level of innovation was high for all of the groups' software and the Group also acquired Hotel Engine which is specialized in booking software and gifting cards online. Hoist Group also successfully reprofiled to a company focused almost entirely on data. This was possible in part by benefitting from access to customer insight and data acquired through the company's wide variety of services and products. This allowed us to launch a new Dashboard-service helping hotel-owners to make pro-active business decisions. This service was launched at the end of the year and was very well received. Our revenue increased by 9% during 2019 and adjusted EBITA was improved. Negative effects on the gross margin because of temporary changes in our product mix were offset thanks to careful cost-control and investments in product innovation, amongst them the acquisition of Hotel Engine. During the start of 2020, we have seen a continuation of this positive trend with increasing sales and a larger order stock compared to the two first months of previous years. Beginning March, the global hotel markets, amongst them Hoist Group's markets in EMEA, have temporarily closed due to the global outbreak of Covid-19 with travel restrictions and other restrictions implemented by national authorities. It is impossible at this point to predict how long the shutdown due to Covid-19 will last. Hoist Group assesses that it will not exceed three months. This still means that many decisions regarding systems, product upgrades, redevelopments, and other hotel investments will have to be taken at a later date. The group's prospects are still positive, even though 2020 will not be a year of growth due to Covid-19. The current market situation also creates further possibilities for consolidation. As a market leader, Hoist Group is presently evaluating a couple of interesting acquisition opportunities. Hoist Group has taken immediate and powerful actions to maintain liquidity as well as to reach acceptable financial goals, including putting all 500 employees on temporary part-time jobs and voluntarily decreasing the salaries of management personnel by 20%. Beyond that, other costs have been cut considerably and investments been put on hold. Hoist Group assesses that business will be back to normal from September.


Hoist Group Holding Intressenter AB hereby submits its annual report for the financial year 2019.

Management Report

Parent company Hoist Group Holding Intressenter AB, corporate number 559094-0689, manages subsidiaries that sell technical systems with integrated software to hotels and government-controlled businesses. The company was registered in December 2016 and is the parent company of Hoist Group Holding limited company with subsidiaries.

Information about the business The consolidated account statement includes all companies owned directly and indirectly by Hoist Group Intressenter AB according to the statement in Note 15. The companies in the Hoist Group are engaged in the development, sales and renting of IT-systems and software and related services and support specifically for the hotel industry. The Group conducts in-house development regarding the software implemented in the systems; Hotsoft (booking system), Serviator (back office system), Fusion IPTV (TV system), Fusion Wi-Fi (wireless Wi-Fi system) and Fusion Mobile Key (lock system). Together, the software forms the Group's Fusion platform that generates business-critical data for profitable hotel operations. The software development is done mainly in the offices in London and Geneva.

Significant events in 2019 The Sixth AP Fund (AP6), through a directed share issue and conditional shareholder contribution in March 2019, provided Hoist Group with 100 million SEK to strengthen the Group's expansion plans. Some employees have subscribed to newly issued shares in the company. On October 1, HotelEngine was acquired, an online platform that integrates with hotel websites to improve the online booking process. The acquisition strengthens Hoist Group in its efforts to help its customers increase the number of direct bookings. In 2019, Hoist Group's Dashboard was launched, which allows the customer to see and measure the performance of their aggregate services in real-time and get a complete overview throughout the guest journey. The product displays data from all digital contact points before, during, and after the stay. Comments on the group result Net sales for 2019 amounted to 1 323.2 million SEK which corresponds to a 9% growth compared with 2018 (1 212.6 million SEK). Hoist Group's adjusted EBITDA (Operating result before depreciation and non-recurring items) amounted to SEK 132.4 million (121.9). Adjusted EBITA (Operating result after amortization of fixed assets, before non-recurring items) amounted to SEK 64.5 M (62.0). EBITDA and EBITA have been affected by non-recurring costs of SEK -54.5 million (-36.4), of which SEK 38.0 million is related to previous years, while SEK 16.5 million derives from activities in 2019.

Hoist Group's growth is mainly due to increased sales activity spread across most regions of EMEA. Sales to new customers are expected to lead to increased contract revenue in the long term, which in turn is expected to strengthen the group's future profitability. During 2019, the gross margin decreased slightly in the linear TV-content product area. Through cost control and streamlining of operations, adjusted EBITA has nevertheless improved and the Group is in a good position to make better use of economies of scale. Hoist Group's regions are experiencing strong sales growth in MED, Norway, UKBene, and other markets (which is largely driven by MEA). The French business has undergone a comprehensive adjustment process since the Healthcare business was divested at the end of 2017 and thanks to these adjustments, earnings have gradually improved.


Hoist Group's accumulated order backlog, with estimated delivery in 2020, at the beginning of 2020 amounted to SEK 714 million (679). The Group's net profit amounted to SEK -98.9 million (-175.6) and includes the amortization of customer relationships of SEK 60.2 million (59.4). Comments on depreciation and investments Note 11 and note 12 describe the company's depreciations. Customer relations are amortized over 10 years and depreciation for the year was charged to net profit with SEK 60.2 million. Goodwill increased by a total of SEK 29.7 million during the year. The changes in goodwill consist of acquisitions of Hotel Engine SEK 14.7 million and exchange rate changes SEK 15.0 million. In 2019, MSEK 26.4 was capitalized on research and development costs.

Comments on cash flow and financing Cash flow from operating activities amounted to SEK 61.0 million. Investments in intangible fixed assets amounted to SEK -27.5 million and tangible fixed assets amounted to SEK -11.3 million.

In March 2019, AP6 became a shareholder in the Group and contributed SEK 45.9 million in a new share issue and SEK 54.1 million in conditional shareholder contributions.

During the second quarter, repayment of shareholder loans of SEK 80.4 million was made. As of December 31, 2019, shareholder loans amounted to a total of SEK 51.3 million, including accumulated interest.

During the year, the new share issue was registered to certain employees, and SEK 14.9 million was added to the company.

Comments on the parent company The Parent Company's profit before tax amounted to SEK -7.2 million for the year.

Company funds increased by SEK 0.4 million in 2019, driven by the aforementioned new share issue to, and shareholder contribution from, AP6, as well as a new share issue to certain employees and repayment of shareholder loans. Interest expenses paid during the year amounted to SEK 30.6 million.

Significant events after the end of the financial year During the first quarter of 2020, the Hoist Group discontinued its direct presence in the Baltic countries due to a lack of profitability. The continued presence in the Baltic market will be handled by Hoist Group Finland and through partners.


Group overview

2019-01-01 2018-01-01 2016-12-23

KEY FIGURE 2019-12-31 2018-12-31 2017-12-31*

Amounts in SEK thousands

Income from continuing operations

Net sales 1 323 244 1 212 602 588 531

Operating earnings -50 206 -105 468 10 068

Disposable income and expenses -54 500 -36 351 –

Adjusted EBITDA 132 368 121 874

EBITDA 77 869 87 331 75 738

Adjusted EBITA 64 533 61 973

EBITA 10 034 25 621 38 187

Profit before taxation -97 307 -168 640 -29 396

Profit or loss for the period -98 927 -175 569 54 740

Operating margin, %, EBITDA 6% 7% 13%

Operating margin, %, EBITA 1% 2% 6%

Profit margin, % neg. neg. neg.

Financial situation

Balance sheet total 2 001 951 1 969 441 2 255 850

Equity 817 551 768 501 212 439

Interest-bearing liabilities 610 155 690 023 1 421 612

Return on capital employed 1 427 706 1 458 524 1 634 050

Equity ratio, % 41% 39% 9%

Employees

Average number of employees 471 471 542 *Numbers for 2017 refers only to half of the year when Hoist Group Holding Intressenter acquired Hoist Group Holding AB on June 30, 2017. At the end of the financial year, in addition to the bond loan, the group has long-term confirmed credit facilities totalling SEK 75 million, consisting of a rolling credit. Future development The Group's prospects are still positive, although due to Covid-19, 2020 will not be a growth year. Risks and risk analysis Customers’ ability to pay and the supplier's financial position Noted risks are the customer's ability to pay and the financial position of the suppliers. These areas are monitored on an ongoing basis in financial reporting through credit checks, follow-up of accounts receivable, and reviews of the suppliers' financial situation. The Group's customers’ ability to pay is degraded due to Covid-19 during the period when they have very low utilization rates. The Group has close dialogue with its customers and closely monitors all accounts. Risk management is handled by the CFO in consultation with the CEO and the Board by following guidelines established by the Board. The risk function includes identifying, evaluating, and securing financial risks. This is done in close cooperation with the group's operating units.


Risks related to economic and political conditions in Europe A negative change in economic conditions in Europe or in the market in some other country, which in turn affects the countries or markets in which the Group operates, is likely to hurt the Group's operations. Factors that may adversely affect general market conditions and reduce economic activity in Europe are changes in the political situation, a decline in employment rates, consumer and corporate confidence in the future, household disposable income, housing prices, foreign exchange markets, inflation, and the availability of loans and inflation, borrowing costs, financial market liquidity, and market interest rates. Poor market conditions, reduced economic activity, and changes in the general political situation in Europe can reduce the demand for the Group's products and services, which has a negative impact on the Group's operations, financial position, and earnings. Technological developments The industry in which the group operates is characterized by rapid technological developments and digitalization. To remain competitive, the group must continue to develop new services and increase and improve the functionality, accessibility, and features of its existing services and networks, e.g. by ensuring that its software can handle the growing demand for bandwidth-intensive services. The UK's exit from the EU, Brexit, may affect the Group's operations. The management's current assessment is that Brexit is only expected to affect the Group's operations to a small extent. For a more detailed description of the group's financial risk management, please refer to the section Financial Risk Management, note 3 in the supplementary information. Staff The average number of employees was 471 (471). Ownership As of December 31, 2019, approximately 55% of Hoist Group was owned by AccentEleven Holding Ltd (reg. No. 107941, with its registered office in Jersey, a wholly-owned subsidiary of the investment fund Accent Equity 2008), approximately 30% by C&M Stockholm AB (reg. No. 556847-5924, with its registered office in Stockholm), approximately 11% by Hist AB (reg. No. 559181-8785, with its registered office in Gothenburg, a wholly-owned subsidiary of the Sixth AP Fund), and by approximately 4% by group employees. Proposed allocation of earnings at the 2019 Annual General Meeting The Board of Directors proposes that available profits, including profit/loss for the year as of 2019-12-31, SEK 892,126,868, are capitalized in a new account. For changes in shareholder's equity during the financial year, refer to the Group and Parent Company's report on changes in shareholders’ equity. Otherwise, reference is made to subsequent financial reports with notes.


Group statement of comprehensive income Remaining operations

Amounts in SEK thousands 2019-01-01 2018-01-01

Note 2019-12-31 2018-12-31

Net sales 5 1 323 244 1 212 602

Other operating income 6 -3 810 426

Sum of operating income 1 319 434 1 213 028

Operating expenses

Commodities -746 330 -654 511

Other external costs 7 -114 073 -113 868

Payroll costs 8, 29 -380 495 -355 828

Depreciation of intangible and tangible fixed assets 11,12 -128 075 -192 799

Other operational expenses 6 -667 -1 489

Sum of operating costs -1 369 640 -1 318 496

Operating result -50 206 -105 468

Financial income 9 8 812 36 131

Financial costs 9 -55 913 -99 303

Profit from financial items -47 101 -63 172

Profit before tax -97 307 -168 640

Income tax 10 -1 620 -6 999

Income from continuing operations -98 927 -175 639

Income from discontinued operations 29 – 70

Net income/loss for the year -98 927 -175 569


Group report on other comprehensive income

2019-01-01 2018-01-01 2019-12-31 2018-12-31

Income from continuing operations -98 927 -175 639 Income from discontinued operations – 70 Net income/loss for the year -98 927 -175 569

Other comprehensive income for the year:

Items that may be accounted for above the income statement Exchange rate differences 33 056 58 935 Other comprehensive income for the period, net after tax 33 056 58 935

Sum total profit/loss for the year -65 871 -116 634

Profit for the year attributable: Parent company's shareholders -98 927 -175 569

Total result attributable to: Parent company's shareholders -65 871 -116 634

Earnings per share after dilution Net profit -98 926 575 -175 568 689 Number of shares 111 189 830 100 000 500 Earnings per share SEK -0,89 -1,76

Income from continuing operations -98 926 575 -175 638 689 Number of shares 111 189 830 100 000 500 Earnings per share SEK -0,89 -1,76

Income from discontinued operations – 70 000 Number of shares 111 189 830 100 000 500 Earnings per share SEK – 0,00


Group balance sheet

Amounts in SEK thousands Note 2019-12-31 2018-12-31

ASSETS

Fixed assets Intangible assets 11 1 217 395 1 230 591

Tangible assets 12, 13, 14 79 674 101 165

Financial assets 3,16 73 781 64 828

Deferred tax assets 10 2 259 2 910

Total fixed assets 1 373 109 1 399 494

Working capital

Inventories 17 87 561 100 557

Accounts receivable 3,18 295 651 267 943 Current tax assets 10 801 175

Other receivables 3 695 17 582

Prepayments and accrued income 19 78 709 78 972

Cash and cash equivalents 3,20 152 426 104 720

Total current assets 628 842 569 948

TOTAL ASSETS 2 001 951 1 969 441


Group balance sheet cont.


Equity

Share capital 21 1 179 1 000

Other contributed capital 946 109 831 368

Reserves 90 017 56 961

Retained earnings, including net profit for the year -219 755 -120 829

Total equity 817 551 768 501

LIABILIITIES

Long-term debts

Other long-term debts 3,22 558 895 566 672

Deferred tax liabilities 3,10 60 745 67 115

Other provisions 3,23 14 552 17 064

Total long-term liabilities 634 192 650 851

Accounts payable

Subordinated Shareholder Loan 3,22 51 260 123 351

Borrowing from credit institutions k 3,22 31 537 14 528

Other current financial liabilities 3,22 34 027 26 830

Advance payment from customers 38 765 24 392

Accounts payable 3 173 322 144 886

Other liabilities 24 81 362 56 270

Accrued expenses and prepaid income 3,25 139 935 159 832

Total short-term liabilities 550 208 550 090

TOTAL EQUITY AND LIABILITIES 2 001 951 1 969 441


Statement on changes in equity

Changes in group equity

Year 2019

Amounts in SEK thousands Share

capital

Other contributed

capital Reserves

Retained earnings

including profit for the year Total equity

Opening balance as at 2019-01-01 1 000 831 368 56 961 -120 829 768 501

Total return

Profit/loss for the year -98 927 -98 927

Other comprehensive income –

Exchange rate differences 33 056 33 056 Total comprehensive income 1 000 831 368 90 017 -219 755 702 631

–

Transactions with shareholders –

New capital issue 179 60 687 60 866

Shareholder contributions – 54 054 54 054

Share premium* – Total transactions with shareholders 179 114 741 – – 114 920

Closing balance 2019-12-31 1 179 946 109 90 017 -219 755 817 551

Change in the group's equity

Year 2018

Amounts in SEK thousands Share

capital

Other contributed

capital Reserves

Retained earnings

including profit for the year Total equity

Opening balance 2018-01-01 1 000 158 502 -1 804 54 740 212 439

Total return

Profit for the year -175 569 -175 569

Other comprehensive income –

Exchange rate differences 58 935 58 935 Total return 1 000 158 502 57 131 -120 829 95 805

–

Transactions with shareholders –

Shareholder contributions – 672 866 672 866

Share premium* -170 -170 Sum total transactions with shareholders – 672 866 -170 – 672 696 –

