LAMMHULTS OFFICE LAMMHULTS LIBRARY - Lammhults Design … · Mobi Abstracta. Design: Andrea Ruggiero. 4 LAMMHULTS DESIGN GROUP SEK 39 million higher and the proﬁt after ﬁnancial

2010

THIS ANNUAL REPORT IS ALSO AVAILABLE IN SWEDISH

C ONTENTS

1 THE PAST YEAR

2 A WORD FROM THE PRESIDENT

6 BACKGROUND AND ORGANISATION

8 STRATEGIC STRENGTHS AND GOALS

1 0 INTERNATIONALISATION

1 2 DESIGN AS AN INVESTMENT

14 THE SHARE

1 7 FIVE-YEAR REVIEW

18 DESIGNING THE FUTURE

34 LAMMHULTS OFFICE

38 LAMMHULTS LIBRARY

42 LAMMHULTS HOME

46 SCANDINAVIAN EYEWEAR

50 SUSTAINABILITY

53 CORPORATE GOVERNANCE REPORT

56 BOARD

58 GROUP MANAGEMENT

6 1 REPORT OF THE BOARD OF DIRECTORS

65 CONSOLIDATED INCOME STATEMENT, CONSOLIDATED

STATEMENT OF COMPREHENSIVE INCOME, CONSOLIDATED

STATEMENT OF FINANCIAL POSITION, STATEMENT OF

CHANGES IN THE GROUP’S EQUITY AND CONSOLIDATED

STATEMENT OF CASH FLOWS

69 PARENT COMPANY INCOME STATEMENT PARENT COMPANY

STATEMENT OF COMPREHENSIVE INCOME, PARENT COMPANY

BALANCE SHEET, STATEMENT OF CHANGES IN PARENT COMPANY’S

EQUITY AND PARENT COMPANY CASH FLOW STATEMENT

7 2 NOTES

104 AUDITOR’S REPORT

Lammhults Design Group creates positive experiences through modern interiors – for a global clientele. Consumer insight, innovation, design management and strong brands form the basis of our business. We develop products in partnership with several of the market’s leading designers. Lammhults Design Group is quoted on Nasdaq OMX Stockholm.

LAMMHULTS DESIGN GROUP IN BRIEF

LAMMHULTS OFFICE

BUSINESS AREA CONCEPT Lammhults Office develops and markets interiors products for public environments. The Lammhults brand offers visually strong, timeless furniture with a high design value, while the Abstracta and Borks brands contain products for visual communication and screening. CUSTOMERS: Lammhults Office works mainly via architects and interior designers at the prescriptive stage. Dealers form an important part of the sales process that finishes with end customers – usually companies and organisations.

SHARE OF THE GROUP'S BUSINESS:

PROFIT/LOSS FOR THE YEAR:

BRANDS:

Net sales

SEK 287.8 million (283.3)

Operating profit/loss


BIGGEST MARKETS:Sweden, Norway, Denmark, Germany and the UK.

37%

LAMMHULTS LIBRARY

BUSINESS AREA CONCEPT Lammhults Library develops and markets attractive, functional interiors for libraries, schools and other public meeting places, such as educational premises and arts centres. The business area works partly with project sales of complete interiors systems, and partly with aftermarket sales of furniture and consumables.

CUSTOMERS: Lammhults Library works closely with architects and interior designers who design and propose interiors for end customers. Lammhults Library's end custom-ers are mainly players whose operations are financed using public funds, e.g. municipalities or educational institutions.

PROFIT/LOSS FOR THE YEAR


BRANDS:

Net sales




BIGGEST MARKETS:Germany, France, Denmark, the UK and Belgium.

41%

SCANDINAVIAN EYEWEAR

BUSINESS AREA CONCEPT Scandinavian Eyewear develops and markets spectacle frames. The business comprises the company's own Skaga brand and licensing deals for developing collections for other brands.

CUSTOMERS: Scandinavian Eyewear's direct customers are independent opticians and optician chains. Its end customers are private individuals.

PROFIT/LOSS FOR THE YEAR:


BRANDS:

Net sales



SEK 3.7 million (-5.9)

BIGGEST MARKETS:Sweden, Finland, Denmark, Norway and the US.

