INTERIM REPORT. Zinzino AB. Zinzino Nordic AB 93% INFORMATION ABOUT THE COMPANY GROUP STRUCTURE

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1 INTERIM REPORT Zinzino AB (publ.) is a leading direct sales company, represented in Sweden, Norway, Denmark, Finland, Estonia, Latvia, Lithuania, Iceland, the Faroe Islands and the USA. Zinzino markets and sells functional food and coffee. The functional food product line consists of the Balance products: oil, shake, test and capsules. The coffee production line consists of espresso machines, coffee, tea and accessories. Our business is characterized by high quality, proximity to the customer and a focus on active product development. Our products are marketed through direct selling. The company has around 50 employees with its head office located in Gothenburg. INFORMATION ABOUT THE COMPANY Zinzino was founded in 2007 under the name Zinzino Holding. During 2009 the company acquired 93% of the share capital and 97% of the votes in Zinzino Nordic AB, partly through an issue in kind during the spring and partly through a directed issue. Zinzino Nordic uses independent distributors to market and sell their products through direct selling. GROUP STRUCTURE Zinzino AB Zinzino Nordic AB 93% SIA Zinzino (Latvia) Zinzino Ehf (Iceland) Zinzino Sverige AB Zinzino Oy (Finland) Zinzino Aps (Denmark) Zinzino AS (Norway) Zinzino UAB (Lithuania) Zinzino OÜ (Estonia) Zinzino LLC (USA) 1 Interim report January June 2014 Zinzino AB (publ), org.no

2 GROWTH AND EARNINGS IN FOCUS SECOND QUARTER Total revenue amounted to SEK 79.6 (53.4) million, representing a growth of 49% compared to the previous year. Operating profit amounted to SEK 3.5 (1.4) m and operating margin to 4.4%. Profit before tax was SEK 3.6 (1.3) million. Earnings per share for the quarter amouned to SEK 0.13 (0.05). Implemented processes to kickstart sales in Poland and Holland. Zinzino also launched its new product BalanceOil Capsules and applied for a change in listing from Aktietorget to OMX Nasdaq First North. THE FIRST HALF-YEAR Total revenue amounted to SEK (108.1) million, representing a growth of 44% compared to the previous year. Operating profit amounted to SEK 6.2 (1.2) m and operating margin to 4.0%. Profit before tax was SEK 6.5 (1.3) million. Earnings per share for the quarter amouned to SEK 0.24 (0.05) As per the balance sheet date, cash amounted to SEK 26.4 (1.8) million. The group's equity/assets ratio amounted to 39.1% (27.9). The Board of Directors and management feel very confident with the existing financial base in the group. THE GROUP'S KEY RATIOS Q Q H H Net sales Total income Sales growth 49% 70% 44% 77% Gross profit Gross profit margin 26.20% 29.74% 26.87% 24.48% Operating profit before depreciation/amortization Operating margin before depreciation/amortization FINANCIAL SUMMARY % 2.88% 4.32% 1.41% Operating profit Operating margin 4.39% 2.54% 3.98% 1.08% Profit/loss before tax Earnings per share before tax Liquid assets Equity/assets ratio 39% 28% 39% 28% Equity per share Zinzino's financial targets During the period , average sales growth in Zinzino shall be at least 25% and the net margin shall increase to > 6%. The dividend policy shall be 30% of net income, provided that liquidity and financial strength permit this. For 2014, we forecast that net sales shall exceed SEK 290 million, representing growth of at least 28%. The net margin is expected to exceed 4% in Interim report January June 2014 Zinzino AB (publ), org.no

