Interim Report 1 January 31 March 2018

Transcription

1 Interim Report 1 January 31 March 2018 Nynas AB (Publ.), corporate re. no , Parent Company for Nynas. Nynas is a leading international group specialised in naphthenic specialty oils and bitumen. First Quarter Summary Net sales increased to SEK 2,644 million (2,570), as a consequence of a 24 per cent higher oil price level compared to the first quarter of Total product sales volumes decreased by 15 per cent compared to the first quarter 2017, the reason being a slow start of the bitumen season due to the harsh winter conditions in Northern Europe. EBITDA amounted to SEK 84 million (151). A new laboratory in Nynäshamn was opened in January for Nynas specialty oils in the tyre and industrial rubber product segments. Q1 First quarter summary, Key figures 1 President s comments, Market and economic 2 conditions Financial overview 3 Segment information 4 Cash flow 6 Financial position 7 Nynas Consolidated Group Quarterly overview 8 Income statement and statement of 9 comprehensive income Statement of financial position 10 Statement of changes in equity 11 Cash flow statement 12 Condensed financial statements, Parent Company 13 Notes 14 KEY FIGURES Jan Mar SEK million Full year 2017 Net sales 2,644 2,570 14,990 EBITDA 1, ,218 Result after financial items Net income Cash flow from operating activities Cash flow after financing activities Capital expenditures Net debt 2 6,469 5,897 5,471 Working capital 2 4,224 4,339 3,341 Return on average capital employed (12 months rolling) Equity to assets ratio, % Number of full-time employees 1, ,016 1) Excluding non-recurring items. 2) Alternative Performance Measure, refer to page 16 for definitions. 1

2 President s comments Stable demand for naphthenic specialty oils and a very slow start into the bitumen season due to weather conditions in Northern Europe, marked the first quarter of Oil prices continued their way upward due to uncertainty in the Middle East and the impact from OPEC production cuts, putting some pressure on margins as increases in feedstock prices can only be passed on with some time delay. The impact from US sanctions, against state-owned Petroleos Venezuela SA (PSVSA) and therefore indirectly Nynas as a 50 per cent owned PDVSA company, remains unchanged. The effect is seen in the daily management of financing and payments, whereas the sanctions impose no restrictions on Nynas business purchasing crude and selling products. Given the seasonality of our business with bitumen volumes in the first three months only representing around 10 per cent of the yearly volume, the first quarter results only provide limited information regarding the underlying performance. First quarter EBITDA amounted to SEK 84 million (151). Stockholm, May 2018 Gert Wendroth President and CEO, Nynas AB Market and economic conditions Nynas sales are dependent on the economic development in a broad range of industrial sectors as well as infrastructure investments. Naphthenic specialty oils are sold worldwide and used by industrial customers representing different stages of the business cycle in both leading and lagging sectors. Bitumen sales are regional and mainly dependent on investments in road construction and maintenance. After a very strong start to the year with January s composite Purchasing Manager s Index (PMI) at 58.8, the Eurozone s economic activity slowed down and grew at its weakest pace since the start of 2017, as rates of increase moderated in both the manufacturing and service sectors. The quarter s PMI averaged 57, slightly below previous quarter s Even though the decline in the composite PMI over the first quarter from January s 58.8 to February s 57.1 and March s 55.3 seems quite dramatic, analysts expect that the immediate impact on the economy re mains limited, with businesses continuing to hire at a rapid pace and the outlook for growth in the year ahead is still strongly positive. The US composite PMI for the first quarter averaged 54.6, recording no change from the previous quarter, indicating that the economy continued to expand at a robust pace. March rounded off the first quarter in which the PMI surveys indicate that the US economy grew at an annualised rate of approximately 2.5 per cent. The strong inflow of new orders indicates that growth looks set to accelerate into the second quarter. Amongst the BRIC countries, all composite PMI indexes were above the 50-mark, indicating expansion. In particular, Brazil s first quarter PMI averaged 51.8, recording a significant increase from last quarter s 49.1, with factory production expanding at its second-fastest pace in over five years during March. The average Brent crude price for the first quarter was 67 USD/bbl, approximately 24 per cent higher compared to 54 USD/bbl for the same period last year. Assuming the OPEC/ non-opec output cut agreement is extended, OECD inventories will be further reduced and prices of crude supported and can be expected to stay firm. Higher prices are encouraging forward producer hedge selling which together with tightening inventories increase the risk of the market extending the present backwardation situation. The substantial weakening of the Swedish krona in the first quarter had a positive impact on Nynas earnings when reported in SEK. The Swedish krona weakened against the US dollar by 9 per cent, against the British pound by 2 per cent and by 5 per cent against the euro. 2