Closing balance 2018-12-31 1 000 831 368 56 961 -120 829 768 501

* Payment of previous option programs


Group statement on cash flows

note 2019-01-01 2018-01-01


Cash flow from current operations

Result before tax -97 307 -168 570

Of which interest paid -32 602 -30 655 Depreciation and amortization 128 075 192 798 Other non-cash items 30 18 898 39 066 Paid tax 10 -12 914 -25 418

Cash flow from current operations before changes in working capital 36 752 37 876

Changes in working capital

Increase/decrease in inventories and current operations 17 1 692 -21 230 Increase/decrease in account receivables 18 -29 971 -1 745 Increase/decrease in accounts and other current receivables 19 7 113 -26 104 Increase/decrease in trade payables 18 829 -17 150

Increase/decrease in other Accounts payable 22, 24, 25 29 359 9 332

Changes in assets relating to customer leasing 14 -12 643 -18 077

Change in liabilities relating to customer leasing 9 838 -831 Total changes in working capital 24 217 -75 805

Cash flow from current operations 60 969 -37 929

Cash flow from investment activities

Investments in subsidiaries 27 -14 742 -6 306 Sale of business 29 – 37 645 Investments in intangible fixed assets 11 -27 516 -28 231 Investments in tangible fixed assets 12, 13 -11 317 -23 904 Sale of property, plant, and equipment – 6 480 Change in financial fixed assets -2 805 -627

Cash flow from investment activities -56 380 -14 943

Cash flow from financing activities

New capital issue 60 867 – Shareholder contributions 54 054 Change external loans -78 905 -76 046 Change of overdraft credit 3 16 999 -34 086 Changes in the value of asset utilization 13 -12 567 -1 642

Cash flow from financing activities 40 447 -111 774

Cash flow for the period 45 037 -164 646

Opening liquid funds 104 720 260 383 Exchange rate difference in cash and cash equivalents 2 669 8 982

Closing liquid funds 20 152 425 104 720


Parent company income statement

2019-01-01 2018-01-01


Operating income

Other operating income 0 -11

Total operating income 0 -11

Operating expenses Other external expenses 7 -643 -1 401

Total operating expenses -643 -1 401

Operating result -643 -1 412

Interest income and similar items 9 23 838 26 196 Interest expense and similar items 9 -35 353 -53 589 Profit after financial items -11 515 -27 393

Profit before tax -12 158 -28 805

Appropriations 33 5 000 10 000 Tax on profit for the year 10 – –

Profit/loss for the year -7 158 -18 805

Total profit corresponds to the Profit/loss for the year


Parent company balance sheet


Assets

Fixed assets

Financial assets Shares in group companies 15, 26 1 009 000 1 009 000 Receivables from group companies) 426 872 398 034 Other financial receivables 2 652 – Total financial fixed assets 1 438 524 1 407 034

Total fixed assets 1 438 524 1 407 034

Current assets

Receivables Prepayments and accrued income 19 5 059 8 300 Total current receivables 5 059 8 300

Cash and bank balances 1 087 683

Total current assets 6 146 8 983

TOTAL ASSETS 1 444 670 1 416 017



Equity and liabilities

Equity 21 Capital stock 1 179 1 000 Total restricted equity 1 179 1 000

Unrestricted shareholders' equity Share premium 946 111 831 368 Retained earnings -46 826 -28 020 Net income/loss for the year -7 158 -18 805 Total non-restricted equity 892 127 784 543

Total equity 893 306 785 543

Long-term debt Other long-term debt 3 500 000 500 000 Total long-term debt 500 000 500 000

Accounts payable Subordinated shareholder loan 3,22 51 260 123 351 Accounts payable 3 20 62 Accrued expenses and prepaid income 3, 25 83 7 061 Total accounts payable 51 364 130 474

TOTAL LIABILITIES AND EQUITY 1 444 670 1 416 017


Parent company report on changes in equity

2019

Share capital

Share premium

Retained earnings

Net income/l

oss for the year Total equity Amounts in SEK thousands

Opening balance 2019-01-01 1 000 831 368 -28 020 -18 805 785 543

Overall earnings:


Transactions with shareholders

New capital issue 179 60 687 60 866

Shareholders' contributions 54 054 54 054

- Profit retained in new account -18 805 18 805 –

Other overall earnings:

Closing balance 2019-12-31 1 179 946 109 -46 825 -7 158 893 306

2018

Share capital

Share premium

Retained earnings

Net income/l

oss for the year Total equity Amounts in SEK thousands

Opening balance 2018-01-01 1 000 158 502 – -28 020 131 482

Overall earnings:


Transactions with shareholders

Shareholders' contributions 672 866 672 866

- Profit balanced in new account -28 020 28 020 –

Closing balance 2018-12-31 1 000 831 368 -28 020 -18 805 785 543


Parent company's report on cash flows

2019-01-01 2018-01-01


Cash flow from current operations

Earnings before taxation -7 158 -28 805 Of which is paid interest -30 583 -25 639 Accrued interest income 3 240 -8 300 Accrued interest cost -6 978 6 853

Cash flow from current operations before changes in working capital -10 896 -30 252

Changes in working capital

Increase/decrease in other short-term receivables – 3 338 Increase/decrease in payables -42 -115 Total changes in working capital -42 3 223

Cash flow from current operations -10 937 -27 029

Cash flow from investment activities

Change in financial fixed assets -2 652 –

Cash flow from investment activities -2 652 –

Cash flow from financing activities

New capital issue 60 867 – Shareholders' contributions 54 054 – Change external loans -72 091 6 174 Change loan Group companies -28 838 –

Cash flow from financing activities 13 992 6 174

Cash flow for the period 403 -20 855

Opening liquid funds 683 21 538

Closing liquid funds 1 087 683


NOTES

Note 1 General information

Hoist Group Holding Intressenter AB with subsidiaries ("Hoist Group" or "Group") is a comprehensive supplier of technical systems with integrated software for hotels and public operations. Hoist Group sells high-speed solutions for the Internet, TV systems, booking, and back-office systems and lock systems. The Group has offices in 18 countries in the EMEA region. The Parent Company is a limited company registered in Sweden and has its registered office in Solna, Stockholm. The address to the main office is Vretenvägen 8 in Solna. On April 29, 2020, these consolidated financial statements have been approved by the Board of Directors for publication. All amounts are reported in thousands of kronor (SEK thousand) unless otherwise stated. This is the third published report in accordance with International Financial Reporting Standards (IFRS).

Note 2 Summary of important accounting principles

2.1 Basis for preparation of reports The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and RFR 1 Supplementary Accounting Rules for the Group. Assets and liabilities are reported at historical acquisition values. The most important accounting principles applied when this consolidated financial statement has been prepared are set out below. The preparation of reports in accordance with IFRS requires the use of some important estimates for accounting purposes. Furthermore, management is required to make certain assessments when applying the Group's accounting principles. The areas that comprise a high degree of assessment, which are complex or those areas where assumptions and estimates are of significant importance for the consolidated financial statements are set out in Note 4. The Parent Company's accounts have been prepared in accordance with RFR 2 Accounting for Legal Entities and the Swedish Annual Accounts Act. In cases where the parent company applies accounting principles other than the Group, this is stated separately at the end of this accounting policy section. New and amended standards to be applied by the Group during the current period All standards that came into force in 2019 have been applied in the consolidated accounts. IFRS 9 Financial Instruments, IFRS 15 Revenue from agreements with customers, and IFRS 16 Leasing agreements were applied early in 2017. Standards, amendments, and interpretations of existing standards that come into force in 2020 or later and which are deemed to be able to have or have an impact on the financial reports. No significant new Standards, amendments, and interpretations of existing standards that come into force in 2020 or later have been identified for the Group.


2.2 Consolidated account statement Subsidiaries Subsidiaries are all companies over which the Group has controlling influence. The Group controls a company when it is exposed to or is entitled to a variable return from its holding in the company and has the opportunity to influence the return through its influence in the company. Subsidiaries are included in the consolidated financial statements from the date the controlling influence is transferred to the group. They are excluded from the consolidated financial statements from the date on which the controlling influence ceases. The acquisition method is used to report on the Group's business acquisitions. The purchase price for the acquisition of a subsidiary consists of the fair value of transferred assets, liabilities, and the shares issued by the Group. The purchase price also includes the fair value of all assets or liabilities that result from an agreement on the conditional purchase price. Acquisition-related costs are expensed as incurred. Identifiable acquired assets and assumed liabilities in a business combination are initially valued at fair values on the acquisition date. For each acquisition, the Group determines whether all non-controlling interests in the acquired company are reported at fair value or the holding's proportionate share of the acquired company's net assets. The amount by which the purchase price, any non-controlling interest, and the fair value of the acquisition date on previous shareholdings exceed the fair value of the Group's share of identifiable acquired net assets, is reported as goodwill. If the amount is less than the fair value of the acquired subsidiary's assets, in the event of a so-called "Bargain purchase", the difference is reported directly in the income statement as ‘Other Operating Income.’ 2.3 Segment reporting and earnings per share Operating segments Hoist Group applies IFRS 8 Operating Segments. An operating segment is part of a company whose operating earnings are regularly reviewed by the Group's "Highest Executive Decision Makers" who make decisions about the resources to be allocated to the segment and evaluate the segment's earnings. Within the Hoist Group, the Board of Directors is the highest decision-making body. Operations are monitored on a revenue basis by the following segments: 1. Geography Profit is followed up by segments at EBITA level, i.e. Operating result after amortization of fixed assets. Earnings per share Earnings per share are calculated by dividing the net profit attributable to the Parent Company's shareholders by the weighted average number of shares outstanding during the year. 2.4 Conversions of foreign currency Functional currency and report currency Items included in the financial statements of the various units in the Group are valued in the currency used in the economic environment in which the respective companies are primarily active (the functional currency). In the consolidated financial statements, Swedish kronor (SEK) is used as the reporting currency, which is also the Parent Company's functional currency and reports currency. Transactions and balance sheet items Foreign currency transactions are translated into the functional currency at the exchange rates that apply to the transaction date. Exchange rate gains and losses arising from the payment of such transactions and


when translating monetary assets and liabilities in foreign currency at the closing date are recognized in the income statement. Exchange rate differences on lending and borrowing are reported in net financial items, while other exchange rate differences are included in Operating result. Group companies Income and financial position for all Group companies (none of which has a high inflation currency as the functional currency) that has a different functional currency than the reporting currency are translated into the Group's reporting currency as follows:

(a) Assets and liabilities for each of the balance sheets are translated at the closing day rate; (b) Revenue and costs for each of the income statements are translated at the average exchange rate

(unless this average rate represents a reasonable approximation of the cumulative effect of the rates prevailing on the transaction date) and;

(c) All exchange rate differences that arise are reported as a separate part of other comprehensive income

On consolidation, exchange rate differences arising as a result of the translation of net investments in foreign operations and borrowing and other currency instruments identified as hedges of such investments are recognized in equity. When divesting a foreign operation, in whole or in part, the exchange rate differences recognized in equity are recognized in the income statement and are reported as part of the capital gain/loss. Goodwill and fair value adjustments arising from the acquisition of a foreign operation are treated as assets and liabilities of this business and are translated at the closing day rate. 2.5 Intangible assets Goodwill Goodwill is the amount by which the acquisition value exceeds the fair value of the Group's share of the acquired subsidiary's identifiable net assets at the time of acquisition. Goodwill on the acquisition of subsidiaries is reported as intangible assets. Goodwill, which is reported separately, is tested annually to identify any impairment needs and is reported at cost less accumulated impairment losses. The impairment of goodwill is not reversed. Gains or losses on the divestment of a unit include the remaining carrying amount of the goodwill relating to the divested unit. Goodwill is allocated to cash-generating units when considering any need for impairment. The distribution is made to the cash-generating units or groups of cash-generating units that are expected to be favored by the business combination that gave rise to the goodwill item. Hoist Group distributes goodwill that arose when the Group was formed in 2017 to the cash-generating units that are judged to benefit from the business acquisition, which is equated with the Group's segments. Customer relations Customer relations and customer contracts that are reported in the consolidated financial statements have been acquired through business combinations and are reported at fair value on the acquisition date. Customer relationships are reported at cost minus accumulated depreciation. Depreciation is made on a straight-line basis to allocate the cost over its estimated period of utilization. Customer relationships are based on contractual obligations and relationships when Hoist has determined the estimated useful life, factors such as the repurchase frequency and termination rate (proportion of customers who terminate their contracts, so-called "churn rate"). See below for the specification of estimated depreciation time (useful life). Capital expenditure on developments and similar work Development costs that are directly attributable to the development and testing of identifiable and unique products controlled by the Group are recognized as intangible assets when the following criteria are met:

I. It is technically possible to complete the product so that it can be used II. The company intends to complete the product and to use or sell it,

III. The prerequisites for using or selling the product are fulfilled, IV. It can be shown how that the product generates probable future economic benefits, V. Adequate technical, financial and other resources to complete the development and to use or sell the

product are available; and


VI. The expenses attributable to the product during its development can be reliably calculated Directly attributable expenses that are capitalized as part of the asset include expenses for employees, materials, and a fair share of indirect costs. Activation costs take into account the portion of the expenditure that has been recognized in the income received/expected contribution. Capitalized development costs are reported as intangible assets and amortized from the time when the asset is ready for use. Depreciation time

Goodwill Indeterminable life - tested for impairment at least annually.

Customer relations 10 years

Capital expenditure on development and similar work

5 years

Other intangible assets 5 years

2.6 Tangible fixed assets All tangible fixed assets are reported at cost minus depreciation. The acquisition value includes expenses that can be directly attributed to the acquisition of the asset. Tangible fixed assets in the Group consist of machinery, fixtures and fittings, service cars, and premises that are held under lease rights (leasing). Additional expenses are added to the asset's declared value or reported as a separate asset, whichever is appropriate, only when it is probable that future economic benefits associated with the asset will benefit the Group and the asset's acquisition value can be measured reliably. The declared value of the replaced part is removed from the balance sheet. All other forms of repairs and maintenance are reported as expenses in the income statement during the period in which they arise. No depreciation is made on land. Depreciation on other assets, to distribute their acquisition value down to the estimated residual value over the estimated useful life, is made linearly as follows: Depreciation periods of tangible fixed assets

Inventories, tools and installations 5 years

Facilities - right-of-use assets Over the estimated duration of the contract, normally 3-8 years

Vehicles - right-of-use assets Over the estimated duration of the contract, normally 3 years

Land Not depreciated

Depreciation of tangible fixed assets The residual value and useful life of the assets are tested each balance sheet date and adjusted if necessary. An asset's carrying amount is immediately written down to its recoverable amount if the asset's carrying value exceeds its estimated recoverable amount. Gains and losses on divestments are determined by comparing sales revenue with the carrying amount and are recognized in Other Operating Income and Other Operating Expenses in the income statement. See also the following section regarding the description of write-downs of non-financial fixed assets.