13%

LAMMHULTS HOME

BUSINESS AREA CONCEPTLammhults Home develops and markets home interiors products. With its upholstered furniture and innovative storage solutions, Lammhults Home has one of the home interiors market’s strongest product ranges.

CUSTOMERS: The Home business area’s end customers are primarily private consumers, but its products are also used in public settings, e.g. hotels.

PROFIT/LOSS FOR THE YEAR


BRANDS:

Net sales



SEK -9.0 million (3.7)

BIGGEST MARKETS:Sweden, Germany, Norway, Finland and Denmark.

9%

1L AMMHULTS DES IGN GROUP

Net sales: SEK 778.0 m (840.8)

Operating profit: SEK 26.7 m (44.6)

Operating margin: 3.4% (5.3)

Return on capital employed: 4.7% (8.0)

Equity/assets ratio: 49.6% (52.4)

Debt/equity ratio: 0.56 (0.47)

Dividend payout ratio: 61% (47)

Average number of employees: 394 (410)

The past year: EXPORT MARKETS

65

35

22

48

30

%

%

%

%

%

SWEDEN

Where our revenues come from

PRIVATE CONSUMPTION

PUBL IC CONSUMPTION

CORPORATE CONSUMPTION

Distribution of revenues

Lammhults Library acquired

the library section of Harmonie

Projects Srl, Italy.

In Q1 2009 three major projects

were delivered in the Office

(SEK 10 million), Library (SEK

10 million) and Home (SEK 5

million) business areas, totalling

SEK 25 million. There were no

equivalent projects in Q1 2010.

The cost cutbacks resulted in

overheads in Q1 being around

SEK 9 million lower than in the

previous year.

Strong demand in Sweden and

Norway for Lammhults Office.

Lammhults Home received an

order for around SEK 2 million to

supply upholstered and storage

furniture to North Africa.

The cost cutbacks resulted in

overheads in Q2 being around

SEK 10 million lower than in the

previous year.

Orders increased by 18% for

Scandinavian Eyewear due to

strong growth in North America

and the Nordic region.

Order volumes for the other

business areas were low.

The operating margin was 9.8%

(10.4) in the quarter.

Lammhults Office acquired Borks

Patenttavler A/S, Denmark.

Within Lammhults Library some

projects were delayed, and an

action plan was adopted to

harmonise and refine product

ranges and streamline the

organisation. The action plan

resulted in non-recurring costs

of around SEK 10 million being

charged as an expense.

The financial instability in southern

Europe resulted in public-sector

savings, which had a negative

effect on library projects in

several countries.

Net sales

SEK 196.8 m (224.5)


SEK 4.5 m (14.1)

Net sales

SEK 187.9 m (188.4)


SEK 4.3 m (-8.5 )

Net sales

SEK 185.4 m (196.5)


SEK 18.1 m (20.5)

Net sales

SEK 207.9 m (231.4)


SEK -0.2 m (18.5)

Q1 Q2 Q3 Q4

2 L AMMHULTS DES IGN GROUP

GROWTH, INTERNATIONALISATION AND STREAMLINING CONTINUE TO BE KEYWORDS FOR THE GROUP

A WORD FROM THE PRESIDENT

Anders Rothstein, President and CEO

With the Group-wide growth strategy that we drafted in 2010 along with a strong financial position, we are ready for a focused and challenging journey of growth over the next three years.

The past year presented a number of challenges in the wake of the financial crisis. This was particularly true in the PIIGS countries (Portugal, Italy, Ireland, Greece and Spain), in which there are still projects to be won, but it takes significantly longer to close deals, and delays are more often the rule than the exception. Also, when comparing the different years, the strength- ening Swedish krona has a negative effect.

renowned “Good Design Award”, which has been awarded annually since the 1950s by The Chicago Athenaeum.

Our products have also attracted attention on the library side, and at the end of 2010, Lammhults Library was nominated for the German “Designpreis Deutschland 2011” award for its new furniture for children.

Sustainability – in terms of style and the environmentSustainability is a theme that is being devoted increasing attention in the Group’s product development proc-esses. We strive to create products that will last for a long time – and that means thinking beyond wear and tear. All too often, style and appearance trends have a significantly shorter life-span than the product itself, which is why we set great store by developing products with a modern, timeless

Thanks to our efforts in product development, new concepts and new brands, as well as in market penetration and market expansion, 2010 was also a year of opportunities.