3 Financial overview Net sales for the first quarter reached SEK 2,644 million (2,570), as a consequence of the 24 per cent higher oil price level, offset by lower sales volumes in the bitumen segment. The normal seasonally low activity was worsened due to harsh winter conditions, particularly in the Nordic area. The majority of bitumen sales and operating results are generated in the second and third quarter each year. EBITDA amounted to SEK 84 million (151) for the first quarter. Net financial items for the first quarter amounted to SEK -93 million (-44) of which SEK -76 million (-39) is related to net interest expenses, explained by approxi mately 20 per cent higher utilisation of credit facilities mainly as a consequence of increased cash balances to manage under sanctions. CONDENSED INCOME STATEMENT SEK million Jan Mar Full year 2017 Net sales 2,644 2,570 14,990 EBITDA 1, ,218 Depreciation Non-recurring items incl. write-down of assets EBIT after non-recurring items Net financial items Net income before tax Tax Net income for the year/period ) Excluding non-recurring items. 2) Alternative Performance Measure, refer to page 16 for definitions. 3

4 Segment information Naphthenics The overall sales volumes during the first quarter of 2018 were equivalent to the same quarter last year. Sales margins showed a decrease as sales prices could not be raised as quickly as the increase in cost of goods sold. EMEIA (Europe, Middle East, India and Africa) sales volu mes during the first quarter of 2018 were in line with expec tations and similar to the same period in 2017, despite two fewer working days during the quarter. Sales volumes in India continue to rise and set a new record for a quarter. Volumes in the Americas in the first quarter of 2018 were below the same period in the previous year mainly due to continued supply constraints, whereas Asia Pacific sales volumes in the quarter were 7 per cent higher than in the same period in First quarter external sales increased to SEK 1,927 million (1,846) mainly driven by increasing crude oil prices feeding into higher sales prices. Operating result before depreciation (EBITDA) decreased to SEK 129 million (205), explained mainly by a faster increase in cost of goods sold compared to price increases for finished products. Bitumen Sales volumes for all of the bitumen regions have been negatively impacted by the harsh winter conditions causing a delayed start of the season. As the season kicks in we expect healthy demand in most markets and a fast picking up of volumes. The Nordic countries experienced up to three weeks delay in the ramp-up of the season which has impacted the first quarter volumes negatively. The main sales have been in the industrial segment, with no or very low sales of specialty grades like emulsions and polymer-modified bitumen during the quarter. Western Europe sales volumes were sluggish in the first quarter due to poor weather in Germany and Benelux. The forecast anticipates a recovery with continued focus on further developing the potential of the Harburg bitumen loading gantry. The UK volumes were equally below plan principally due to inclement weather conditions, but also due to some three weeks of industrial action by drivers from one of Nynas hauliers based at Eastham. The poor weather mainly affected the micro-surfacing volumes as programme start dates were pushed back to after Easter. First quarter external sales increased to SEK 729 million (718) mainly driven by increased crude oil prices and a stronger British pound, offset by lower sales volume. Operating result before depreciation (EBITDA) was SEK -60 million (-5) in the seasonally low bitumen sales period exacerbated by negative weather conditions. 4

5 SEGMENT BUSINESS AREA SEK million Jan Mar Full year 2017 NET SALES NAPHTHENICS External sales 1,927 1,846 7,686 Internal sales NET SALES NAPHTHENICS 1,927 1,846 7,686 BITUMEN External sales ,277 Internal sales NET SALES BITUMEN ,305 OTHER/ELIMINATIONS External sales Eliminations NET SALES OTHER TOTAL NET SALES 2,644 2,570 14,990 EBITDA Naphthenics Bitumen Other/eliminations TOTAL EBITDA 1, ,218 1) Excluding non-recurring items. 2) Alternative Performance Measure, refer to page 16 for definitions. Major product lines: Bitumen Specialty oils Fuel Total NET SALES NAPHTHENICS Primary geographical markets: EMEIA region 1, ,366 APAC region Americas region Global NET SALES NAPHTHENICS 1, ,927 BITUMEN Primary geographical markets: Nordic, Iceland, Baltics & Poland UK, Ireland & Rest of Europe NET SALES BITUMEN OTHER/ELIMINATIONS TOTAL NET SALES 672 1, ,644 Timing of revenue recognition: Goods transferred at point of time 672 1, ,644 5