2.7 Write-downs of non-financial fixed assets Assets that have an indeterminate useful life are not amortized but are tested annually for any impairment. At present, this is only goodwill for the Group. Tangible fixed assets and intangible assets that are amortized are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is made by the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the asset's fair value minus selling costs and its value in use. When assessing impairment, assets are grouped at the lowest levels where there are separately identifiable cash flows (cash-generating units). An impairment loss is reversed if there is both an indication that the impairment requirement no longer exists and there has been a change in the assumptions that formed the basis for the calculation of the recoverable amount. However, the impairment of goodwill is never reversed. A thrust reversal is only made to the extent that the asset's carrying amount after the thrust reversal does not exceed the carrying amount that would have been recognized, minus depreciation where applicable if no impairment has been made. 2.8 Financial instruments Hoist has chosen to apply IFRS 9 as a principle for accounting for its financial instruments when the standard is deemed to provide more reliable and relevant information to users when estimating the amounts, times, and uncertainty for a Hoist future cash flow. Standard applies to all types of financial instruments except: a) Shares in subsidiaries. b) Rights and obligations under lease agreements to which IFRS 16 applies. c) Financial instruments issued by the company that meets the definition of an equity instrument in IAS 32 (including options and warrants). d) Rights and obligations in the scope of IFRS 15. Revenue from agreements with customers that are financial instruments, except for those that, according to IFRS 15, are to be recognized in accordance with this standard (model for depreciation of receivables accounted for at amortized cost). The Group does not hold any derivative instruments and does not apply hedge accounting, which is why these parts of the standard are not applicable. Investments and other financial assets Classification The Group recognizes a financial asset or financial liability in the statement of financial status when, and only when the company becomes a party to the instrument's contractual terms. The classification is based on the Group's business model for the management of financial instruments, and the characteristics of the contractual cash flow from the financial instrument. The Group classifies its financial instruments into the following categories: * Accounting at fair value, either through the income statement or other comprehensive income: * Accounting at accrued acquisition value: Instruments whose main business objective is to ensure that the Group receives contractual cash flows that are only payments of the capital amount and outstanding interest on the capital amount. For financial instruments recognized at fair value, gains and losses are presented either in the income statement or in the report on other comprehensive income. For investments in debt instruments, the accounting will depend on the business model that the Group applies to each instrument. Note 3 shows the information on the categories of financial instruments the Group holds. Valuation On the accounting date, a financial asset or financial liability is measured at fair value plus or minus, for a financial asset or financial liability that is not measured at fair value through profit or loss, transaction costs directly attributable to the acquisition or issue of the financial asset or financial debt.


Debt financial instruments The subsequent valuation depends on the business model the Group has chosen for the management of financial instruments, and the characteristics of the contractual cash flow from the financial instrument. Accrued acquisition value: Assets whose main purpose is that the Group receives contractual cash flows that are only payments of the capital amount and outstanding interest on the capital amount. Assets reported in this category are financial fixed assets, accounts receivable, and cash and cash equivalents. Debt instruments reported in this category consist of shareholder loans, corporate bonds, overdraft credit, financial leaseback, liabilities relating to rights of use, and accounts payable. Changes in value such as reductions or depreciation are recognized in the income statement. Interest from these instruments is recognized in the income statement in accordance with the effective interest method. Depreciation The Group recognizes loss reserves for expected credit losses on current assets, which are financial instruments and financial fixed assets. The Group values the loss reserve for a financial instrument at an amount that corresponds to the expected credit losses for the remaining term if the credit risk for the financial instrument has increased significantly since the first reporting date. For accounts receivable for the coming 12 months period, the Group applies the simplified procedure in accordance with IFRS 9, which states that expected credit losses are recognized in connection with the first accounting period. 2.9 Inventories Inventories are reported at the lowest cost and net realizable value. The acquisition value is determined using the first-in, first-out method (FIFU). The cost of trading goods consists of the cost of purchasing goods. Borrowing costs are not included. Inventories mainly consist of TV sets and Wi-Fi equipment. The net realizable value is the estimated sales price in the ongoing operations, less applicable sales costs. The required allocation for obsolescence has been made according to individual assessment. 2.10 Accounts Receivable and Receivables for Leases Accounts receivable Accounts receivable are initially accounted for at fair value and subsequently at amortized cost using the effective interest method, minus any allocation for impairment. The Group applies the simplified method for assessing expected credit losses in accounts receivable, as described in IFRS 9 Financial Instruments. The Group values the loss reserve at an amount that corresponds to the expected credit losses for the remaining term of accounts receivable that fall within the scope of IFRS 15. None of the Group's accounts receivable contains any significant financing component. The size of the allocation reflects a probability-weighted amount that is determined by the Group evaluating the range of possible outcomes. Furthermore, the model takes into account the time value of the payments. Losses relating to accounts receivable as well as recovered previously written-down accounts receivable are recognized in the income statement as another external expense. The carrying amount of accounts receivable, after any write-downs, is assumed to correspond to its fair value, as this item is short-term in nature. Receivables for Leases The Group offers leasing solutions to its customers. Receivables for financial leases are reported as financial assets and receivables are recognized at the present value of future payments from the customer. 2.11 Cash and cash equivalents Cash and cash equivalents include cash, bank balances, and other current investments with a maturity of no more than three months from the date of acquisition. Check account credit is reported as borrowing among current liabilities.


2.12 Share capital Ordinary shares are classified as equity. Transaction costs directly attributable to the issue of new shares are reported, net of tax, in equity as a deduction from the issue proceeds. Other contributed capital consists of conditional and unconditional shareholder contributions. Reserves arise when translating foreign net assets according to the current exchange rate method. Accrued earnings, including net Profit/loss for the year, consist of accrued earnings 2.13 Accounts payable Accounts payable are initially recognized at fair value and subsequently at amortized cost using the effective interest method. The carrying amount of accounts payable is assumed to correspond to its fair value, as this item is of a short-term nature. 2.14 Borrowing Borrowing (borrowing from credit institutions and other long-term borrowings) is initially recognized at fair value, net after transaction costs. Borrowing is then reported at amortized cost and any difference between the amount received (net after transaction costs) and the repayment amount is recognized in the income statement distributed over the loan period, using the effective interest method. Borrowing is classified as current liabilities unless the Group has an unconditional right to defer payment of the debt for at least 12 months after the balance sheet date. Borrowing costs (interest costs and transaction costs) are recognized in the income statement in the period to which they relate. As of the balance sheet date, the Group's borrowing consists of commitments to companies for leasing contracts (rights of use), borrowing from related parties (shareholder loans), borrowing from the issuance of corporate bonds and borrowing from credit institutions. 2.15 Current and deferred tax The current tax expense is calculated based on the tax rules that are decided on the balance sheet date or in practice decided in the countries where the parent company's subsidiaries operate and generate taxable income. Management regularly evaluates the claims made in self-declarations regarding situations where applicable tax rules are subject to interpretation and, when deemed appropriate, makes allocations for amounts that are likely to be paid to the tax authority. Deferred tax is recognized in its entirety, according to the balance sheet method, on all temporary differences that arise between the tax value of assets and liabilities and their reported values in the consolidated financial statements. However, the deferred tax is not recognized if it arises as a result of a transaction that constitutes the first recognition of an asset or liability that is not a business combination and which, at the time of the transaction, does not affect the reported or fiscal result. Deferred income tax is calculated by applying tax rates (and laws) that have been decided or in practice decided on the balance sheet date and which are expected to apply when the deferred tax asset concerned is realized or the deferred tax liability is settled. Deferred tax assets are reported to the extent that future fiscal surpluses will probably be available, against which the temporary differences can be utilized. Deferred tax is calculated on temporary differences arising on participations in subsidiaries, except where the timing of the reversal of the temporary difference can be controlled by the Group and, probably, the temporary difference will not be reversed in the foreseeable future. 2.16 Employee benefits Pension liabilities and benefits after termination of employment The Group has only so-called defined contribution pension plans. In France, employees are entitled to a defined benefit, a one-time bonus, in conjunction with retirement. The Group reports this obligation as a pension liability. For defined contribution pension plans, the Hoist Group pays contributions to publicly or privately


administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the fees have been paid. The fees are reported as payroll costs as they are earned by employees performing services for the company. Prepaid fees are recognized as an asset to the extent that cash repayment or reduction of future payments may benefit the Group. Costs relating to employment in previous periods are reported directly in the income statement. Short-term benefits Short-term employee benefits are calculated without discounting and are accounted for as an expense when the related services are received from the employee. Compensation upon termination Severance pay is payable when an employee's employment is terminated by the Hoist Group before the agreed-upon retirement date or when an employee accepts voluntary retirement in exchange for such compensation. Hoist Group recognizes severance pay when the Group is demonstrably obliged to either terminate employees per a detailed formal plan without the possibility of withdrawal or to provide compensation upon termination as a result of an offer made to encourage voluntary resignation. Benefits that fall due more than 12 months after the balance sheet date are discounted to present value. Bonus plans The Group accounts for liability and a cost for bonuses, based on earnings or individual performance. The Group recognizes a provision when there is a legal obligation or an informal obligation due to past practice. 2.17 Provisions Provisions are recognized when the Group has a legal or informal obligation as a result of past events, an outflow of resources will probably be required to settle the commitment, and the amount has been calculated reliably. Provisions in the Hoist Group preferably consists of restructuring costs. The restructuring mainly includes staff costs. No provisions are made for future operating losses. Provisions are valued at the present value of the amount expected to be required to settle the obligation. A pre-tax discount rate is used to reflect a current market assessment of the time-dependent value of money and the risks associated with the provision. The increase in the allocation due to the passage of time is reported as interest expense. Most of the provisions in the Hoist Group are short-term in nature. 2.18 Revenue Accounting Hoist Group sells goods and services either in a project-based or contract-based form. Sales of TV systems and HSIA equipment (High-Speed Internet Access) include both a product and an installation service in the contracts and are usually priced as a single unit. For these types of products/services, a separate maintenance and support service is sold which are priced separately. Revenues from these product groups are both contract-based in the form of maintenance and support services as well as project-based in the form of goods and installation services. The delivery also includes software that is necessary for the functionality of the product which forms an integral part of the delivery TV systems and HSIA. When selling Guest Content, rights are provided in the form of program content. Revenue from Guest Content is usually contract-based and is accounted for on a straight-line basis over the term of the contract. Property Management Systems is proprietary software used in the administration of hotels and can most easily be described as an ERP system for the hotel industry (room service, receipts in bars, cleaning schedules, bookings, etc.). For this, a license is paid, which is usually paid in two parts. Part of the fee is project-based and relates to installation and adaptation/integration with other systems. Also, a contract-based quarterly or monthly fee for the use of the software is paid. The fee includes upgrades of the version that is installed. In case a completely new version is launched, a new price is paid according to a special agreement and new agreement. The new version is optional to order for the customer. The locks and equipment include project-based revenue from the sale of goods and installation. The product group also includes, to a lesser extent, one-off sales of goods such as shampoos, bathrobes, irons, and the like.


Sales of goods and services vary between different companies within the Group and also between geographical areas. Note 5 presents information on amounts in the income statement attributable to revenues from agreements with customers. It shows that the Group has project revenue and contract-based revenue over time in geographical regions. The business model does not include customer losses as a calculated part of the transaction but is one that occurs after an agreement has been made with the customer. Project-based revenue Project-based revenue consisting of combined product and installation service is reported over time based on the degree of completion of every individual order. The calculation of the degree of completion is based on the time spent in relation to the total estimated time of the project. Full revenue recognition occurs when the goods have been delivered to the customer and there are no unfulfilled commitments that may affect the customer's approval of the goods. Delivery takes place when the goods have been transported to a location where they were installed. The customer has either accepted the goods in accordance with the agreement, the period for objecting to the agreement has expired, or the group has objective evidence that all the criteria for acceptance have been met. The assignments are carried out on a fixed-price basis and the proceeds from the sale of goods are reported based on the price in the agreement, minus any discounts. Contractual liability is reported for expected discounts in relation to sales up to the balance sheet date. These are not material and are not reported separately in the consolidated balance sheet. The calculation regarding revenue, costs, or the degree of completion of projects is revised if circumstances change. Increases or reductions in estimated revenues or costs that are due to a changed estimate are recognized in the income statement in the period in which the circumstances that gave rise to the change became known to the management. No financing component is deemed to be available as the credit period is short, usually 30 days. A claim is recognized when the goods have been delivered and the customer has approved the installation, as this is the time when the compensation becomes unconditional. As the projects run for one year, no performance commitments that are unfulfilled on the balance sheet date are reported. Software sales are sold as a right to use and are accounted for at a certain time. In some cases, the Group sells goods to customers without an installation component. In these cases, revenue is accounted for when delivery to the customer has taken place. Contract-based revenue The Group enters into service and support agreements with customers. These are usually invoiced monthly or quarterly in advance. As a result, the Group incurs a commitment to the customer which is reported as a liability on the balance sheet. Revenue is recognized on a straight-line basis over the contract period as the Group's commitment to the customer is reduced. Interest income Interest income is recognized in revenue over the term using the effective interest method. Interest income linked to leasing agreements concluded with Hoist Group's customers is reported as part of the Group's main income and thus affects revenue and Operating results. Interest income obtained through other financial instruments, e.g. bank balances, is reported in net financial items. Other operating income Exchange rate gains related to Operating results are reported under Other Operating Income. 2.19 Leasing The Group as a lessee The Group leases premises, machinery, and cars. Local contracts are usually valid between 3 to 8 years. Other leasing contracts vary in terms and periods of validity depending on the country and nature in general.


Leased assets may not be used as collateral for borrowing. A contract relating to rights of use is recognized as an asset and a corresponding liability from the date the leased asset is available to the Group. Lease payment is divided between amortization of debt and interest expense. The interest expense for each period is calculated using the annuity method. Rights-of-use assets are depreciated according to plan in the shortest expectancy of their economic life or the lease term. Assets and liabilities attributable to leasing are initially measured at fair value. Leasing liabilities include the present value of the following payments: - Currently fixed payments - Variable payments based on an index or rate - Amounts that are considered likely to pay at the end of the lease period in the form of guaranteed residual values. - Call options that are considered likely to be exercised at the end of the lease period. Payments are discounted at present value with the implicit lease rate, or if it cannot be determined, at the Group's loan interest rate. In cases where the lease rate is not known, future cash flows have been discounted by 5%. Assets are valued at a cost which consists of the following: - The present value of future payments at the initial valuation of the lease debt - Payments made on or before the start date of the contract, ex. first increased fee - Direct costs at the time of acquisition - Repair or restoration costs Payments attributable to shorter contracts or contracts of lesser value are expensed as incurred in the income statement. Short-term contracts refer to contracts with a maximum duration of 12 months. Less value is assessed by management as a contract with a total value of less than EUR 6000 and is primarily made up of simpler fixtures or office equipment. The Group as lessor The Group sells equipment to customers through leasing agreements, both so-called operational and financial leasing agreements. An operating lease implies that the Group retains the risks and rewards associated with ownership of the asset. In a financial leasing agreement, the Group's customer has taken over the benefits and risks associated with the ownership which is equated with an instalment purchase. In the case where it has been assessed that the lease agreement with the customer is a so-called operational leasing agreement, the Group maintains the leased asset in its balance sheet and makes amortization of the leased asset on a continuous basis. Revenue is recognized on a linear basis over the term of the agreement. If the agreement is deemed to be a finance lease, the tangible fixed asset is removed from the balance sheet on the day the asset was delivered to the customer, in accordance with the terms of the customer agreement. A long and short financial receivable is reported at the beginning of the agreement with the customer and corresponding revenue is reported. As payments are made by the customer, amortization of debt is reported. Interest income is recognized on an ongoing basis as it is earned. The Group offers our customers leasing as a natural part of business agreements. Thus, both current income through operating leases as well as interest income in financial leases forms part of the Group's main income. 2.20 Discontinued operations A separate part of the income statement consists of reporting the result from discontinued operations. A discontinued operation is a part of the Group that has either been divested or is classified as held for sale and constitutes an independent significant business segment or a substantial part of a business segment. In 2017, the Group divested a significant part of the French business segment, which according to the company's management meets the criteria for accounting in accordance with IFRS 5. The sum of profit after tax from discontinued operations is therefore reported as an individual item in the


