AB Traction : 22Q3

Interim Report

January - September 2022

Period Juli - September

• Profit after taxes amounted to MSEK -205 (198), distributed as follows: o Active listed holdings MSEK -216 (119)
  o Unlisted holdings MSEK 1 (30)
  o Financial investments MSEK 12 (50)
• Earnings per share amounted to SEK -13.88 (13.36)
• Net asset value per share decreased by 5 percent
• The return on active listed holdings was approximately -15 percent
• The return on other listed shares was approximately 1 percent

Period January - September

• Profit after taxes amounted to MSEK -593 (858), distributed as follows: o Active listed holdings MSEK -439 (534)
  o Unlisted holdings MSEK -24 (81)
  o Financial investments MSEK -122 (248)
• Earnings per share amounted to SEK -40.12 (58.01)
• Net asset value per share amounted to SEK 241 (286)
• Net asset value per share decreased by 14 (+30) percent adjusted for paid dividend
• The return on active listed holdings was approximately -26 percent
• The return on other listed shares was approximately -15 percent

Events after the end of the period

• The change in value, including dividend income on listed holdings since 30 September amounts to MSEK 36 as of 24 October 2022, whereof active listed holdings amount to MSEK -24 and other listed shares MSEK 60.

Traction in brief

Traction is an investment company with active ownership interest in listed and unlisted small- and medium-sized companies. Traction is also engaged in investment activities for the purpose of obtaining a good yield on the Company's capital through financial investments, mainly in other listed companies and interest-bearing assets. Traction's role as owner is based on an active and long-term engagement in close cooperation with other active owners, entrepreneurs and corporate management groups. Traction does not focus on singular industries. Traction instead is engaged in development and transformation work applicable to all companies intending to prioritize business sense, a long-term approach and sound business principles. Traction's shares are traded on NASDAQ Stockholm (the Mid Cap list). More information is availableat www.traction.se.

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Traction's net asset value

The table below shows Traction's net asset value as of 30 September 2022.

	Number	Price	Percentage	Percentage	Market	Percentage	SEK/
Holdings	of shares	per	of	of	value	of
share
	thousands	share	capital	votes	MSEK	total
Active listed holdings
BE Group	3,260	80.80	25%	25%	263	7%	18
Drillcon	24,000	5.09	54%	54%	122	3%	8
Driver Group Plc	11,023	3.90	21%	21%	43	1%	3
Hifab Group	32,944	2.16	54%	55%	71	2%	5
Nilörngruppen	3,000	84.10	26%	58%	252	7%	17
OEM International	4,455	57.00	3%	10%	254	7%	17
Softronic	11,589	20.90	22%	20%	242	7%	16
Total					1,248	35%	84
Unlisted holdings
Unlisted holdings					280	8%	19
Due from unlisted holdings					23	1%	2
Total					303	8%	21
Total active listed and unlisted holdings				1,552	43%	105
Financial investments, cash and cash equivalents
Other listed shares¹					696	20%	47
Interest-bearing investments2					1,099	31%	74
Cash and cash equivalents					222	6%	15
Total					2,018	57%	136
TOTAL					3,569	100%	241

2Including interest-bearing investments with a maturity of less than one year in the amount of MSEK 509.8 and other net asset/liabilities in the amount of MSEK -2.1.

¹Other listed shares where Traction's ownership exceeds five percent of the number of shares outstanding:

	Number of	Percentage	Market value
Holding	shares	of capital	MSEK
	thousands
Duroc	2,925	8%	57
PION Group (former Poolia)	2,700	6%	30
Portmeirion Group Plc	955	7%	38
TOTAL			125

Interim Report January-September 2022

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President's Statement

Traction shows a result of MSEK -205 (198) for the third quarter, which corresponds to a decrease in net asset value of approximately

5 percent. The entire decline in net asset value is explained by the active listed holdings, which burdened the result with MSEK 216, corresponding to a return of -15 percent. Traction's financial investments contributed positively by MSEK 12, of which listed shares MSEK +4 (+1 percent) at the same time as the Stockholm Stock Exchange generally decreased by approximately 2 percent.