6 Cash flow In the first quarter cash flow from operating activities totalled SEK -903 million (-918). This is attributed to the lower earnings generation in the first quarter offset by the somewhat lower working capital level. Working capital increased by SEK -833 million (-987) from the end of last year mainly due to the increased oil prices partly offset by lower volumes in inventory. Cash capital expenditures increased to SEK 82 million in the first quarter compared to SEK 54 million in the previous year, with the bulk of the expenditures relating to maintenance investments. CONDENSED STATEMENT OF CASH FLOWS SEK million Jan Mar Full year 2017 Cash flow from operating activities before changes in working capital Change in working capital CASH FLOW FROM OPERATING ACTIVITIES Cash flow from investing activities CASH FLOW AFTER INVESTING ACTIVITIES

7 Financial position The seasonal pattern of Nynas bitumen business is reflected in the development of the financial position during the period. Working capital at the end of March 2018 decreased by SEK 155 million compared to the same period last year, impacted by the higher oil price level offset by lower volumes in inventory. However, it increased by SEK 883 million since the end of last year due to normal seasonal inventory build-up impact. Inventory less crude payable is higher compared to the same period last year by around SEK 300 million due to the higher oil price level of SEK 700 million offset by lower volumes in inventory of SEK 400 million and it is around SEK 800 million higher compared to the end of The increase from the end of the year is a normal pattern reflecting the start up of the bitumen season. Current receivables at the end of March 2018 reached SEK 2,249 million, which is a decrease of SEK 28 million compared to the same period last year. The development was driven by the higher oil price level offset by lower sales volume. Net debt increased by SEK 572 million compared with the same period last year, primarily reflecting the capital expenditures in fixed assets and financing of the negative result in the first quarter of Nynas management and the Board are conducting negotiations of alternatives for refinancing of a bond loan that matures by the end of June. CONDENSED BALANCE SHEET SEK million 31 Mar Mar Dec 2017 Tangible and intangible assets 5,550 5,361 5,498 Financial assets Inventory 4,551 4,150 3,352 Current receivables 2,249 2,376 2,277 Cash and bank deposits TOTAL ASSETS 13,892 12,633 12,262 Equity 3,549 3,737 3,539 Long-term interest-bearing liabilities 6,122 5,816 4,667 Long-term non-interest-bearing liabilities Long-term non-interest-bearing provisions Current interest-bearing liabilities 1, ,350 Current non-interest-bearing liabilities 2,575 2,186 2,287 Short-term non-interest-bearing provisions TOTAL EQUITY & LIABILITIES 13,892 12,633 12,262 NET DEBT 1 6,469 5,897 5,471 WORKING CAPITAL 1 4,224 4,339 3,341 1) Alternative Performance Measure, refer to page 16 for definitions. 7

8 NYNAS CONSOLIDATED GROUP Quarterly overview SEK million Q Q Q Q Q Q Q Q Net sales 2,644 3,501 4,538 4,381 2,570 3,184 3,813 3,318 EBITDA 1, Result after financial items Net income Cash flow from operating activities Cash flow after financing activities Cash capital expenditures Net debt 6,469 5,471 5,668 6,164 5,897 4,895 5,022 4,758 Working capital 4,224 3,341 4,084 4,681 4,339 3,163 3,434 3,178 Return on average capital employed (12 month rolling), % Equity to assets ratio, % Number of full-time employees 1,008 1,016 1,018 1, ,013 1,019 1,010 1) Excluding non-recurring items. 2) Alternative Performance Measure, refer to page 16 for definitions. 8

9 NYNAS CONSOLIDATED GROUP Income statement and statement of comprehensive income SEK million Jan-Mar 2018 Jan-Mar 2017 Full year 2017 INCOME STATEMENT Net sales 2,644 2,570 14,990 Cost of sales -2,059-2,020-11,710 GROSS RESULT ,280 Other income and value changes Distribution costs ,909 Administrative expenses Share of profit/loss of joint ventures Other operating income Other operating expenses OPERATING RESULT Finance income Finance costs NET FINANCIAL ITEMS NET INCOME BEFORE TAX Tax NET INCOME FOR THE YEAR/PERIOD STATEMENT OF COMPREHENSIVE INCOME Net income for the year/period Items that will be reclassified to the income statement: Translation differences Currency hedges of net investments Income tax associated with currency hedges of net investments Cash flow hedges Income tax associated with cash flow hedges TOTAL AMOUNT THAT WILL BE RECLASSIFIED TO THE INCOME STATEMENT Items that will not be reclassified to the income statement: Actuarial gains/losses pensions Income tax associated with actuarial gains/losses pensions TOTAL AMOUNT THAT WILL NOT BE RECLASSIFIED TO THE INCOME STATEMENT Other comprehensive income for the year/period, net after tax COMPREHENSIVE INCOME Attributable to shareholders of the Parent Company