income statement. The sub-items included in the result from discontinued operations, as well as the impact on cash flow and information about which discontinued operations are reported as supplementary information in the note. The information in the note information covers the Group's total operations, including discontinued operations, unless otherwise stated. 2.21 Dividends Dividends to the Parent Company's shareholders are reported as a liability in the Group's financial reports during the period when the dividend is approved by the Parent Company's shareholders. No dividends will be proposed for the 2020 Annual General Meeting regarding the 2019 fiscal year. 2.22 Accounting principles in the Parent Company The accounting principles of the Parent Company are essentially in line with the consolidated accounts. The Parent Company's accounts have been prepared in accordance with RFR 2 Accounting for Legal Entities and the Swedish Annual Accounts Act. RFR 2 specifies exceptions to and amendments to the standards issued by the IASB and statements issued by IFRIC. The exceptions and supplements shall apply from the date the legal entity applies in its consolidated financial statements the standard or statement stated. The Parent Company uses the presentation forms specified in the Annual Accounts Act, which means, among other things, that a different presentation of equity is applied. Shares in subsidiaries are recognized at amortized cost minus any write-downs. When there is an indication that shares and participations in subsidiaries have decreased in value, the recoverable amount is calculated. If this is lower than the carrying amount, a write-down is made. Write-downs are reported in the item Income from participation in group companies. The acquisition value of shares in subsidiaries includes transaction costs. In the consolidated financial statements, transaction expenses are expensed in the period in which they arise. The Parent Company has chosen to apply IFRS 9 per the RFR 2 exemption, which means that financial assets and liabilities are recognized at initial recognition at fair value with additions or deductions for transaction costs. In the subsequent accounts, financial liabilities and assets are valued at amortized cost. 2.23 Definitions of key figures for a multi-year overview in the Administration Report EBITDA Operating result before depreciation and amortization Adjusted EBITDA EBITDA before non-recurring items EBITA Operating result before amortization of customer relations and down-writes

due to goodwill Adjusted EBITA EBITA before non-recurring items EBIT Operating result Operating margin EBITDA Operating result before depreciation and write-downs divided by net sales Operating margin EBITA Operating result before amortization of customer relations and impairment goodwill divided by net sales Profit margin Profit before tax divided by net sales Capital employed Equity plus interest-bearing liabilities Equity ratio Equity plus untaxed reserves minus tax portion of untaxed reserves in

relation to total assets



EBITDA Adjusted EBITDA EBITA Adjusted EBITA EBIT

Sum of operating income 1 319 434 1 319 434 1 319 434 1 319 434 1 319 434

Sum of operating costs -1 369 640 -1 369 640 -1 369 640 -1 369 640 -1 369 640

Operating result -50 206 -50 206 -50 206 -50 206 -50 206

Including depreciation 67 835 67 835

Including write-downs 60 240 60 240 60 240 60 240

Including one-off revenues and expenses 54 500 54 500

Earnings 77 869 132 368 10 034 64 533 -50 206

Operating margin EBITDA

Operating margin EBITA

Profit margin

Return on capital employed

Equity ratio

Net sales 1 323 244 1 323 244 1 323 244

EBITDA 77 869

EBITA 10 034

Earnings before tax -97 307

Equity 817 551 817 551

Interest-bearing liabilities 610 155

Balance sheet total 2 001 951

Key figures 6% 1% negative 1 427 706 41%


Note 3 Financial risk management

Through its operations, the Group is exposed to various financial risks: market risk (currency risk and interest

rate risk), credit risk and liquidity risk/financing risk. The Group's overall risk management policy focuses on

the unpredictability of the financial markets and strives to minimize potential adverse effects on earnings and

liquidity due to financial risks. Risk management is managed by the CFO in consultation with the CEO and

the Board of directors, in accordance with guidelines established by the Board of directors. The risk function

includes identifying, evaluating, and securing financial risks. This is done in close cooperation with the

Group's operating units. The Group does not apply so-called hedge accounting per the rules in IFRS 9.

Market risk

(i) Currency risk

Hoist Group is an international group operating in several countries. The reporting currency is Swedish

kronor (SEK). This means that the Group is exposed to currency risks because changes in exchange rates

can affect earnings and equity.

Exposure to changing currency valuations is usually divided into two main groups, translation exposure, and

transaction exposure, respectively.

Translation Exposure

The assets of the foreign subsidiaries, with deductions for liabilities, constitute a net investment in foreign

currency, which, when consolidated, gives rise to a translation difference. Such translation differences are

recognized directly in the Group's equity and are reported under a separate category in Equity called

Reserves. The Group's guidelines are that net investments in foreign currencies should not be hedged with

financial derivatives, amongst other things to avoid any unwanted liquidity effects when such derivatives are

extended. A related form of translation exposure is the earnings that are accumulated during the year by

foreign subsidiaries and which thus has an ongoing impact on foreign equity. A strengthening of the

subsidiaries' currency in relation to the Swedish krona leads to higher revenues and costs in the Group.

A 10% strengthening of EUR would affect pre-tax profit by SEK -1.4 million

A 10% increase in GBP would affect profit before tax by SEK -0.5 million

A 10% strengthening of NOK would affect profit before tax by SEK +1.7 million

Intra-group loans are translated at the current balance sheet rate at the unit that has the receivable or the

debt denominated in a currency other than the functional currency applicable to each unit. Net intra-group

loans have no impact on equity.

Transaction Exposure

Transaction exposure usually means exposure arising from commercial flows, i.e. sales and purchases

across national borders.

Some of the Group's purchases are in currencies other than the country in which the Group operates.

Currency risks are limited by price adjustments to customers.

See Note 18 and Note 22 for more information on the Group's currency exposure.

(ii) Interest rate risk with respect to cash flows and fair values

Since the Group does not hold any significant interest-bearing assets, the Group's income and cash flow

from operating activities are essentially independent of changes in market interest rates. The Group's interest

rate risk arises mainly through long-term borrowing. Borrowings made at variable interest rates expose the

Group to interest rate risk concerning cash flow. Borrowings made at a fixed interest rate expose the Group

to interest rate risk regarding fair value.

Borrowing in the Group consists largely of corporate bonds. An interest rate increase of 1% would affect the

interest expense by SEK 5 million.

The Group's external loans run at variable interest rates. The Group's borrowing from related parties runs at


a fixed interest rate and is thus exposed to real changes in valuation. For further information, see Note 22

Borrowing for a description of the essential conditions for borrowing.

Credit risk

Credit risk or counterparty risk is the risk that the counterparty in a financial transaction will not fulfill its

obligations on the due date. Credit risk is managed at the Group level and is linked to accounts receivable,

cash and cash equivalents, financial leasing, and balances with banks and financial institutions.

See Note 18 Accounts receivable, and the subsequent paragraph, for a more detailed description of the

Group's exposure to accounts receivable.

Customer Credit Risk

In addition to comprehensive monitoring at the Group level, a more detailed follow-up of customer credit

risks is conducted at the local level, close to the customer. Customer credit risk is the risk that customers will

not fulfill their commitments. If customers are credit-rated by independent valuers, these assessments are

used. In cases where there is no independent credit assessment, a risk assessment is made of the

customer's credit rating, taking into account his financial position, as well as past experience and other

factors. Risk limits are determined based on internal or external credit assessments. The use of credit limits

is followed up regularly. No major concentrations of credit risks are considered to exist. The maximum

exposure to credit risks in accounts receivable consists of the reported value for each given time.

The combination of no individual customer accounts for a larger share of sales than 5% and a large

proportion of sales goes to municipalities, county councils and relatively large private companies, this gives a

very limited credit risk.

Liquidity risk/Finance risk

As of December 31, 2019, the Group had available liquidity of SEK 152,426 thousand consisting of bank

deposits. In addition to reported cash and cash equivalents, the Group had an unutilized overdraft facility of

SEK 43,785 thousand as of December 31, 2019.

The goal regarding the capital structure is to ensure the Group's ability to continue its operations, so that it

can continue to generate returns to shareholders and benefit other stakeholders, and to maintain an optimal

capital structure to keep costs down.

The table below shows the discounted cash flows that come from the Group's liabilities in the form of

financial instruments, based on the earliest remaining maturities contracted at the balance sheet date. The

amounts that fall due within 12 months are consistent with the book amounts, as the discounting effect is

insignificant.

Amounts in foreign currency and amounts to be paid based on a floating interest rate have been estimated

using the exchange rates and interest rates applicable at the balance sheet date.


Note 3 cont.

Group Less than

1 year Between 1

and 2 years Between 2

and 5 years More than

5 years Amounts in SEK thousands

31 December 2019

Corporate bond 30 490 515 245

Shareholder loan 53 823

Liabilities related to financial lease back 15 110 12 838 21 058 –

Overdraft 31 537

Liabilities relating to the value in use of assets 21 237 13 900 6 009 172

Liabilities relating to suppliers, tax and other debts 440 010

Total 592 207 541 983 27 066 172

Group Less than

1 year Between 1


and 5 years More than

5 years Amounts in SEK thousands

31 December 2018 Corporate bond 30 000 30 000 515 000


Liabilities related to financial lease back 9 226 12 022 17 103 529

Overdraft 14 528

Liabilities relating to the value in use of assets 20 689 17 396 15 615 507


Total 604 328 59 418 547 719 1 036

Parent company Less than

1 year Between 1


and 5 years More than 5

years Amounts in SEK thousands

31 December 2019 Corporate bond 30 490 515 245 0


Liabilities relating to suppliers, tax and other debts 104

Total 84 417 515 245 – –

Parent company Less than 1 year

Between 1 and 2 years

Between 2 and 5 years

More than 5 years Amounts in SEK thousands

31 December 2018 Corporate bond 30 000 30 000 515 000



Total 160 474 30 000 515 000 –


Management of capital risk The goal regarding the capital structure is to ensure the Group's ability to continue its operations, so that it can continue to generate a return to shareholders and benefit other stakeholders, and to maintain an optimal capital structure to keep costs down. Like other companies in the industry, the Group assesses capital based on the debt/equity ratio. This key figure is calculated as net debt divided by total capital. Net debt is calculated as all interest-bearing liabilities, except for back-to-back leasing liabilities and liabilities relating to the value in use of assets minus liquid assets. Total capital is calculated as Equity in the consolidated balance sheet plus net debt. The debt/equity ratio as of December 31 was as follows:


Corporate bond 500 000 500 000

Other borrowing 41 696 21 327

Cash and bank balances -152 426 -104 720

Net debt 389 270 416 608

The Group's goal regarding the capital structure is to ensure the Group's ability to continue its operations so that it can continue to generate a return for shareholders and benefit other stakeholders and to maintain an optimal capital structure to keep costs down.

To maintain or adjust the capital structure, the Group may change the dividend paid to shareholders, repay capital to shareholders, issue new shares, or sell assets to reduce debt.

The Group assesses capital based on the debt/equity ratio and Operating result against the Group's net debt.

2019-12-31 2018-12-31

Net debt 389 270 416 608

Subordinated shareholder loan 51 260 123 351

Total equity 817 551 768 501

Total capital 1 258 081 1 308 459

Debt-to-equity ratio 31% 32%

2019-12-31 2018-12-31

Net debt 389 270 416 608


The Group's financial assets are in the category of loan receivables and accounts receivable, and the Group's financial liabilities belong to the category of other financial liabilities valued at amortized cost.

Group

Receivables at amortized cost Receivables at amortized cost

2019-12-31 2018-12-31 Assets in the balance sheet Financial assets 73 781 64 828 Receivables 295 651 267 943

Cash and cash equivalents 152 426 104 720 Total amount 521 857 437 490

Liabilities at amortized cost Liabilities at amortized cost 2019-12-31 2018-12-31

Liabilities in the balance sheet Other long-term liabilities 558 895 566 672 Short-term liabilities shareholder loans 51 260 123 351 Other current financial liabilities 34 027 26 830

Overdraft 31 537 14 528 Payables 173 322 144 886 Accrued interest 83 7 061 Total amount 849 125 883 329


Note 4 Important estimates and judgments in applying the Group's accounting principles

Estimates and assessments are evaluated on an ongoing basis and are based on historical experience and other factors, including expectations of future events that are considered reasonable under prevailing conditions.

Important estimates and assumptions for accounting purposes The Group makes estimates and assumptions about the future. The estimates for accounting purposes that result from these will, by definition, rarely correspond to the actual result. The estimates and assumptions that pose a significant risk of material adjustments in the carrying amounts of assets and liabilities during the next financial year are set out in the main features below.

Impairment test for goodwill Every year, Hoist Group examines whether there is any need for impairment for goodwill, in accordance with the accounting principle described in Note 2.7 Impairment of non-financial fixed assets. Recoverable values for cash-generating units have been determined by calculating value in use. For these calculations, certain estimates must be made, the estimates are shown in Note 11. The reported values at the balance sheet date for goodwill distributed on cash-generating units are shown in Note 11. The business plan for the coming year is based on the test. The Board of Directors resolved to write down goodwill totaling SEK 71.7 million in December 2018, based on the weaker development mainly in France. The impairment test for 2019 showed that there is no need for impairment.

Deferred tax assets Deferred tax assets are reported to the extent that future fiscal surpluses will probably be available, against which the temporary differences can be utilized. No deferred tax assets are reported attributable to the fiscal deficits in 2019, as we do not know with certainty if they can be utilized.

Tangible fixed assets The residual value and useful life of the assets are tested each balance sheet date and adjusted if necessary. An asset's carrying amount is immediately written down to its recoverable amount if the asset's carrying value exceeds its estimated recoverable amount.

Fixed-price Projects An agreement that is based on fixed price revenue is recognized based on the proportion of the total agreed service delivered during the financial year. This is determined based on the actual cost incurred compared to the total estimated cost of the assignment.


Not 5 Segment information

2019 Geography Geography Geography Geography Geography Geography All France Sweden DACH* MED** Norway UKBene*** Others Sum total Project revenues 106 477 92 041 57 998 112 351 103 074 97 299 200 328 769 568 Contract revenues 78 961 173 841 40 108 36 041 67 400 35 263 122 062 553 677 Other operating income -58 -547 780 -5 185 – – 1 200 -3 810 Revenue from external customers 185 380 265 335 98 886 143 207 170 474 132 562 323 590 1 319 434

Sales between segments 22 568 5 882 32 756 47 031 263 22 367 -130 867 0

Segment's total revenue 207 948 271 217 131 642 190 238 170 737 154 928 192 723 1 319 434

Operating expenses -218 986 -278 883 -138 627 -188 017 -157 842 -167 340 -219 948 -1 369 641

Including depreciation -25 852 -6 829 -2 959 -3 199 -2 924 -325 -25 749 -67 835

Including write-downs -1 459 – – – – – -58 781 -60 240

Operating result -11 037 -7 665 -6 985 2 221 12 895 -12 411 -27 224 -50 207

Depreciation of customer relations 1 459 – – – – – 58 781 60 240

Impairment of goodwill –

EBITA -9 579 -7 665 -6 985 2 221 12 895 -12 411 31 557 10 033

Net financial -4 002 314 -118 2 298 -9 191 -2 459 -33 942 -47 101

Profit before tax -15 040 -7 351 -7 103 4 519 3 704 -14 871 -61 165 -97 307

The Hoist Group is organized into a number of regions. Each region is a segment.

Insofar as sales of EBITA account for more than 10% of the group.

* Switzerland, Germany and Austria.