3 CEO'S COMMENTS It is with great pleasure that I can state that all markets enjoyed positive development during the first half-year and are displaying growth. Growth has become somewhat of a feature for Zinzino and is a major element in our long-term strategy. In total the first half-year shows growth of 49% in comparison with 2013, which makes me both humble and proud. Iceland is developing extremely rapidly and is our engine for growth at fully 322% in comparison with the first half-year of The market in Sweden is also developing very positively and my gut feeling tells us that Sweden will display rapid growth during the coming years. Zinzino USA is already contributing to total sales and during the second halfyear our focus will be on stimulating turnover via substantial market campaigns and major conferences for our partners. We are following developments closely and harbouring high hopes that the USA will position itself during 2015 as the second largest market within Zinzino, after Norway. Our Balance products continue to be a great success and are now our most important product line, accounting for 59% of net sales in the first half of An effect of the changed product mix is that we have achieved a considerably better gross profit through lower material costs. In the past two years we have seen a sharp decrease in material costs totalling 7% - from 35% down to 28%. Our organization has simultaneously improved in a large number of areas and is more optimized and efficient than ever. All in all, this has produced an improvement in the bottom line and a stronger financial base. This gives us the tools to invest in growth promoting measures such as new markets, new products and new IT systems. Sales will commence in both Holland and Poland in forthcoming quarters. They are both large markets where we perceive potential and we anticipate that they will become new growth markets within Zinzino. I am very proud and pleased that we are able to open up two new markets inside our operational budget, just as we have done with the USA. Moreover, we are managing to do this without losing focus on growth in our already existing markets. We have invested and used major resources in IT in recent years, which we will continue to do during 2014 and coming years. Satisfactory IT systems are a prerequisite in opening and driving new markets effectively without increasing costs in the organization. Investments which initially seem substantial can in return deliver economies of scale in the long term. Our product portfolio is changing, and we are continuing to focus on developing unique new products to strengthen the Zinzino brand, but also to further improve our margins. We have already launched a new product this year, BalanceOil Capsules, which we are expecting to contribute to increased sales and further growth. We are planning to launch several new products within our own brand during the next two years. We anticipate a total turnover for 2014 of between SEK 320 and 360 million in combination with an operating margin in excess of 4%. Having said that, this year we are also expecting to distribute some of the profits to our shareholders. - Dag Bergheim Pettersen, CEO, Zinzino AB SIGNIFICANT EVENTS DURING AND AFTER THE SECOND QUARTER OF 2014 Continued strong growth and earnings trend during Q2 All markets displayed growth during the second quarter with total revenues amounting to SEK 79.6 (53.4) million. Total growth amounts to 49% for the group as a whole compared to last year. Profit before tax amounts to SEK 3.6 (1.3) million, which is equivalent to a profit per share of SEK 0.13 (0.05). The percentage of sales spread across the product lines in the second quarter is 42% for Zinzino Coffee and 58% for Zinzino Food. Sales for Coffee amount to SEK 31.5 (31.7) million, corresponding to a drop in sales of 1%. Sales for Food amount to SEK 40.3 (15.6) million, corresponding to a growth of 158%. 3 Interim report January June 2014 Zinzino AB (publ), org.no

4 Growth and geographic sales per market during Q2: USA 4%n/a ICELAND 13% 314% NORWAY 27%28% FINLAND 15% 42% DENMARK 13%40% ESTONIA 11% 37% SWEDEN 10% 39% LITHUANIA 4% 48% Geographic distribution of sales during April-June 2014 Growth per country during April-June 2014 in comparison with the equivalent period last year LATVIA 3%32% During Q2, the Group has gained 14,154 (8,566) new customers. The sales force increased by 2,669 (1,845) distributors. BalanceOil Capsules new product within Zinzino Food A new product was launched within Zinzino Food during June: BalanceOil Capsules. BalanceOil Capsules are just what the name suggests - BalanceOil conveniently packaged in capsules. The product adjusts the fatty acid balance as effectively as Zinzino's other Balance products. Change in listing In an effort to attract institutional investors who are currently barred from trading on Aktietorget, as well as to better position ourselves in the market for American customers and vendors, Zinzino s board has decided to apply for a change in listing from Aktietorget to First North Nasdaq. Erik Penser Bankaktiebolag will act as the company s official advisor during this application process, and Setterwalls in Göteborg will represent the company as its legal council in this matter. Provided the company s application is accepted, we are planning for the change in listing to take effect in the Fall of Further expansion of the company During the second quarter Zinzino has commenced the process of setting up subsidiaries in Poland and Holland. As Zinzino has implemented several establishments in similar markets, it has gained a lot of expertise in this area. In combination with the fact that Zinzino can re-use a large number of technical solutions from previous establishments, this means that the processes are implemented effectively and according to plan. The beginning of preliminary sales is set for September Interim report January June 2014 Zinzino AB (publ), org.no