For the nine-month period, the result is MSEK -593 (858), corresponding to a decrease in net asset value of approximately 14 (+30) percent adjusted for dividends paid.

In addition to focusing on our existing holdings, Traction's ambition is to take advantage of the business opportunities that may arise in a generally weaker and uncertain global climate.

PERIOD JULY - SEPTEMBER

Summary

Profit after tax amounted to MSEK -205 (198), which includes changes in value of MSEK -214

1. and dividend income of MSEK 1 (2). Financial income amounted to MSEK 12 (7).

Active listed holdings

Active listed holdings contributed MSEK -216 (119), equivalent to a return of approximately -15 percent. Changes in value amounted to MSEK -216 (119) and dividend income was MSEK 0 (0). All active listed holdings burdened the result; whereof BE Group MSEK -74, Nilörngruppen MSEK -50 and OEM International MSEK -37. During the period 41,162 shares in BE Group have been purchased for MSEK 4.

	Changes in value1 (MSEK)		2022
		Q3
	BE Group	-74
	Drillcon	-17
	Driver Group Plc	-3
	Hifab Group	-7
	Nilörngruppen	-50
	OEM International	-37
	Softronic	-28
	Profit active listed holdings		-216

1Including dividends as amounted to MSEK 0.

Unlisted holdings

Unlisted holdings impacted profit by MSEK

1 (30), which includes revaluation of shares by MSEK 0 (30) and revaluation of loan receivables by MSEK 1 (0) and dividend income of MSEK 0 (0).

Financial investments

Other listed holdings contributed MSEK 12 (50), divided into shares MSEK 4 (42) and interest-bearing investments MSEK 9 (7).

The change in value of other listed shares was MSEK 3 (41) and dividend income amounted to MSEK 1 (2), of which the British engineering consultancy firm RPS Group contributed positively by MSEK 20 and Arise MSEK 13, whereas Duroc burdened the result by MSEK -16.

The top five holdings as of September 30 in terms of market cap consist of Duroc (MSEK 57), Volkswagen (MSEK 55), Wallenius Wilhelmsen (MSEK 53), Swedbank (MSEK 44) and Portmeirion Group (MSEK 38). Shares amounting to approximately MSEK 18 have been divested in RPS Group. In total, shares have been divested for a net MSEK 18. Changes in value of interest-bearing investments amounted to MSEK -3 (0) and interest income was MSEK 11 (7), of which changes in value of convertible bonds amounts to MSEK 1 (-3).

Interim Report January-September 2022

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Traction's cash position as of 30 September amounted to MSEK 222 (467). Interest-bearing investments amounted to MSEK 1,101 (876), of which MSEK 510 (369) are investments in commercial papers and similar instruments with a tenor of less than one year and MSEK 591 (507) in corporate bonds and similar instruments. Holdings in other listed shares amounted to MSEK 696 (769).

Tax

Tax cost of MSEK 1 refers to the financial year 2021 where a revised tax calculation, as a result of re-examination at the company's request of declarations for previous years, shows a positive tax surplus in one of Traction's central subsidiaries. The group's loss carry-forward, which has been significant over the years, was used in 2021 as a consequence of good results in both the interest-bearing investments and in the wholly owned subsidiary Ankarsrum Kitchen AB.

PERIOD JANUARY - SEPTEMBER

Summary

Profit after tax amounted to MSEK -593 (858), which includes changes in value of MSEK -725

1. and dividend income of MSEK 110 (79). Financial income amounted to MSEK 29 (23). The net asset value decreased during the period by 14 (+30) percent adjusted for dividend paid of MSEK 72.

Active listed holdings

Active listed holdings contributed MSEK -439 (534), equivalent to a return of approximately -26 percent. Changes in value amounted to MSEK -515 (469) and dividend income was MSEK 76 (65). Nilörngruppen contributed positively to the result by MSEK 20, whereas the other active listed holdings had a negative impact. The major negative impact to the result was OEM International by MSEK -144 and BE Group MSEK -129. During the period, shares amounting to a net MSEK 17 have been divested. During the period OEM International executed a 2-for-1 stock split. Shares amounting to MSEK 21 have been divested in OEM International, at SEK 104.25 per share

(after stock split) as well as redemption shares of MSEK 7. Shares have been acquired in BE Group for just over MSEK 9 and in Driver Group for approximately MSEK 1.