** Spain, Italy and Portugal. *** United Kingdom, Belgium and the Netherlands.


2018 Geography Geography Geography Geography Geography Geography All France Sweden DACH* MED** Norway UKBene*** Others Sum total Project revenues 102 492 126 487 63 079 63 236 78 241 68 551 164 238 666 324 Contract revenues 65 895 180 588 48 311 39 224 68 304 36 910 109 539 548 772 Other operating income 77 309 1 218 5 128 – -9 123 323 -2 068 Revenue from external customers 168 465 307 384 112 608 107 588 146 545 96 338 274 100 1 213 028

Sales between segments 34 242 21 968 35 762 43 543 117 13 438 -149 071 0

Segment's total revenue 202 707 329 352 148 371 151 131 146 662 109 776 125 029 1 213 028

Operating expenses -249 018 -305 161 -143 863 -126 378 -134 612 -105 602 -253 862 -1 318 496

Including depreciation -19 672 -9 070 -3 428 -4 092 -3 108 -337 -22 001 -61 710

Including write-downs -69 113 – -3 206 – – – -58 770 -131 089

Operating result -114 767 24 191 1 302 24 753 12 050 4 174 -57 171 -105 468

Depreciation of customer relations 657 – – – – – 58 770 59 427

Impairment of goodwill 68 456 3 206 71 662

EBITA -45 654 24 191 4 508 24 753 12 050 4 174 1 599 25 621

Net financial -9 053 -26 470 1 486 1 237 2 524 -256 -32 639 -63 172

Profit before tax -123 820 -2 279 2 787 25 990 14 574 3 918 -89 809 -168 640

The Hoist Group is organized into a number of regions. Each region is a segment Insofar as sales of EBITA account for more than 10% of the group.

* Switzerland, Germany and Austria.

** Spain, Italy and Portugal.

*** United Kingdom, Belgium and the Netherlands.


Note 6 Other operating income

2019-01-01 2018-01-01

Group 2019-12-31 2018-12-31

Other operating income -3 460 -320

Exchange rate differences -350 746

Sum of other operating income -3 810 426

Note 6 Other operating expenses

2019-01-01 2018-01-01

Group 2019-12-31 2018-12-31

Exchange rate differences -667 -1 489

Sum of other operating expenses -667 -1 489

2019-01-01 2018-01-01

Parent company 2019-12-31 2018-12-31

Exchange rate differences – -11

Sum of other operating expenses – -11

Exchange rate differences are reported net in Other operating income/Other operating expenses

The gross effect of exchange rate differences is as follows:

2019-01-01 2018-01-01

Group 2019-12-31 2018-12-31

Exchange profit -350 746

Exchange loss -667 -1 489

Sum total -1 017 -743

2019-01-01 2018-01-01

Parent company 2019-12-31 2018-12-31

Exchange loss – -11

Sum total – -11


Note 7 Audit fees

Audit assignment refers to reviews of the annual report and accounts, the administration of the Board and the Managing Director, and other duties that it is incumbent upon the company's auditor to perform, and advice or other assistance prompted by observations in such an audit or the performance of such other duties. Everything else is divided into tax consultations and other assignments. During the financial year 2019, the remuneration to the auditor-elected company Öhrlings PricewaterhouseCoopers AB amounted to SEK 1,380,000 in audit assignments.

2019-01-01 2018-01-01

Group 2019-12-31 2018-12-31

PwC

Audit engagements 2 725 2 564 Of which from discontinued operations – – Tax consultation 159

Auditory operations beyond the auditory assignment 187 564 Of which from discontinued operations – 564 3 071 3 128

EY

Audit engagements – 446 Other advisory services – 22 – 468

Others

Audit engagements 1 563 1 537 Tax consultation 16 Other advisory services 30 121

1 593 1 674

Sum total 4 664 5 270

2019-01-01 2018-01-01

Parent company 2019-12-31 2018-12-31

PwC

Audit engagements – 850 Tax consultation 56

EY

Audit engagements – 114 – 114

Sum total 56 964


Note 8 Employee benefits

Salaries and other remuneration and social costs

2019-01-01 2018-01-01

2019-12-31 2018-12-31

Salaries and other

remuneration (including tantième)

Pension costs

Social fees Quantity

Salaries and other

remuneration (whereof

tantième) Pension

costs Social

fees Quantity Group Board members, CEOs and other senior executives

5 082 783 1 009 2 7 240 935 803 2 (whereof tantième)

– 1 895

Other employees 274 900 16 268 71 083 469 269 767 13 801 66 480 469

(whereof tantième)

2 580 4 961

Sum total 279 982 17 051 72 091 471 277 007 14 736 67 283 471


Basic salary/ Variable remuner

ation

Other benefits

Pension cost

Sum total Board

compensation

2019-12-31

Malcolm Lindblom 1 897 71 408 2 376

Alfonso Tasso 3 046 69 375 3 490

Summa 4 943 – 140 783 5 865

(Amount SEK thousands)

Basic salary/ Variable remuner

ation

Other benefits

Pension cost

Sum total Board

compensation

2018-12-31

Malcolm Lindblom 2 218 114 582 2 915

Alfonso Tasso 2 843 1 895 171 353 5 261

Summa 5 061 1 895 285 935 8 176


Average number of employees

2019-01-01 2018-01-01

2019-12-31 2018-12-31 Average

number of employees

Of which are male

Average number of employees

Of which are male

Parent company

Sweden – 0%

– 0%

Sum total in parent company

– 0%

– 0%

Subsidiaries

Sweden 93 63% 89 65%

Norway 40 68% 43 74%

Denmark 16 73% 19 75%

Finland 18 65% 14 65%

United Kingdom 40 70% 37 71%

Baltic states 5 78% 5 80%

Italy 18 63% 18 67%

Germany 19 59% 20 61%

France 69 62% 90 71%

United Arab Emirates 20 84% 18 81%

Switzerland 20 87% 20 87%

Netherlands 1 100% 2 50%

Spain 2 100% 2 100%

Portugal 77 69% 57 71%

Austria 5 100% 5 100% Ireland 29 62% 31 65% Sum total in subsidiaries

471 68%

471 71%

Group total 471 68% 471 71%


Gender distribution for board members and other senior executives

2019-01-01 2018-01-01

2019-12-31 2018-12-31

Number on

the balance sheet date

Of which are male

Number on the balance sheet

date

Of which are male

Group Board members 5 100,0% 3 100,0% CEO and other senior executives

1 100,0%

1 100,0%

Group total 6 100,0% 4 100,0%

2019-01-01 2018-01-01

2019-12-31 2018-12-31

Number on

the balance sheet date

Of which are male

Number on the balance sheet

date

Of which are male

Parent company Board members 5 100,0% 3 100,0% CEO and other senior executives

– 0,0%

– 0,0%

Parent company total 5 100,0% 3 100,0%


Note 9 Financial income and financial expenses

2019-01-01 2018-01-01

Group 2019-12-31 2018-12-31

Financial income

Exchange rate differences 5 081 33 436 Interest income 200 318 Other financial income 3 531 2 376

Sum total financial income 8 812 36 131

Financial expenses

Exchange loss -8 156 -32 502 Interest expenses – – - Borrowing -31 936 -49 608 - Other interest expenses -7 828 -5 425 Other financial expenses -7 992 -11 768

Sum total financial expenses -55 913 -99 303

Net profit from financial items -47 101 -63 172

Of which from discontinued operations – 0 Profit from financial items, continuing operations -47 101 -63 172

2019-01-01 2018-01-01

Parent company 2019-12-31 2018-12-31

Interest income and similar income items

Interest income, Group companies 23 838 26 196

Total interest income and similar items 23 838 26 196

Interest expenses and similar income items

Interest expenses -31 936 -49 608 Other -3 417 -3 981

Total interest expenses and similar items -35 353 -53 589

Net profit from financial items -11 515 -27 393


Note 10 Income tax

2019-01-01 2018-01-01

Group 2019-12-31 2018-12-31

Current tax for the year -9 134 -11 715

Current tax attributable to previous years 660 -1 519

Deferred tax expense/tax revenue for temporary differences 6 854 6 235

Sum total income tax -1 620 -6 999

The differences between the reported tax expense and an estimated tax expense based on the applicable tax rate are as follows:

2019-01-01 2018-01-01

Group 2019-12-31 2018-12-31 Profit before tax -96 162 -168 570 Of which from discontinued operations – 70 Income tax calculated according to the Group's current tax rate 20 579 37 085 Non-taxable income 2 540 4 019 Non-deductible costs -28 494 -48 693

Utilization of loss tax loss carryforwards not previously reported – 2 848 Effect of foreign tax rate 3 096 -739 Adjustments of current tax for previous years 660 -1 519

Income tax -1 620 -6 999

The weighted average tax rate within the Group is: 1,68% 4,15%

2019-01-01 2018-01-01

2019-12-31 2018-12-31

Parent company

Profit before tax -7 158 -28 805 Income tax calculated according to the applicable tax rate (21.4%) 1 532 6 337 Non-deductible costs -1 532 -2 643

Tax losses for which no deferred tax assets have been recognized – -3 694

Tax on profit/loss for the year 0 0


Note 10 Deferred tax 2019-01-01 2018-01-01 Group 2019-12-31 2018-12-31

Deferred tax liabilities Customer agreements 58 720 65 090 Taxation on untaxed reserves 2 025 2 025 Sum total deferred tax liabilities 60 745 67 115

Deferred tax assets

Transaction expenses bank loans Provisions 366 624 Deferred tax assets 1 539 1 990 Other 354 296 Sum total deferred tax assets 2 259 2 910

Net of deferred tax -58 486 -64 205

Deferred taxes are distributed as follows: 2019-01-01 2018-01-01 Group 2019-12-31 2018-12-31

Deferred tax liabilities - deferred tax liabilities to be utilized after more than 12 months 52 709 59 501

- deferred tax liabilities to be utilized within 12 months 8 036 7 614 Sum total deferred tax liabilities 60 745 67 115

Deferred tax assets - deferred tax assets to be utilized after more than 12 months 2 259 2 910

- deferred tax assets to be utilized within 12 months – – Sum total deferred tax assets 2 259 2 910

Net of deferred tax -58 486 -64 205

The gross change in deferred taxes is as follows: 2019-01-01 2018-01-01 Group 2019-12-31 2018-12-31 At the start of the year -64 205 -116 727 Increase through business acquisitions – 48 752 Accounting in the income statement 6 854 6 235 Exchange rate differences -39 91 Tax reported in equity -1 096 -2 556 At the end of the year -58 486 -64 205


Deferred tax assets that are unreported Deductible temporary differences and tax loss carryforwards for which deferred tax assets have not been reported in the financial statement report:

2019-01-01 2018-01-01

Group 2019-12-31 2018-12-31

Tax deficits 954 380 909 462

Sum total 954 380 909 462

2019-01-01 2018-01-01

Parent company 2019-12-31 2018-12-31

Tax deficits – 7 039

Sum total – 7 039

The tax effect on tax loss carryforwards is only included to the extent that there are compelling reasons for believing that these can be used in the near future. Loss history is a factor in evaluating tax loss carryforwards. Also, the tax loss carryforwards have been valued to the extent that there are also deferred tax liabilities that can be set off against losses.


Note 11 Intangible assets

2019-12-31

Goodwill

Capital expenditures for

R&D Licensing Customer

relationships

Other intangible

assets Sum total

Group Acquisition value brought forward

737 714 74 344 10 616 594 604 4 325 1 421 604

Investments 14 657 26 357 416 – 743 42 173 Sales and divestments – -384 – – -384 Adjustment of acquisition analysis

– – – – –

– Reclassifications – – 132 – -132 – Translation differences 15 040 4 224 751 10 520 -411 30 124 Closing cost

767 411 104 925 11 532 605 124 4 525 1 493 518

Opening depreciation – -24 448 -5 329 -87 549 -758 -118 083 Sales and divestments – – – – – Acquired in corporate acquisitions

– – – – –

– This year's depreciations – -20 391 -3 088 -60 240 -817 -84 536 Reclassifications – – – – – – Translation differences -611 -469 – 592 -488 Closing depreciations

– -45 450 -8 886 -147 788 -983 -203 107

Impairment write-downs

-71 662 0 -1 268 – – -72 930

Acquired in corporate acquisitions

– – – – –

– This year's depreciations – – – –

– Reclassifications – – – – – – Translation differences 6 – -92 – – -86 Closing write-downs

-71 656 0 -1 360 – – -73 016

Net opening balance Net closing balance

695 755 59 475 1 285 457 336 3 542 1 217 394


2018-12-31

Goodwill

Capital expenditures for

R&D Licensing Customer

relationships

Other intangible

assets Sum total

Group Acquisition value brought forward

749 392 52 710 9 538 565 815 6 749 1 384 204

Investments – 23 876 917 – 3 439 28 231 Sales and divestments – – – -4 581 -4 581 Adjustment of acquisition analysis

-40 927 – – 6 306 – -34 621

Reclassifications – -102 -20 – -1 520 -1 642 Translation differences 29 249 -2 139 182 22 483 238 50 012 Closing cost 737 714 74 344 10 616 594 604 4 325 1 421 604

Opening depreciation – -7 898 -2 593 -28 119 -694 -39 305 Sales and divestments – – – – – Acquired in corporate acquisitions

– – – – –

– This year's depreciations – -17 102 -2 879 -59 427 -232 -79 640 Reclassifications – 732 102 – 58 892 Translation differences -180 41 -3 111 -30 Closing depreciations

– -24 448 -5 329 -87 549 -758 -118 083

Impairment write-downs – -502 -1 240 – – -1 742 Acquired in corporate acquisitions

– – – – –

– This year's depreciations -71 662 – –

-71 662 Reclassifications – 502 – – – 502 Translation differences – – -29 – – -29 Closing write-downs

-71 662 0 -1 268 – – -72 930

Net opening balance Net closing balance 666 052 49 896 4 019 507 056 3 568 1 230 590


2019-12-31 Geographic market France Sweden DACH MED Norway UKBene Others Sum total

Total goodwill per cash generating unit

3 016 110 211 43 235 188 009 57 975 66 695 226 614 695 755

Capital expenditures for R&D

– 1 759 0 – – – 57 717 59 476

Licensing 1 071 – – 169 5 – 41 1 285

Customer relationships 48 561 65 900 27 354 107 647 35 321 40 086 132 466 457 336

Other intangible assets

0 – 3 542 – – – 3 542

2018-12-31 Geographic market France Sweden DACH MED Norway UKBene Others Sum total

Total goodwill per cash generating unit

2 888 105 506 41 389 179 983 55 500 63 848 216 939 666 052

Capital expenditures for R&D

– 1 009 373 – – – 48 514 49 896

Licensing 1 063 – – 284 21 – 2 652 4 019

Customer relationships 54 190 74 786 30 138 120 308 38 818 43 326 145 490 507 056

Other intangible assets

129 – 3 437 – – 3 3 568

Goodwill is distributed by geographical regions which is in line with the way the Group's operations are monitored, supervised and reviewed. Essential assumptions used for calculating utility values:

2019 2018

Growth rate 1) 9,35% 7,47%

Growth rate 2) 2% 2%

Discount rate 3) 10% 10%

1) Weighted average growth rate used to extrapolate cash flows within the budget period. 2) Weighted average growth rate used to extrapolate cash flows beyond the budget period. 3) Discount rate after tax used in the present value calculation of estimated future cash flows. These assumptions have been used to analyze each geographical area. The discount rates used are stated after tax and reflect specific risks that apply to the various segments. Every year, Hoist Group examines whether there is any need for impairment for goodwill, in accordance with the accounting principle described in Note 2.7. Impairment of non-financial fixed assets. Recoverable amounts for cash-generating units has been determined by calculating value in use, which is based on future discounted cash flows. For these calculations, some estimates must be made. The discounted cash flows are based on the budget for 2020 and forecasts for 2021-2024. Beyond the forecast period, the starting point has been a growth rate of 2 percent per year. The impairment test for 2019 showed that there is no need for impairment. In December 2018, the Board of Directors decided to write down goodwill totalling SEK 71.7 million, based


on the weaker development, mainly in France. An increase of 1% in the discount rate would not imply any impairment of the Group as a whole. A decrease in growth rate by 1% unit (from 2% to 1%) would not imply any need for impairment for the Group as a whole.