10 NYNAS CONSOLIDATED GROUP Statement of financial position SEK million 31 Mar Mar Dec 2017 Intangible assets Tangible assets 5,474 5,306 5,419 Investments in associates and joint ventures Long-term receivables Deferred tax assets TOTAL FIXED ASSETS 6,214 5,776 6,088 Inventories 4,551 4,150 3,352 Account receivables 1,399 1,412 1,344 Derivative instruments Tax receivables Other current receivables Cash and cash equivalents TOTAL CURRENT ASSETS 7,678 6,858 6,174 TOTAL ASSETS 13,892 12,633 12,262 EQUITY 3,549 3,737 3,539 Liabilities to credit institutions 5,269 4,983 3,830 Provisions for pensions TOTAL LONG-TERM INTEREST-BEARING LIABILITIES 6,122 5,816 4,667 Other long-term liabilities Derivative instruments Deferred tax liability Provisions for pensions Other provisions TOTAL LONG-TERM NON-INTEREST-BEARING LIABILITIES Liabilities to credit institutions 1, ,350 Accounts payable Liabilities to joint ventures Derivative instruments Tax liabilities Other current liabilities Accrued liabilities and deferred income 1,260 1,004 1,072 Other provisions TOTAL CURRENT LIABILITIES 3,831 2,726 3,670 TOTAL EQUITY AND LIABILITIES 13,892 12,633 12,262 10

11 NYNAS CONSOLIDATED GROUP Statement of changes in equity SEK million Share capital Defined benefit pension plans Cash flow hedges Currency hedge of net investments Translation reserve Retained earnings Total equity OPENING BALANCE JAN 1, ,070 3,661 Net income for the period Other comprehensive income COMPREHENSIVE INCOME Dividend paid CLOSING BALANCE MAR 31, ,045 3,737 OPENING BALANCE JAN 1, ,079 3,539 Net income for the period Other comprehensive income COMPREHENSIVE INCOME Dividend paid CLOSING BALANCE MAR 31, ,967 3,549 11

12 NYNAS CONSOLIDATED GROUP Cash flow statement SEK million Jan-Mar 2018 Jan-Mar 2017 Full year 2017 OPERATING ACTIVITIES Profit after financial items Adjustment for items not included in the cash flow: Share of profit of associates and joint ventures Dividend associates 1 Depreciation, and impairment of assets Reclassification of current receivables -205 Unrealised exchange differences and forward contracts Provision for pensions Other provisions Taxes paid/received CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN WORKING CAPITAL Cash flow from changes in working capital CASH FLOW FROM OPERATING ACTIVITIES INVESTMENT ACTIVITIES - Acquisition of intangible assets Acquisition of tangible fixed assets Investment in financial assets and environmental liabilities Disposal/reduction of financial assets CASH FLOW FROM INVESTMENT ACTIVITIES FINANCING ACTIVITIES Amortisation of borrowings -103 Proceeds from borrowings 1, CASH FLOW FROM FINANCING ACTIVITIES 1, CASH FLOW FOR THE YEAR/PERIOD CASH & CASH EQUIVALENTS AT BEGINNING OF YEAR/PERIOD Exchange differences CASH & CASH EQUIVALENTS AT END OF YEAR/PERIOD

13 NYNAS PARENT COMPANY Condensed financial statements, Parent Company SEK million Jan-Mar 2018 Jan-Mar 2017 Full year 2017 CONDENSED INCOME STATEMENT Net sales 2,264 2,288 13,006 OPERATING RESULT Finance income ,221 Finance costs NET FINANCIAL ITEMS Appropriations NET INCOME BEFORE TAX Tax NET INCOME FOR THE YEAR/PERIOD STATEMENT OF COMPREHENSIVE INCOME Net income for the year Items that will be reclassified to the income statement: Cash flow hedges Income tax associated with cash flow hedges TOTAL AMOUNT THAT WILL BE RECLASSIFIED TO THE INCOME STATEMENT Items that will not be reclassified to the income statement: Acquisition / pensions TOTAL AMOUNT THAT WILL NOT BE RECLASSIFIED TO THE INCOME STATEMENT Other comprehensive income for the year, net after tax COMPREHENSIVE INCOME SEK million 31 Mar Mar Dec 2017 CONDENSED BALANCE SHEET Fixed assets 6,047 5,971 6,029 Inventories 3,770 3,350 2,637 Current receivables 2,074 1,731 2,068 Cash and cash equivalents and short-term investments TOTAL ASSETS 12,141 11,105 10,822 Equity 2,128 1,808 2,405 Untaxed reserves Long-term interest-bearing liabilities 5,451 5,154 4,007 Long-term non-interest-bearing liabilities Current interest-bearing liabilities 2,229 2,013 2,343 Current non-interest-bearing liabilities 2,156 1,893 1,872 TOTAL EQUITY AND LIABILITIES 12,141 11,105 10,822 13