5 Other significant events A new dividend policy was applied for the first time at the annual general meeting on 16 May, 2014 where it was decided to distribute SEK 0.10 per share, a total of SEK 2.8 million to the shareholders. This is the first time in the company's history that profits have been distributed to the shareholders. Torben Lundberg was elected to Zinzino's board at the same meeting. Torben, who is a Danish citizen, has solid experience of strategic IT work, which will supply a further dimension to Zinzino's board and help position us in the highly system based business environment in which Zinzino operates. In connection with this Björn Flintberg was bid farewell after serving as a board member for Zinzino over a period of many years. THE GROUP'S EARNINGS AND FINANCIAL POSITION FOR THE FIRST HALF-YEAR 2014 Turnover Total revenues in the first half-year of 2014 were SEK (108.3) million, which represents a 43% growth over last year. Net sales amounted to SEK (97.2) million. Divided between the product lines, Coffee turns over SEK 57.5 (72.2) million and Food 82.5 (25.0). This shows that Zinzino Food continues to account for the growth in the group. All markets are displaying growth, which is very positive. The largest market is still Norway, while Iceland continues to show the strongest sales growth and has now grown to be Zinzino's third largest market. Costs and profit The products within Zinzino Food have better margins than Zinzino Coffee, which has enabled Zinzino to increase compensation to distributors, stimulating growth in sales and simultaneously increasing the gross profit margin from 24% to 27%. External operating expenses have increased, primarily due to the establishment in USA, but also for IT as Zinzino changed its payment service provider for all internet payments during the first months of the year. Despite this, the group is displaying an operating margin of 4%, compared with 1% at the same point last year. With the above improvements in margins, profit for the group's first six months amounts to SEK 6.5 (1.3) million before tax. Profit per share for the quarter amounts to SEK 0.24 (0.05). This demonstrates that the company has reached a critical foundation/base and can now increase its margins as sales expand. Stocks The first six months of the year have been characterized by positive cash flow from operating activities. This is partly due to the fact that capital tied up in stocks marginally decreased down to 30.3 (31.6), despite the increased turnover. The bulk of the inventory currently consists of Zinzino Food products which have an average stock turnover rate of one month. The previous excess stock of espresso machines, which tied up capital, is now at a normal level. External capital provided During June the group has provided external capital via a share option subscribed during SEK 3.6 million was provided during June, and in total, the company will be able to provide SEK 12.5 million during The increase in share capital and the amount of shares was registered at the Swedish Companies Registration Office in the beginning of July, Interim report January June 2014 Zinzino AB (publ), org.no

6 Further investments in Bioactive Foods In order to strengthen its influence in Bioactive Foods AS, Zinzino has increased its holding in the company from 6% to 10% through additional investment of SEK 2.4 million. Zinzino has an agreement with Bioactive Foods AS to issue shares so that it can further increase its share in the ownership in the company. Bioactive Foods AS and Zinzino have together developed strategically important products for Zinzino. Greater ownership in Bioactive Foods AS ensures access to products, skilled researchers and the production of goods within the framework of Zinzino Food. Over time, Zinzino expects the ownership in Bioactive Foods AS to generate lower buying costs, which will ensure better gross profit margins and in turn a stronger bottom line. Liquidity and Equity/assets ratio Cash amounts to SEK 26.4 (1.8) million as per the balance sheet date. The group's equity/assets ratio amounts to 39.1% (27.9). The Board of Directors and management feel very confident with the existing financial base in the group. INCOME STATEMENT ZINZINO GROUP AND ZINZINO AB (PUBL.) Group Zinzino AB Group Zinzino AB April-June April-June April-June April-June Net sales 71,842-47,322 - Other revenue 7,795-6,099 - Merchandise and other direct costs -58, ,535 - Gross profit 20,861-15,886 0 External operating expenses -10, , Personnel costs -7, ,237 - Depreciation/amortization Operating profit 3, , Net financial income/expense Profit/loss for the year 3, , Group Zinzino AB Group Zinzino AB Jan-June Jan-June Jan-June Jan-June Net sales 139,950-97,174 - Other revenue 15,216-10,921 - Merchandise and other direct costs -113, ,637 - Gross profit 41,697-26,458 0 External operating expenses -21, , Personnel costs -13, ,714 - Depreciation/amortization Operating profit 6, , Net financial income/expense Profit/loss for the year 6, , Interim report January June 2014 Zinzino AB (publ), org.no