Note 12 Tangible assets

31 December 2019

Inventories, tools and equipment

Operational leasing (lessor)

Lessee (offices and cars) Sum total

Group Opening balance acquisition value 18 097 83 411 76 441 177 949 Investments 2 205 8 173 9 112 19 490

–

Sales and divestments 192 -876 -85 -769 Acquired in corporate acquisitions –

Reclassification 299 -10 991 – -10 692 Translation differences -1 366 1 199 1 501 1 334

Closing cost 19 427 80 916 86 969 187 312

Opening depreciation -8 824 -38 101 -29 558 -76 483 Sales and divestments 169 877 – 1 046 Acquired in corporate acquisitions – – – – Depreciation for the year -4 572 -17 845 -21 085 -43 502 Reclassification – 10 750 10 750 Translation differences 1 565 -357 -345 863

Closing depreciations -11 662 -44 676 -50 988 -107 326

Impairment write-downs -301 -301

Acquired in corporate acquisitions – –

Depreciation for the year – –

Reclassification –

Translation differences -10 -10

Closing write-downs -311 -311

Net opening balance –

Net closing balance 7 454 36 240 35 981 79 675


31 December 2018


Operational leasing (lessor)

Lessee (offices and cars) Sum total

Group Opening balance acquisition value 16 955 68 588 57 282 142 825 Investments 5 366 21 702 18 538 45 606

–

Sales and divestments -667 -5 977 -887 -7 530 Acquired in corporate acquisitions –

Reclassification -4 149 -3 284 -435 -7 868 Translation differences 592 2 381 1 943 4 916

Closing accumulated cost 18 097 83 411 76 441 177 949

Opening depreciation -4 288 -28 615 -10 161 -43 064 Sales and divestments – – – – Acquired in corporate acquisitions – – – – Depreciation for the year -4 907 -14 562 -19 651 -39 120 Reclassification 474 5 999 435 6 908 Translation differences -103 -923 -181 -1 207

Closing accumulated depreciation -8 824 -38 101 -29 558 -76 483

Impairment write-downs -9 – – -9 Acquired in corporate acquisitions – –

Depreciation for the year -280 -280

Reclassification –

Translation differences -11 -11

Closing write-downs -301 -301

Net opening balance –

Net closing balance 8 971 45 310 46 883 101 165


Note 12 cont.

2019-12-31

Geographic market France Sweden DACH MED Norway UKBene Others Sum total

Inventories, tools and equipment 2 494 970 761 700 531 89 1 908 7 453

Operational leasing (lessor) 35 141 874 0 1 0 0 224 36 240

Lessee (offices and cars) 10 816 7 620 2 183 2 621 6 121 112 6 507 35 981

2018-12-31

Geographic market France Sweden DACH MED Norway UKBene Others Sum total


2 699 1 176 1 019 1 066 575 435 2 002 8 971

Operational leasing (lessor) 43 461 1 364 0 0 4 – 481 45 310

Lessee (offices and cars) 16 544 7 621 3 341 3 645 8 175 16 7 541 46 883


Note 13 Right-of-use assets

Group as lessee

The consolidated income statement contains the following items related to rights-of-use assets:

2019-01-01 2018-01-01

Depreciation of rights-of-use assets 2019-12-31 2018-12-31

Buildings 16 135 13 976

Inventories, tools and equipment - -

Cars 4 950 5 311

Miscellaneous - -

21 085 19 287

Interest expenses amounted to SEK 2,224 thousand (included in financial expenses).

The cash flow impact of the above items amounted to SEK 23,817 thousand during the financial year

The consolidated balance sheet contains the following items related to rights-of-use assets:

Assets with rights-of-use* 2019-12-31 2018-12-31

Buildings 29 612 39 676

Inventories, tools and equipment - -

Cars 6 368 7 207

Miscellaneous

35 981 46 883

* Included in tangible fixed assets

Liabilities relating to rights-of-use assets 2019-12-31 2018-12-31

Short-term 19 827 18 154

Long-term 19 310 32 307

39 137 50 461

The present value of liabilities relating to rights-of-use assets is as follows:

Group 2019-12-31 2018-12-31

Within 1 year 19 827 18 693

Between 1-5 years 19 141 31 279

More than 5 years 169 489

Present debt relating to rights-of-use assets 39 137 50 461


Note 14 Operational leasing

Leasing agreements where the company is the lessor

The Group rents out SEK 36,240,000 according to operating leases. The future non-cancellable lease payments are as follows:

Group 2019-12-31 2018-12-31

Within:

1 year 6 112 1 531

2 years 7 130 5 423

3 years 14 050 8 048

4 years 7 671 15 239

5 years 624 13 986

Later than 5 years 652 1 084

Sum total 36 240 45 310

A rental income of SEK 17,845,000 is reported in the income statement. For repairs and maintenance an expense of SEK 0 is reported for the leased assets.

Note 15 Shares in Group companies

Parent company 2019-12-31 2018-12-31

Opening balance acquisition value

1 009 000 1 009 000

Investment 0 0

Closing balance

1 009 000 1 009 000

Parent companies holding of shares in subsidiaries: Name Company registration number Head

quarter

Capital share

Number of

shares

Closing balance 2019-

12-31

Closing balance 2018-

12-31

Hoist Group Holding AB 556864-1293 Solna 100% 200 001 1009 000 1009 000


Company name Headquarter Ownership

in %

Hoist AB Solna 100%

Hoist Group Holding SAS R.C.S Nanterre 100%

Hoist Group SA Vernier 100%

Hoist Group Leasing AB Solna 100%

Hoist Group AB Solna 100%

Hoist Group Equipment AB Solna 100%

Hoist Group AS Oslo 100%

Hoist Group A/S Hörsholm 100%

Hoist Group Development AB London 100%

Hoist Group AB OY Helsinki 100%

Hoist Group OÜ Tallinn 100%

UAB Hoist Locatel Vilnius 100%

Hoist Locatel MEA AP FZCO Dubai 100%

Hoist Group France R.C.S Nanterre 100%

Hoist Group Leasing France R.C.S Nanterre 100%

2M Locatel AS Hörsholm 100%

Hoist Group GmbH Wien 100%

Hoist Group GmbH Nürnberg 100%

Hoist Group Spain S.A.U Barcelona 100%

Hoist Group Srl Milan 100%

Hoist Group B.V. Haag 100%

Hoist Group S.A Brussels 100%

Hoist Group Hospitality Ireland Ltd Kilkenny 100%

Hoist Group Portugal SA Lisbon 100%

Hoist Group Ltd London 100%

Hoist Hospitality Services Denmark AS Hörsholm 100%


Note 16 Financial fixed assets

Group 2019-12-31 2018-12-31

At the beginning of the year 64 828 90 999

Additional items 19 517 0

Outgoing items -10 564 -26 171

Closing balance financial assets 73 781 64 828

Group 2019-12-31 2018-12-31

Endowment policy

Deposition 6 992 613

Leasing receivables 62 463 56 110

Miscellaneous 4 326 8 105

Closing balance financial assets 73 781 64 828

Note 17 Inventories

Book value of inventory 2019-12-31 2018-12-31

Ongoing work 24 800 51 381 Finished goods 60 346 45 568 Advances to suppliers 2 414 3 608

Total book value 87 561 100 557


Note 18 Accounts receivable

Group 2019-12-31 2018-12-31

Accounts receivable 313 413 317 520 Credit loss provision -17 763 -49 578

Net accounts receivable 295 651 267 943

Accounts receivable by currency

Group 2019-12-31 2018-12-31

SEK 34 053 63 876

USD 15 523 6 410

EUR 166 668 134 805 NOK 22 357 15 436 GBP 20 063 13 127 Other currencies 36 988 34 288

295 651 267 943

Analysis of credit risk exposure in accounts receivable 2019-12-31 2018-12-31 Accounts receivable that are neither overdue nor written down 153 247 128 823

Overdue for payment:

- 0-30 days 64 978 65 526 - 31-60 days 17 181 16 583 - 61-90 days 15 510 15 711 - more than 90 days 62 498 90 876

Completely overdue 160 166 188 696

Of which written down -17 763 -49 578

Reported value of accounts receivable 295 651 267 942

Calculation of loss reserve 2019-12-31 2018-12-31 Accounts receivable that are neither overdue nor written down 842 1 288 - 0-30 days 477 655 - 31-60 days 1 122 497 - 61-90 days 989 786 - more than 90 days 14 332 46 351

Completely written down 17 763 49 578


Note 19 Prepaid expenses and accrued income

Group 2019-12-31 2018-12-31

Prepaid rent 2 221 2 664

Prepaid leasing 395 511 Prepaid insurances 2 235 1 665 Prepaid interest 5 034 8 695

Accrued income 53 316 52 577

Other prepaid expenses 15 509 12 861

Prepayments and accrued income total 78 709 78 972

Parent company 2019-12-31 2018-12-31

Prepaid insurances 26 0

Prepaid interest 5 034 8 300

Prepayments and accrued income total 5 060 8 300

Note 20 Cash and cash equivalents

Group 2019-12-31 2018-12-31

Balance sheet

Cash and bank balances 141 848 104 092

Blocked funds 10 578 627

Cash and cash equivalents total 152 426 104 720


Note 21 Share capital and other contributed capital

2019-12-31 Number of

shares Share

capital Other contributed

capital Total

Opening balance 01 January 2019

100 000 500 1 000 831 368 832 368

New capital issue 17 901 958 179 60 687 60 866

Shareholders' contribution – 54 054 54 054

Closing balance 31 December 2019

117 902 458 1 179 946 109 947 288

The shares have a quotient value of SEK 1 per share. Each share corresponds to one vote. All shares registered on the balance sheet date are fully paid.

2018-12-31 Number of

shares Share capital

Other contributed

capital Total

Opening balance per 01 January 2018 100 000 500 1 000 158 502 159 502

New capital issue – – – –

Shareholders' contribution – 672 866 672 866

Closing balance 31 December 2018 100 000 500 1 000 831 368 832 368


Note 22 Borrowing

The corporate bond is valid until June 2021. The interest rate of Stibor is +6%. If Stibor is negative, the interest rate is 6%. The interest rate off the shareholder loan is 5%. At the end of the reporting period the Group's exposure regarding borrowing for changes in interest rates and contractual timing for interest renegotiation is as follows:

Group 2019-12-31 2018-12-31

Long-term

Borrowing from credit institutions Corporate bond 500 000 500 000 Financial lease back 32 958 28 106 Liabilities regarding rights-of-use assets 19 311 31 767 Other long-term borrowing 6 626 6 799 558 895 566 672

Short-term Shareholder loans 51 260 123 351 Overdraft 31 537 14 528 Financial lease back 14 201 8 136 Liabilities regarding rights-of-use assets 19 827 18 694 116 824 164 709

Total borrowings 675 719 731 381 At the end of the reporting period the Group's exposure regarding borrowing for changes in interest rates and contractual timing for interest renegotiation is as follows:

2019-12-31 2018-12-31

6 months or less 675 719 731 381 6-12 months – – 1-5 years – – More than 5 years – –

675 719 731 381

The amounts reported, by currency, for the Group's borrowing are as follows:

2019-12-31 2018-12-31

SEK 585 986 642 825 DKK 20 136 19 427 NOK 16 922 22 274 EUR 39 498 32 560 Other currencies 13 177 14 295

675 719 731 381

The Group has the following unused credit facilities:

2019-12-31 2018-12-31

Variable interest rate: - expires after more than 1 year 43 785 60 392

43 785 60 392


Note 23 Other provisions

Group Restructuring Pensions Other Total

Opening balance 2019-01-01 8 092 4 058 4 914 17 064 - additional provisions 141 477 55 673

Utilized during the year - 3 184 - 3 184

Closing balance 2019-12-31 5 049 4 535 4 969 14 552

Group 2019-12-31

Long-term 4 535

Short-term 10 018

14 552

Group Restructuring Pensions Other Total

Opening balance 2018-01-01 7 240 4 324 4 703 16 267 - additional provisions 852 - 266 211 797

Closing balance 2018-12-31 8 092 4 058 4 914 17 064

Group 2018-12-31

Long-term 4 058

Short-term 13 006

17 064

Note 24 Other liabilities

Group 2019-12-31 2018-12-31

Recoverable VAT 34 747 29 012 Personnel-related debt 25 718 20 593 Miscellaneous 20 897 6 665

Total other liabilities 81 362 56 270


Note 25 Accrued expenses and prepaid income

Group 2019-12-31 2018-12-31 Accrued salaries 23 172 25 700 Accrued holiday pay 21 438 17 248 Accrued social fees 4 992 5 069 Accrued audit costs 2 262 2 690 Accrued interest 115 7 114 Other accrued costs 32 861 30 543 Accrued income 55 094 71 468 Total accrued expenses and prepaid income 139 935 159 833

Parent company 2019-12-31 2018-12-31 Shareholders' accrued interest costs – 6 853 Accrued interest 83 208 Total accrued expenses and prepaid income 83 7 061

Note 26 Pledged assets and contingent liabilities

Group 2019-12-31 2018-12-31

Provisions for liabilities

Shares in subsidiaries 1 061 236 974 643 Floating charge 36 930 36 883

1 098 166 1 011 526

Parent company

Shares 1 009 000 1 009 000

1 009 000 1 009 000


Note 27 Acquisitions

PK Verkkotaito OY On October 1, 2019, Hoist Group Finland Inc. acquired 100% of the outstanding shares in PK Verkkotaito OY. PK Verkkotaito OY has an online platform that integrates with hotel websites to improve the online booking process (Hotel Engine). The purchase price, including supplementary purchase price, was SEK 16.1 million. Accounts receivable and other current receivables correspond to the contractual amounts since all accounts receivable and other current receivables are expected to be recoverable. PK Verkkotaito OY contributed SEK 1.4 million to the Group's net income for the period between October 1 to December 31, 2019, and SEK 0.1 million in profit after tax. IF PK Verkkotaito OY would have been consolidated from January 1, 2019, it would have impacted the Group's net income by an additional SEK 3.7 million and SEK 0.04 million in profit after tax.

PK Verkkotaito OY

Date of acquisition 1 October 2019

Group

Cash regulated purchase price 9 782

Additional consideration 6 355

Total purchase price 16 137

Fair value of net assets acquired 1 480

Goodwill 14 657

Assets and liabilities resulting from the acquisition are as follows:

Acquired carrying amount

Cash and cash equivalents 1 286 Tangible fixed assets 71 Accounts receivable and other receivables 243 Net deferred tax liabilities -27 Accounts payable and other liabilities -93

Fair value of net assets 1 480

Goodwill 14 657

Acquired net assets 16 137

Purchase price – cash outflow:

Cash regulated purchase price -9 782

Cash and cash equivalents in subsidiaries

1 286

Net outflow of cash and cash equivalents – Investment activities -8 496


Hoist Group Holding AB On June 30, 2017, the Parent Company acquired 100% of the outstanding shares in Hoist Group Holding AB with subsidiaries that sell and rent systems, products, and services to hotels. Operations are conducted in several geographical markets in Europe and the Middle East. The purchase price of SEK 1,009 million corresponds to the market value and was determined by the valuation of external parties. No transaction costs were incurred in the acquisition. The acquisition analysis was established on June 30, 2018. After revaluation of deferred tax liability, licenses, and accrued income and expenses, the acquired net assets were adjusted upwards by SEK 40.9 million in fair value, see table p. 63. Intangible fixed assets identified during the acquisition consist primarily of customer contracts and customer relationships as well as software. The excess part of the purchase price has been allocated as goodwill. The goodwill is matched by know-how, synergies, and Hoist's full sales, service, and distribution operations in Europe and other markets where Hoist Group is active. Hoist will be able to benefit from existing distribution channels and jointly develop the product range and customer portfolio. No part of the reported goodwill is expected to be deductible in income tax. Accounts receivable and other current receivables correspond to the contractual amounts since all accounts receivable and other current receivables are expected to be recoverable.