14 NOTES Notes to the financial statements Note 1. Company information Nynas Group comprises the Parent Company Nynas AB (publ), its subsidiaries and holdings in joint ventures. The Parent Company is incorporated in Sweden and its registered office is in Stockholm. The address of the head office is Lindetorpsvägen 7, SE Johanneshov. Nynas AB is per cent owned by Neste AB, reg. no , registered office in Stockholm, Sweden, and per cent by PDV Europa B.V., reg. no , registered office in The Hague, Netherlands. Neste AB is part of a group in which Neste Oyj, reg. no. FI with registered office in Espoo, Finland, is the ultimate parent. PDV Europa B.V, is part of a group in which Petróleos de Venezuela S.A., reg. no , registered office in Caracas, Venezuela, is the ultimate parent. Note 2. Accounting and valuation policies As in the annual accounts for 2017, Nynas consolidated financial statements 2018 have been prepared in accordance with International Financial Reporting Standards (IFRS) and, given the nature of Nynas transactions, with IFRS as adopted by the European Union. The Parent Company Nynas AB s financial statements have been prepared in accordance with the Swedish Annual Reports Act as well as standard RFR 2 Accounting for Legal Entities and other statements issued by the Swedish Financial Reporting Board. This report has been prepared in accordance with IAS 34 Interim Financial Reporting. The accounting policies adopted are consistent with those of the previous financial year. The Group s operations are organised in two business areas, Bitumen and Naphthenics. The market organisation also reflects this structure. In accordance with IFRS 8, segment information is presented only on the basis of the consolidated financial statements. Group staff functions and group-wide functions are allocated based on those items that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the segments. Unallocated items for functions are reported under the heading Other. Items where the accounting method differs between the Business Areas and the Group are also reported under Other. Nynas applies the new standard IFRS 9 Financial Instruments from 1 January 2017 which is one year earlier than the effective date. The standard replaces IAS 39 Financial Instruments: Recognition and Measurement and provides a logical model for classification and measurement. It is a single, forward-looking expected loss impairment model and a substantially reformed approach to hedge accounting. IFRS 15 revenues from contracts with customers replace existing revenue standards and interpretations. The standard is endorsed by the EU and is effective 1 January Nynas revenues come from the sale of bitumen and naphthenic products and are normally recognised when goods are delivered to the customers, which is in line with IFRS 15. All amounts in this report are presented in SEK million, unless otherwise stated. Rounding differences may occur. Note 3. Sustainability Nynas sustainable development ambition is formulated as securing the future and creating value, with the goal to protect and create long-term economic and brand value for the company and its stakeholders. Nynas aims to do this through proactively contributing to sustainable development by demonstrably improving the impact of its economic, environmental and social activities. Nynas commitment to sustainable development is reflected in the company s business governance and through the group-wide sustainable development policy. Steered by policies The sustainable development policy is linked to a number of policies that address the environmental, economic and social aspects of sustainable development. These policies collectively steer Nynas corporate responsibility approach and include: The Code of Conduct Competition Compliance Global Anti-bribery and Anti-corruption Health, Safety, Security, Environment and Quality (HSSE&Q) People and Human Rights Procurement Nynas subscribes to the International Chamber of Commerce (ICC) Business Charter for Sustainable Development and is certified according to ISO 9001, ISO 14001, OHSAS and ISO in the UK and Germany. 14