	Changes in value1 (MSEK)		2022
		9 months
	BE Group	-129
	Drillcon	-74
	Driver Group Plc	-22
	Hifab Group	-11
	Nilörngruppen	20
	OEM International	-144
	Softronic	-79
	Profit active listed holdings		-439

1Including dividends as amounted to MSEK 76 and redemption shares MSEK 7.

Unlisted holdings

Unlisted holdings impacted profit by MSEK -24 (81), which includes revaluation of shares by MSEK -37 (80) and revaluation of loan receivables by MSEK 1 (0) and dividend income of MSEK 11 (1). The revaluations mainly pertain to MSEK +13 for Sigicom and MSEK -40 for Ankarsrum Industries in the second quarter.

Financial investments

Other listed holdings contributed MSEK -122 (248), divided into shares MSEK -117 (192) and interest-bearing investments MSEK -6 (56).

The change in value of other listed shares was MSEK -140 (180) and dividend income amounted to MSEK 23 (13), of which Duroc had a negative impact by MSEK -37, Portmeirion Group MSEK -25 and NCC MSEK -21. Shares amounting to approximately MSEK 36 have been divested in Stora Enso and in Wallenius Wilhelmsen by approximately MSEK 27. In total, shares have been acquired for a net MSEK 67, of which MSEK 21 relates to the conversion of previous holdings of convertibles in Arise. Changes in value of interest-bearing investments amounted to MSEK -34 (32) and interest income was MSEK 28 (23). Change in value of convertible bonds amounts to MSEK 3 (8).

Interim Report January-September 2022

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Equity/Net asset value

Equity amounted to MSEK 3,569 as of

30 September (4,235) equivalent to SEK 241

1. per share. The number of shares outstanding as of 30 September was 16,000,000, of which 1,800,000 of Class A. Not including repurchased shares (1,210,153 equivalent to 8 percent), the number of shares outstanding was 14,789,847, of which 1,800,000 were Class A shares.

Parent Company

AB Traction's result for the period January- September amounted to MSEK -466 (688). The cash position amounted to MSEK 182 (410), not including investments in short-term interest- bearing investments with a maturity of less than one year of MSEK 478 (301). The Parent Company has no external loans.

Transactions with closely related parties

There have been no transactions between Traction and closely related parties that have significantly affected the Group's and the Parent Company's financial position during the period. There were the usual transactions between wholly and majority owned companies in the Traction Group, including loans, interest charges, repayments, dividends/Group contributions and some charges for services provided.

Risks and uncertainty factors

Traction's significant risk and uncertainty factors include business risks in the form of exposure to certain industries, or an individual holding, as well as dependency on individual key persons in the companies in which Traction has an ownership interest. In addition, there are financial risks, which primarily consist of price risks, i.e. the risk of a change in value of a financial instrument due to changes in share prices, derivatives, bonds, foreign exchange rates or interest rates. In addition to the risks described in Traction's Annual Report in general by reason of the Company's business orientation, specific reference can be made to the Report of the Board of Directors and accompanying notes for a more detailed discussion of the Group's

and the Parent Company's risk exposure and risk management procedures. Beyond that, no additional significant risks are deemed to have been added.

Accounting policies

This interim report for the Group has been prepared in accordance with IAS 34 - Interim Financial Reporting and applicable provisions of the Swedish Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance with the Swedish Annual Accounts Act. Traction is an investment company in accordance with IFRS 10, which means that Traction applies the statutory exceptions to consolidation of subsidiaries.

In all other respects the same accounting policies and calculation methods have been applied as in the most recent annual report. Comparative data refer to the corresponding year-ago period, except in the case of balance sheet items and liquidity metrics which refer to the prior year-end.

Interim Report January-September 2022