Hoist Group Holding Inc.

Adjustment on acquisition

Hoist Group Holding Inc.

Date of acquisition 30 June 2017 30 June 2018 Final

Group

Final purchase price 1 009 000 1 009 000

Cash regulated purchase price - -

Share issue 159 002 159 002

Debt instrument 849 998 849 998

Total purchase price 1 009 000 1 009 000

Fair value of net assets acquired 251 991 40 927 292 918

Goodwill 757 009 -40 927 716 082

Acquired carrying value Adjustment on

acquisition Hoist Group Holding Inc.

Cash and cash equivalents 48 125 48 125 Short-term investments – – Intangible assets 55 463 -3 647 51 816 Customer contracts and customer relations 558 059 558 059 Tangible fixed assets 203 586 203 586 Financial assets 7 719 7 719 Inventory 110 001 110 001 Accounts receivable and other receivables 475 507 -13 057 462 450 Borrowings -665 400 -665 400 Net deferred tax liabilities -126 387 48 752 -77 635


Other provisions -9 950 -9 950 Accounts payable and other liabilities -404 732 8 879 -395 853

Fair value of net assets 251 991 40 927 292 918

Minority interests – –

Goodwill 757 009 -40 927 716 082

Acquired net assets 1 009 000 1 009 000

–

Purchase price – cash outflow: –

Cash regulated purchase price – –

Cash and cash equivalents in subsidiaries

48 125 48 125

Net outflow of cash and cash equivalents – Investment activities

48 125 48 125


HGF 2 On December 30, 2017, Hoist Group France acquired 100% of the outstanding shares in HGF 2. HGF 2 sells products and services within the hotel industry. The business is based in France. The purchase price of SEK 27 million corresponds to the market value and was negotiated with the seller. No transaction costs have been incurred in the acquisition. Intangible fixed assets identified during the acquisition consist primarily of customer contracts and customer relationships. Accounts receivable and other current receivables correspond to the contractual amounts since all accounts receivable and other current receivables are expected to be recoverable. The acquisition analysis was established on December 31, 2018.

HGF2 Adjustment on

acquisition HGF2

Date of acquisition 30 December 2017 Final

Group

Final purchase price 21 020 6 306 27 326

Cash regulated purchase price 21 020 6 306 27 326

Share issue

Debt instrument

Total purchase price 21 020 6 306 27 326

Fair value of net assets acquired 21 020 6 306 27 326

Goodwill 0 0 0

Assets and liabilities resulting from the acquisition are as follows:

Acquired carrying value Adjustment on

acquisition HGF2

Cash and cash equivalents –

Short-term investments

Intangible assets –

Customer contracts and customer relations 7 756 6 306 14 062

Tangible fixed assets 7 770 7 770

Financial assets –

Inventory 1 609 1 609

Accounts receivable and other receivables 8 994 8 994

Borrowings –

Net deferred tax liabilities –

Other provisions –

Accounts payable and other liabilities -5 109 -5 109

Fair value of net assets 21 020 6 306 27 326

Minority interests

Goodwill

Acquired net assets 21 020 6 306 27 326

Purchase price – cash outflow:

Cash regulated purchase price -21 020 -6 306 -27 326

Cash and cash equivalents in subsidiaries –

Net outflow of cash and cash equivalents – Investment activities -21 020 -6 306 -27 326


Note 28 Related party transactions

The transactions that took place with related parties in 2019 were conducted with the company's owners AccentEleven Holding Ltd. And C&M Stockholm Inc.

Shareholder loan Accrued interest Total

Opening balance 2019-01-01 123 351 6 853 130 204

Repayment of shareholder loans -73 559 -6 853 -80 412

Interest 2019 208 1 260 1 468

Closing balance 2019-12-31 50 000 1 260 51 260

Shareholder loan Accrued interest Total

Opening balance 2018-01-01 849 998 25 642 875 639

Repayment of shareholder loans -75 000 – -75 000

Netting against external receivables -21 538 0 -21 538

Shareholder contributions -630 108 -42 758 -672 866

Interest 2018 0 23 969 23 969

Closing balance 2018-12-31 123 351 6 853 130 204


Note 29 Divested operations

On December 30, 2017, France sold the part of its business that focused on healthcare

2019-01-01 2018-01-01

Profit for the period for discontinued operations 2019-12-31 2018-12-31

Operating income – 18 077

Product costs – –

Payroll costs – -12 422

Other costs – -5 585

Operating income – 70

Financial costs – –

Profit before tax – 70

Tax – –

Profit after tax – 70

Cash flow attributable to discontinued operations

Cash flow from operating activities –

Cash flow from investing activities – 37 645

Cash flow from financing activities – –

Note 30 Non-cash items

2019-12-31 2018-12-31

Change in accrued interest rates 83 23 969

Impairment of accounts receivable 8 502 18 012

Impairment stock 10 446 0

Other non-cash items -134 -2 915

Total 18 898 39 066


Note 31 Events after the balance sheet date

Since the balance sheet date the spread of the corona virus has affected Hoist Group's customers in the hotel industry. More about this is mentioned in ‘A Word from the CEO.’

Note 32 Appropriation of profits

Proposed allocation of profits at the 2019 Annual General Meeting.

The Board of Directors proposes that disposable profits, including profit/loss for the year as of 2019-12-31, SEK 892,126,868 are capitalized in a new account.

Note 33 Appropriations

2019-01-01 2018-01-01

Parent company 2019-12-31 2018-12-31

Group contribution 5 000 10 000

Total appropriations 5 000 10 000


Signatures

The consolidated income statement and balance sheet will be submitted to the Annual General Meeting 2020-05-28. Stockholm, April 29, 2020

Malcolm Lindblom Alfonso Tasso Chairman of the Board CEO Niklas Sloutski Peder Ramel Board member Board member

Vidar Andersch Marcus Jennekvist Board member Board member

Our audit report was submitted on April 29, 2020 Öhrlings PricewaterhouseCoopers AB

Tobias Stråhle Chartered Accountant Chief Auditor


Auditor’s Report

To the AGM of Hoist Group Holding Intressenter AB, corporate identity number 559094-0689

Report on the annual accounts and consolidated accounts

Opinion

We conducted an audit of the annual accounts and consolidated accounts of Hoist Group Holding Intressenter AB for 2019. The company's annual accounts and consolidated accounts are included on pages 4-71 of this document.

In our opinion, the annual report has been prepared in accordance with the Annual Accounts Act and provides, in all material respects, a true and fair view of the parent company's financial position as of December 31, 2019 and of its financial results and cash flow for the year according to the Annual Accounts Act. The consolidated financial statements have been prepared in accordance with the Annual Accounts Act and provide, in all material respects, a true and fair view of the Group's financial position at December 31, 2019 and of its financial results and cash flow for the year in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and Annual Accounts Act. The directors' report is consistent with the other parts of the annual accounts and consolidated accounts.

We therefore recommend that the Annual General Meeting adopt the income statement and balance sheet for the Parent Company and the Group.

Our statements in this report on the annual report and the consolidated accounts are consistent with the content of the supplementary report which has been submitted to the Parent Company and the Group's Board in accordance with Article 11 of the Auditors Regulation (537/2014).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibility under these standards is described in more detail in the Auditor's Responsibility section. We are independent in relation to the Parent Company and the Group in accordance with generally accepted auditing standards in Sweden and have otherwise fulfilled our professional ethical responsibilities in accordance with these requirements. This includes that, based on our best knowledge and belief, no prohibited services referred to in Article 5 (1) of the Auditing Regulation (537/2014) have been provided to the audited company or, where applicable, its parent company or its controlled companies within the EU.

We believe that the audit evidence we have obtained is sufficient and appropriate as a basis for our statements.

Our audit approach

The focus and scope of the audit

We designed our audit by determining the materiality level and assessing the risk of material misstatement in the financial statements. We considered the areas in which the CEO and the Board made subjective assessments, such as important accounting estimates made on the basis of assumptions and forecasts of future events, which are by nature uncertain. As with all audits, we have also taken into account the risk of the Board of Directors and the CEO overriding the internal control, and considered, among other things, whether there is evidence of systematic deviations that have led to the risk of material misstatement as a result of irregularities. Which are by nature uncertain

We adapted our audit to perform an appropriate audit to enable us to express an opinion on the financial statements as a whole, considering the Group's structure, accounting processes and controls, and the industry in which the Group operates.

Materiality

The scope and focus of the audit were affected by our assessment of materiality. An audit is designed to obtain a reasonable degree of certainty as to whether the financial statements contain any material misstatement. Errors can occur as a result of irregularities or mistakes. They are considered to be significant if individually or together can reasonably be expected to influence the financial decisions that users make based on the financial reports. Based on professional judgment, we determined certain quantitative materiality ratios, including for the financial reporting. Using these and qualitative considerations, we determined the focus and scope of the audit and the


nature, timing and scope of our audit measures, and to assess the effect of individual and aggregate inaccuracies on the financial statements as a whole.

Key Audit Matters

Key audit matters for the audit are the areas that, in our professional judgment, were the most significant for the audit of the annual accounts and the consolidated accounts for the audited period. These areas were dealt with in the framework of the audit of, and in our opinion on, the annual report and the consolidated accounts as a whole, but we do not make separate statements about these areas.

Key audit matters How our audit considered Key audit matter

Accounting of project revenue

Revenue recognition and income recognition are

carried out in many fixed-price projects over time

according to successive profit settlement, which in

turn is based on management's estimates and

assessment of completion rate, margin, risks and

total remaining costs. In cases where a project leads

to loss, the loss is reported as soon as it can be

determined.

The degree of completion and the profit and loss

account based on the accumulated cost in relation to

the total estimated cost. The risk in financial

reporting is that revenue and income recognition do

not accurately reflect Hoist Group's fulfillment of

performance obligations in the contracts, which in

turn can lead to misallocation of revenue. In

addition to sales revenue and cost of goods sold, the

reporting of projects affects balance sheet items

such as accounts receivable, inventories, accrued

income and advances from customers.

A presentation of the Group's accounting principles

for revenue are included on page 26, as well as

significant estimates and assessments related to

project revenue in note 4 on page 36 in the annual

report.

Our audit of accrual of project revenue and income statement included, among other things, the following audit measures.

• We have obtained an understanding and performed a

evaluation of the processes and the internal controls

management apply to identify and evaluate completion

rate and expected margin in fixed price agreements.

• We have obtained agreements with the customer for a

selection of the fixed price projects and reconciled

relevant data against the project assessments prepared

by Hoist Group.

• We have obtained Hoist Group's model for calculating

and accounting for revenue based on project expenses.

• We have tested the internal controls applied by Hoist

Group for allocation of personnel costs and other

external costs to projects in order to ensure that

revenue is reported at the correct project margin.

Valuation of goodwill and customer relations

As of December 31, 2019, Hoist Group reports

goodwill of SEK 695,755,000 and customer

relationships of SEK 457,336,000. Reported values

have arisen in connection with business acquisitions

in previous fiscal years and are distributed based on

geography. The value of the assets is based on

assumptions about future returns from and

profitability in the cash-generating units to which

goodwill and customer relations have been

allocated.

The valuation is prepared at least annually by the

Board. Valuation of goodwill and customer

relationships is considered to be a particularly

important area as a result of incorrect judgments

and assumptions in the impairment test, such as eg.

Assumptions about estimated future cash flows,

gross margins and growth can have a significant

impact on the Group's earnings and financial

position.

Our audit of the valuation of goodwill and customer relationships included the following audit measures but was not limited to these.

• We have reconciled information in Hoist Group's

impairment test of goodwill and customer relationships

against observable market data, as well as the

company's own business plans and forecasts for the

future.

• We have assessed whether Hoist Group Holding

Intressenter AB's impairment test is based on the

company's financial budgets approved by management

and we have also assessed the growth rate at which the

company assesses cash flows beyond a five-year period.

In connection with this, we have compared

management's assumptions regarding sustainable

growth rate and operating margin against actual growth

and actual operating margin in recent years.

• We have tested that the discount rate used in the

management's calculation reflects specific risks that


Information other than the annual accounts and the consolidated accounts

This document also contains information other than the annual report and the consolidated accounts and can be found on pages 1-3 and 76-84. It is the Board of Directors and the Managing Director who are responsible for this other information.

Our statement regarding the annual report and the consolidated accounts does not include this information and we do not make a statement confirming this other information.

In connection with our audit of the annual accounts and consolidated accounts, it is our responsibility to read the information identified above and consider whether the information is substantially inconsistent with the annual report and the consolidated accounts. In this review, we also take into account the knowledge we have otherwise obtained during the audit and assess whether the information in the rest appears to contain material errors.

If, based on the work done on this information, we conclude that the other information contains a material inaccuracy, we are obliged to report it. We have nothing to report in that regard.

Responsibilities of the Board of Directors and the CEO

It is the Board of Directors and the President who are responsible for the preparation of the annual accounts and the consolidated accounts and that they provide a true and fair view in accordance with the Annual Accounts Act and, in the case of the consolidated accounts, according to IFRS, as adopted by the EU, and the Annual Accounts Act. The Board of Directors and the CEO are also responsible for the internal control that they deem necessary to prepare an annual report and consolidated accounts that do not contain any material errors, whether due to irregularities or mistakes.

In preparing the annual report and the consolidated financial statements, the Board of Directors and the CEO are responsible for assessing the company's and the Group's ability to continue operations. They provide information, where applicable, on conditions that may affect the ability to continue operations and to use the assumption of continued operations. However, the assumption of continued operations is not applied if the Board of Directors and the CEO intend to liquidate the company, cease operations or have no realistic alternative to doing any of this.

Auditor's responsibility

Our goals are to obtain a reasonable degree of certainty as to whether the annual accounts and the consolidated accounts as a whole do not contain any material errors, whether these are due to irregularities or mistakes, and to submit an audit report containing our statements. Reasonable security is a high degree of security, but is no guarantee that an audit performed in accordance with ISA and good auditing practice in Sweden will always detect a material misstatement if one exists. Errors can occur due to irregularities or mistakes and are considered to be material if they individually or together can reasonably be expected to influence the financial decisions that users make based on the annual accounts and the consolidated accounts.

A further description of our responsibility for the audit of the annual accounts and the consolidated accounts is available on the Auditor General's website: www.revisorsinspektionen.se/revisornsansvar. This description is part of the audit report.

Report on other legal and regulatory requirements

Opinion

In addition to our audit of the annual report and consolidated accounts, we have also performed an audit of the Board of Directors and the Managing Director's management of Hoist Group Holding Intressenter AB for 2019 and of the proposal for dispositions regarding the company's profit or loss.

We recommend that the Annual General Meeting dispose of the profit in accordance with the proposal in the Directors' Report and grant discharge to the members of the Board and the Managing Director from liability for the financial year.

Basis for Opinion

We conducted our audit in accordance with generally accepted auditing standards in Sweden. Our responsibility according to this is described in more detail in the Accountant's Responsibility section. We are independent in relation to the Parent Company and the Group in accordance with generally accepted auditing standards in Sweden and have otherwise fulfilled our professional ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate as a basis for our statements.


Responsibilities of the Board of Directors and the CEO

It is the Board of Directors who is responsible for the proposal for allocations regarding the company's profit or loss. In the case of a proposed dividend, this includes, among other things, an assessment of whether the dividend is justifiable in view of the requirements that the company's and the Group's business type, scope and risks place on the size of the parent company's and the Group's equity, consolidation needs, liquidity and position in general.

The Board is responsible for the company's organization and the management of the company's affairs. This includes, among other things, continuously assessing the company's and the Group's financial situation, and ensuring that the company's organization is designed so that the accounting, asset management and the company's financial affairs are otherwise controlled in a satisfactory manner. The CEO shall manage the day-to-day management in accordance with the Board's guidelines and instructions and take, among other things, the measures necessary for the company's accounting to be completed in accordance with law and for the management of funds in a satisfactory manner.