15 NOTES Note 4. Seasonal variations Nynas operations in bitumen show seasonal variations particularly in the Nordic area. The majority of net sales and operating result is generated in the second and third quarters. During a rolling twelvemonth period ending 30 March 2018, net sales amounted to SEK 15,065 million and EBITDA to SEK 1,151 million. Note 5. Loan financing and credit rating Nynas did not receive any new funding during the first quarter. Note 6. Investments SEK million Jan-Mar 2018 Jan-Mar 2017 Full year 2017 CASH CAPEX ONGOING BUSINESS ACQUISITIONS AND OTHER INVESTMENTS Cash Capex 52 Commitment Capex Note 7. Reporting of financial instruments Classification and measurement, IFRS 9 contains a new classification and measurement approach for financial assets that reflect the business model in which assets are managed and their cash flow characteristics. IFRS 9 contains three principal classification categories for financial assets: measured at amortised costs, FVOCI and FVTPL. Nynas does not have any impact on the new classification requirements. Impairment, IFRS 9, replaces the incurred loss model in IAS39 with a forward-looking expected credit loss (ECL) model. The new impairment model will apply to financial assets measured at amortised costs (trade receivables). Nynas applies the simplified approach for trade receivables. Nynas documents its risk management objective and strategy for undertaking various hedge transactions. Nynas designates their derivatives as hedges of foreign exchange risk and oil price risk associated with the cash flows of highly probable forecast transactions (cash flow hedges). Nynas documents at the inception of the hedging transaction the economic relationship between hedging instruments and hedged items including whether the hedging instrument is expected to offset changes in cash flows of hedged items. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged and the type of hedge relationship are designated. 15

16 NOTES Note 8. Related party transactions The following table provides the total amount of transactions that have been entered into with related parties during the first three months ending on 31 March 2018 and 2017, as well as balances with related parties as of 31 March 2018 and Further information regarding the related parties can be found in the Annual Report. SEK million Sales to related parties Purchases from related parties Receivables from related parties Payables to related parties ENTITY WITH SIGNIFICANT INFLUENCE OVER THE GROUP: Petroleos de Venezuela S.A. (PDVSA) , , Neste Oyj (Neste) JOINT VENTURE: Eastham Refinery Ltd. (ERL) (50 per cent of ERL s total production) Note 9. Definitions and reconciliations of alternative performance measures APMs refer to measures used by management and investors to analyse trends and performance of the Group s operations that cannot be directly read or derived from the financial statements. These measures are relevant to assist management and investors in analysing the Group s performance. Investors should not consider these APMs as substitutes, but rather as additions to the financial reporting measures prepared in accordance with IFRS. It should be noted that these APMs as defined, may not be comparable to similarly titled measures used by other companies. EBITDA EBITDA is a measure of earnings before interest, taxes, depreciation, amortisation and impairment charges. EBITDA measures the Nynas Group s operating performance and the ability to generate cash from operations, without considering the capital structure of the Group or its fiscal environment. EBITDA is defined as operating result before depreciation. For a reconciliation refer to page 3. Non-recurring items including write down of assets To assist in understanding Nynas Group s operations, it is useful to consider certain measures and ratios exclusive of non-recurring items that have a significant impact and are considered to be important for understanding the operating performance when comparing results between periods. Non-recurring items affecting comparability are disclosed in the following table. Non-recurring items SEK million Q1 Q2 Q3 Q4 Full year 2018 Other items 0 0 TOTAL Extraordinary costs due to impact from volatile crude supply and higher transportation costs Change in environmental provision Restructuring costs Other items TOTAL

17 NOTES Last twelve months (LTM) Last twelve months rolling has been included to assist investors in their analysis of the seasonality that the Nynas Group s business is exposed to. Refer to Note 4 on page 15. Net debt Net debt is a measure to describe the Group s gearing and its ability to repay its debts from cash generated from the Group s ordinary business (see cash flow below), if they were all due today. It is also used to analyse whether the Group is over- or underfunded and how future net interest costs will impact earnings. Net debt is defined as long-term interest-bearing liabilities and current interest-bearing liabilities reduced by cash and bank deposits. For a reconciliation refer to page 7. Working Capital This measure shows the seasonal fluctuations that the Nynas Group is exposed to in the Bitumen business, with a peak in the high season in quarters two and three each year. Working capital is defined as inventories plus current non-interest-bearing receivables, reduced by current non-interest-bearing liabilities. Return on average capital employed (12 months rolling) EBIT excluding non-recurring items as percentage of average total assets less non-interest-bearing liabilities, 12 months rolling. For additional definitions refer to the Group s Annual Report. Note 10. Important events after reporting period No important events have taken place after the reporting period. The report has not been reviewed by Nynas auditors. Stockholm, May 2018 Gert Wendroth President and CEO 17

18 Nynas AB Box Visiting address: Lindetorpsvägen 7 SE Stockholm, Sweden Phone: G ENG 18