7 BALANCE SHEET ZINZINO GROUP AND ZINZINO AB (PUBL.) Group Zinzino AB Group Zinzino AB Fixed assets Intangible assets 3,105-2,207 - Tangible assets 1, Financial assets 5,937 25,070 3,567 22,357 Total fixed assets 10,042 25,070 6,530 22,357 Current assets INVENTORIES 30,343-31,576 - Current receivables 9, , Cash and bank balances 26,350 3,768 1, Total current assets 66,492 4,020 44, Total assets 76,533 29,090 50,955 22,543 Restricted equity 5,962 6,322 2,709 2,708 Non-restricted equity 17,404 16,094 10,200 19,424 Profit/loss for the year 6, , Total equity 29,900 21,902 14,233 21,911 Long-term liabilities Current liabilities 46,355 6,911 36, Total liabilities 46,632 7,188 36, Total equity and liabilities 76,533 29,090 50,955 22,543 7 Interim report January June 2014 Zinzino AB (publ), org.no

8 CASH FLOW STATEMENT ZINZINO GROUP AND ZINZINO AB (PUBL.) Group Zinzino AB Jan-June Jan-June Jan-June Jan-June Operating activities Profit/loss before financial items 6,178 1, Depreciation / Write-offs ,710 1, Interest received Interest paid Income tax paid Cash flow from operating activities before change of working capital 6,709 1, Cash flow from changes in working capital Increase(-) / Decrease(+) of inventories -1,928-16, Increase(-) / Decrease(+) of current receivables , Increase(+) / Decrease(-) of current liabilities 12,706 2,155 6, Cash flow from operating activities 17,065-14,749 5, Investment activities Investments in intangible assets Investments in financial assets -2, , Investments in tangible assets Cash flow from investment activities -2, , Financing activities Shareholder contributions Group contributions Dividend -2, ,708 - Option issue 3, ,613 0 Cash flow from financing activities CASH FLOW FOR THE YEAR 15,428-14,790 3, Cash and cash equivalents at the start of the period Exchange rate difference in cash and cash equivalents Cash and cash equivalents at the end of the period 10,923 16, ,350 1,798 3, Change in cash and cash equivalents 15,428-14,790 3, Interim report January June 2014 Zinzino AB (publ), org.no

9 RESULTS AND FINANCIAL POSITION PARENT COMPANY Zinzino AB Zinzino AB (SEK THOUSAND) Jan-June Jan-June Total sales - - Profit before depreciation/ amortization Profit before depreciation/ amortization (%) Operating profit Operating margin (%) - - Profit per share, SEK Cash and cash equivalents per balance sheet date, 3, Equity/assets ratio (%) 75.29% 97.20% Equity per share, SEK DEFINITIONS KEY RATIOS Gross margin Total revenues minus cost for goods sold, partner commissions and outgoing freight as a percentage of the period's total revenue. Operating margin Operating profit after depreciation as a percentage of the period's total revenues. Profit per share The period's profit in relation to the period's average number of outstanding shares. Operating margin before depreciation Operating profit before depreciation as a percentage of the period's total revenue. Equity per share Equity in relation to the number of outstanding shares on the balance sheet date. Profit margin The period's profit as a percentage of the period's net sales. Equity/assets ratio Equity capital as a percentage of the balance sheet total. OTHER INFORMATION Zinzino does not provide a breakdown of minority interests in the interim report. The minority comprises approx. 7% of the shares in Zinzino Nordic AB and the owners of these shares have no influence in the group. No tax calculations are made based on the half-year results as it is difficult to calculate tax expenses in subsidiaries during the course of the year. In Sweden Zinzino has a total of approx. SEK 100 million in unutilized losses to carry forward. All in all, the assessment is that the total tax expense for the group for 2014 will be low. 9 Interim report January June 2014 Zinzino AB (publ), org.no

10 NUMBER OF OUTSTANDING SHARES The share capital as per is divided into 27,082,770 shares, of which 6,113,392 are 'A' shares (1 vote) and 20,969,378 'B' shares (0.1 vote). The share's quota value is SEK The company's 'B' shares are traded on AktieTorget, ACCOUNTING PRINCIPLES The accounting principles are unchanged from the previous financial year. AUDITING This interim report has not been reviewed by the company's auditors. NEXT REPORT The report for the 3rd quarter of 2014 will be issued on For more information, please call Dag Bergheim Pettersen, CEO Zinzino AB Gothenburg, 29 August 2014 Zinzino AB (publ.) The Board of Directors Zinzino AB Hulda Lindgrens gata Västra Frölunda Sweden info@zinzino.com Tel: +46 (0) Note: This report is published in Swedish and English. In the event of any difference between the English version and the Swedish original, the Swedish version shall prevail. 10 Interim report January June 2014 Zinzino AB (publ), org.no