Auditor's responsibility

Our goal regarding the audit of the administration, and thus our statement of discharge, is to obtain audit evidence in order to be able to assess, with a reasonable degree of certainty, whether any member of the board or the CEO in any material respect:

• Undertook any action or committed any negligence that may give rise to liability for the company

• Acted in any other way in violation of the Companies Act, the Annual Accounts Act or the Articles of Association.

Our goal regarding the revision of the proposal for dispositions of the company's profit or loss, and thus our statement on this, is to judge with reasonable degree of certainty whether the proposal is compatible with the Companies Act.

Reasonable assurance is a high degree of assurance, but no guarantee that an audit performed in accordance with generally accepted auditing standards in Sweden will always detect measures or omissions that may cause liability to the company, or that a proposal for dispositions of the company's profits or losses is incompatible with the Companies Act.

A further description of our responsibility for the audit of the administration can be found on the Auditor General's website: www.revisorsinspektionen.se/revisornsansvar. This description is part of the audit report.

Öhrlings PricewaterhouseCoopers AB, 113 97 Stockholm, was appointed Hoist Group Holding Intressenter AB's auditor by the AGM on May 31, 2019 and has been the company's auditor since May 25, 2018. Authorized Accountant Tobias Stråhle has been Auditor in charge since June 15, 2018

Stockholm, 29 april 2020

Öhrlings PricewaterhouseCoopers AB

Tobias Stråhle Authorized Accountant


Sustainability

Hoist Group is an international, customer-driven entrepreneurial company that offers innovative solutions to thousands of EMEA hotels. We have more than 20 years of proven hotel experience and our focus is always on helping our clients deliver the best experience to their customers. We are proud to work with both smaller independent hotels as well as international chains and we are constantly striving for our customers to grow. We are always at the forefront when it comes to the technological solutions we offer to our customers. Today we have about 500 dedicated employees in 18 countries. The Hoist Group supports the UN's Global Sustainable Development Goals and takes them into account in our daily operations. Our primary opportunity to help achieve the goals cover the following areas: We know that our employees are the key to our success. We have 500 dedicated EMEA employees working together to serve thousands of hotels in the best way possible. The variation in our business creates a workplace with a great variety of knowledgeable professional employees. With a solid understanding of the hotel industry, professionalism, and dedication, we help our customers deliver the best possible experience for their guests. Hoist Group is an international and dynamic workplace. We combine our local expertise with international resources. Multicultural exchange is something we encourage and value highly, being a global company opens up a new world for our employees and we encourage internal mobility. With clear guidelines, policies, and strong values, we want to create a safe, fair, and sustainable workplace culture.

Like many other operators in our industry, we face the challenge of achieving a more even gender distribution in certain professions, such as IT and TV technologies. The Hoist Group is actively working on this issue, which has produced results during the year, as the proportion of women in the company has increased from 29% in 2018 to 32% in 2019.


Environment The Hoist Group complies with environmental legislation that prevails in the countries we operate and in the relevant business sectors. We will continuously work to reduce our negative environmental impact. Goals for how Hoist will reduce its carbon dioxide emissions will be developed in 2020. We all need to contribute to achieving them within the Group. In conjunction with this, we will conduct a supplier evaluation. At present, we can make a big impact by selecting partners and suppliers who have a clear vision of how to achieve their sustainability goals. Our business is dependent on functioning transport, and that the manufacturers of produce use sustainable products and packaging, and that they reduce the use of raw materials through recycling. We see it as a matter of duty to recycle and reuse materials. In collaboration with our suppliers, in several countries where we operate, we offer our customers alternative packaging and end-of-life products in connection with those installations. Electricity consumption We will measure our consumption of electricity at our 20 offices in EMEA and to obtain comparable key figures. They must be presented in energy consumption and CO2 per employee and square meter respectively. This is a challenge as data for electricity consumption is not available in the same way in all countries. It's not just about how much electricity we consume, we also want to choose electricity from renewable sources whenever possible. Our three offices in Sweden have electricity that is 100% produced by hydropower and through our supplier we contribute, amongst other things, to creating prosperous rivers rich with fish life. Freight Transportation We have transport and logistics agreements that include Hoist's central warehouse and transport to the warehouse, including container ships from China, from the warehouse to customers, and our offices within EMEA. For local transport, separate local agreements are signed. Personnel Transportation We need to travel to meet our customers when we do business with them but above all to install, consult, and train them. To the extent we can, we choose trains over flights, but many trips are made with the employees' cars. Internal meetings have been held since 2017 for the most part via Teams (formerly Skype). Sales meetings, management meetings, internal training and internal support take place exclusively via the Internet in accordance with Hoist's policy. Corporate Social Responsibility (CSR) At Hoist Group we believe that we have a social responsibility and that through commitment we can make a difference. We are proud partners of Hand in Hand, a non-profit association registered in Sweden, with partner organizations in each country, and since 2013 we have been involved in several projects to combat poverty through entrepreneurship. Through our work with Hand in Hand, the UN's Global Sustainable Development Goals 2030 are addressed, focusing on: Objective 1 (no poverty), Objective 2 (no hunger), Objective 3 (good health and well-being), Objective 4 (good education for all), Objective 5 (equality), Objective 8 (decent working conditions and economic growth), Objective 10 (Reduced Inequality) and Goal 17 (Global Partnership).


We have been involved in projects focusing on entrepreneurial education for women, to run their own micro-businesses, to take children out of child labor, and to let them go to school to complete their education and to contribute to better health and clean water. Our projects last for 2.5 years and are followed up every quarter with reports from Hand in Hand. We want to encourage the commitment of our employees, and every year two staff members visit the site. The visits are planned and implemented together with Hand in Hand. Ongoing projects The Community Uplift Program, Ngwata and Kinyambu Village, Kenya (2018-2020).The village program in Kenya started in July 2017 and since then 33 groups, with a total of 705 members, have been started. Through education in entrepreneurship, self-help groups, and access to micro-loans, villagers in Ngwata and Kinyambu can lift themselves and their families from poverty. Education in budgeting and savings takes place weekly. Members are introduced to business development to learn about modern farming practices, about crops that can yield despite the dry climate and diversification through, for example, goat breeding or beekeeping. Members learn marketing and to work with capital, budgeting, savings, loans and repayments. The "banks" members start, they can borrow from themselves in order to start their businesses and by paying off their loans they create opportunities for larger loans to expand their businesses.

Activity Target Targets met

Number of self-help groups 36 38

Educated residents 700 705

Women in the groups (%) 80 81

Men in the groups (%) 20 19

Number of businesses created

and/or improved

400 448

New jobs 600 661

Reports from Hand in Hand are presented on our website. A new project starting in 2021 is being planned.


Auditor’s report on the statutory sustainability report

To the general meeting of the shareholders in Hoist Group Holding Intressenter AB, corporate identity number 559094-0689

Engagement and responsibility

It is the board of directors who is responsible for the statutory sustainability report for the year 2019 (the financial year 2019) on pages76-69 and that it has been prepared in accordance with Annual Accounts Act.

The scope of the audit

Our examination has been conducted in accordance with FAR’s auditing standard RevR 12 The auditor’s opinion regarding the statutory sustainability report. This means that our examination of the statutory sustainability report is substantially different and less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with sufficient basis for our opinion.

Opinion

A statutory sustainability report has been prepared.

Stockholm, 29 april 2020 Öhrlings PricewaterhouseCoopers AB Tobias Stråhle Authorized Accountant


Corporate governance report Hoist Group Holding Intressenter

Hoist Group Holding Intressenter AB (publ) ("The Company" with subsidiaries) is a public limited company whose corporate bond is listed on Nasdaq Stockholm. The company complies with the Companies Act, the Articles of Association, NASDAQ’s regulations, as well as internal rules and regulations. Since the Company does not have listed shares, the Swedish Code of Corporate Governance is not applied. Annual General Meeting The Annual General Meeting is the Company's highest decision-making body and it is through participation at the Annual General Meeting that the shareholders exercise their influence in the Company. The Annual General Meeting is held annually within six months after the end of the financial year. At the Annual General Meeting, the income statement and balance sheet are determined and the disposition of the result is discussed. Also, issues relating to discharge from liability for the members of the Board and the CEO are dealt with, as well as the election of the Board and the auditor and remuneration to the Board and the auditor. In 2019, the Company held an extra General Meeting in March, when it was decided to carry out a new share issue to the Sixth AP Fund and to change the Board as follows. At the Annual General Meeting, held in June, it was decided to issue a new share issue to a number of employees within the Group. In 2020, the Annual General Meeting is expected to be held in May/June. Share and shareholders As of December 31, 2019, the share capital amounted to SEK 1,179,024 and the number of shares was 117,902,458. The distribution of ownership is as follows: Accent Equity 2008 55.1%; C&M Stockholm AB 29.7%; Sixth AP Fund 11.5%; and employees within the Group 3.7%. The Board and their responsibilities Below the Annual General Meeting (AGM), The Board is the highest decision-making body and the highest executive body. The Board's responsibilities are regulated by the Companies Act, the Articles of Association, the Annual Accounts Act, guidelines from the Annual General Meeting, and the rules of procedure for the Company's Board of Directors. The Board shall consist of a minimum of three and a maximum of ten board members with a maximum of five deputies. The members are elected annually at the AGM for the period until the end of the next AGM. The Board of Directors is responsible for the Company's organization and administration and shall deal with and make decisions on matters of material importance and of a general nature that pertain to the Company's operations. The Board shall, among other things, set overall goals for the business and strategies for achieving the goals. The Board of Directors shall establish an appropriate organization for the business and continuously evaluate the Company's operational management and, if necessary, appoint or dismiss the CEO. The Board is responsible for issuing instructions to clarify the division of responsibilities between the Company's various bodies and senior executives. The Board of Directors shall ensure that there are effective systems for monitoring and controlling the Company's operations and financial position against the set goals. The Board shall continuously stay informed of the Company's development to continuously assess the Company's financial situation. This is done, among other things, through financial reporting, and regular board meetings. The Board shall ensure that there is satisfactory control of the Company's compliance with laws and other rules that apply to the Company's operations. The Board shall ensure that the required ethical guidelines are established and followed concerning the Company's conduct. External disclosure must be characterized by openness and objectivity as well as high relevance for the audience it targets. In its work, the Board shall pay particular attention to any conflicts of interest that may arise between the Company's Board of Directors and other stakeholders, such as bondholders, suppliers or customers. The Board shall ensure that its members take care of the Company's interests and do not represent the interests of several parties that conflict with each other. The Chairman shall lead the Board's work and ensure that the Board fulfils its duties. The chairman shall thereby ensure that the board meets when necessary, that the members are allowed to attend the meetings and that they receive satisfactory information to make informed decisions, and that the working method is otherwise appropriate and that an open and constructive discussion is encouraged. The Chairman shall receive the views of the owners and disseminate them within the Board, and check that the Board's


decisions are executed effectively. The Chairman shall continuously co-operate with the President to keep himself informed of significant events and the Company's development between meetings of the Board, and to support the President in his work. After consultation with the President, the Chairman shall establish the agenda for the meetings of the Board. The Company's Board meetings discuss, among other things, strategy and business plans, evaluation of the Company's operations and financial situation, acquisition-related issues and other relevant issues. The Board of Directors makes decisions when more than half of the members are present. The Board currently consists of five members and one alternate. In March 2019, Vidar Andersch, Peder Ramel and Marcus Jennekvist were elected as board members, and Niklas Rohdin was elected as a deputy board member. Carl Fürstenbach resigned as a board member. Also, the Board already consists of Malcolm Lindblom, who is the Chairman of the Board and Niklas Sloutski, who is a Board member. In 2019, nine Board meetings were held in the Company. All members participated in all Board meetings. In the future The Board will conduct annual evaluations of its work where the members are allowed to give their views on, among other things, working methods, board material, their own and other members' efforts, and the scope of the assignment. The evaluation will be carried out after the Board has been active in its current form for over a year (i.e. in the spring of 2020). Audit At the 2019 AGM, Öhrlings PricewaterhouseCoopers AB (PwC) was re-elected to perform audits for Hoist until the next AGM, with Tobias Stråhle as the auditor in charge. Fees to the auditor are paid as agreed. The auditor's task is to review the Company's annual accounts and consolidated accounts, the administration of the Board of Directors and the CEO, as well as the corporate governance report. The company's auditor attends and reports to at least one board meeting per year, and more if necessary. CEO and management team The Chief Executive Officer is responsible for the Company's day-to-day management per instructions for the CEO as determined by the Board of Directors. When meeting with the Company's Board of Directors, the President and CEO shall be the rapporteur and report on, among other things, the Company's financial situation, ongoing operations, and significant events that have occurred following the Board's reporting instructions. The Managing Director shall continuously inform the Chairman of the Board of material issues in the business and together with the Chairman make sure that the members of the Board receive in due time an unbiased, detailed and relevant basis of information for all matters required for the Board to make well-founded decisions. The CEO shall manage the day-to-day management per the Board's guidelines and instructions and in his work ensure that the business is conducted following sound financial principles and in accordance with good corporate standards and business practices in general. The business must be conducted with solvency, liquidity, overview, and control of all risks satisfactory to the scope and nature of the business, so that the commitments to customers, employees, creditors and other relevant actors can be fulfilled. The company has a management team that is continuously responsible for various parts of the business. The management team consists of the CEO, CFO, sales manager, development manager, technical manager, and operations manager. The management team meets regularly to monitor the Company's activities and prepare short and long-term plans. Internal control According to the Swedish Companies Act, the Board is responsible for ensuring that internal control mechanisms are prepared and communicated. To maintain a well-functioning control environment, the Board has established several basic documents such as the Board's rules of procedure, instructions for the CEO, and reporting instructions. Other policies used in the business include certification policy, ESG policy, IT policy, insider policy, a crisis preparedness plan and a personnel handbook. Managers at all levels are responsible for ensuring that internal control procedures are established in their respective areas and that the controls lead to the desired results. The Company's Chief Executive Officer has overall responsibility for the day-to-day work of maintaining the control environment and reports regularly to the Company's Board of Directors.


Risk assessment The company annually identifies internal and external risks that threaten the Group's vision, business concept, goals and strategy. The management team then works actively on the identified risks to establish control activities and counteract the risks.


Auditor’s report on the Corporate Governance Statement

To the general meeting of the shareholders in Hoist Group Holding Intressenter AB, corporate identity number 559094-0689

Engagement and responsibility

I have audited the corporate governance statement for the year 2019 (the financial year 2019)on pages 81-83. It is the board of directors who is responsible for the corporate governance statement and that it has been prepared in accordance with Annual Accounts Act. My responsibility is to express an opinion on the corporate governance statement based on my audit.

The scope of the audit

I conducted our audit in accordance with FAR`s auditing standard RevU 16 The auditor’s examination of the corporate governance statement. That standard requires that I have planned and performed the audit to obtain reasonable assurance that the corporate governance statement is free of material misstatements. An audit includes examining, on a test basis, evidence supporting the information included in the corporate governance statement. I believe that my audit procedures provide a reasonable basis for my opinions.

Opinion

A corporate governance statement has been prepared. It is consistent with the annual accounts and the consolidated accounts and is in accordance with Chapter 6. §6, second paragraph, paragraphs 2–6 of the Annual Accounts Act and Chapter 7. Section 31, second paragraph.

Stockholm, 29 april 2020 Öhrlings PricewaterhouseCoopers AB Tobias Stråhle Authorized Accountant

hoist group holding intressenter ab · 2020. 6. 9. · hoist group holding intressenter ab 3 crn...

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