During the year the Group expanded through two acquisitions: Italian Harmonie in the Lammhults Library business area and Danish Borks in the Lammhults Office business area. Also, the fact that several of the products launched within the Group won prestigious international awards and distinctions during the year gave our self-confidence a boost.

The Office business area scooped an award for its Mobi product concept. Mobi is an innovative mobile workstation that allows users to redefine and redesign their work areas based on their needs and the situation in question. It was presented with the “Best of the Year Award 2010” by Interior Design Magazine and also received the internationally


design idiom. Sustainability is much more than just the choice of materials, recycling, transport, and so on. All those things are important, but we are also trying to limit the environmental impact of our products through their design. Our products are designed to be the opposite of disposable products.

The Group’s purchasing procedures have been clearly streamlined in 2010, when we have been able to exploit syner-gies between the companies to a greater extent. This initiative was launched by establishing a new function with overall responsibility for the Group’s supply chain work. Following this, a number of Group-wide tenders were initiated. The

business areas for furniture and interiors. On the UK market, the Office and Library business areas have enjoyed sales successes despite a declining market. Scandinavian Eyewear has had a good year in the North American market and also managed to increase sales in Finland. Lammhults Home also gained some ground there during the autumn; Finland is a market with great potential for us to expand further.

2010 can be summarised as follows: Net sales ended up at SEK 778.0 million (840.8) and the profit after financial items was SEK 24.2 million (38.9). With the exchange rates from the previous year, net sales would have been around

majority of the cost-saving effects are expected to benefit the Group in 2011.

Business cycle and Group results The strong Swedish economy topped the European rankings in 2010 and made a major contribution to the success of the Lammhults Office business area in the project market. The beneficial effects have, however, not had an impact on private consumption, where demand for the premium segment continued to be weak – to the detriment of the Lammhults Home business area.

If we look at Europe, the dawning recovery in the German economy is giving off positive signals to our three

Anders Rothstein, President and CEO

The most important parts of the vision are about creating growth and profitability and securing the internationalisation of the Group – with leadership in design as our guide.

MobiAbstracta. Design: Andrea Ruggiero


SEK 39 million higher and the profit after financial items around SEK 8 million higher than reported for 2010. Delayed library projects and the adoption of an action plan for harmonising and refining the product range and streamlining the organisation led to a loss warning. The action plan resulted in non-recurring costs of around SEK 10 million being charged as an expense. We continue to enjoy a robust financial position, with an equity/assets ratio of 49.6% (52.4) and a debt/equity ratio of 0.56% (0.47), which lays good foundations for growth, both organic and via continued acquisitions.

New Group strategy with focus on growthDuring 2010 we developed and resolved a Group-wide growth strategy spanning the period 2011–2013. One of the funda-mental ideas of the work on Group strategy was to create a common image and language for the entire organisation,

Board and business partners.Let me explain and expand on some

of the central components of this strategy. We can start off with our mission, vision and business concept.

MissionScandinavia. Design. Passion. “Furniture and interiors for sustainable work and home environments – for life’s profes-sional and social relationships – that encourage and support people’s coop-eration and interaction.

People’s work and home lives are merging to an ever-increasing extent – in terms of both time and space. We are more likely to realise our life goals together with other people, and in new contexts. Needs, requirements and preferences for furniture and interiors are changing, affecting all industry players. Insights into new living patterns form the basis of our mission.

The word ‘Scandinavia’ links back to the Group’s origins and tradition of craftsmanship, and has also been chosen so that we can benefit from the reputation and recognition factor that arises when it is combined with ‘design’ – that is, a long-standing tradition of furniture manufacturing in which Lammhults Design Group has played a major role.

‘Design’ is a superior differentiating factor in Group strategy and is primarily active in the function, design and appearance of our products and solutions.

With ‘Passion’, we highlight how the Group wants to be perceived in encounters with and interaction between staff, customers and other partners: committed to the task of meeting, satisfying and exceeding customers’ needs and expectations.

VisionLeading corporate group in the field of design, with origins in Scandinavian furniture and interiors, recognised for its portfolio of prominent brands, with a distinctive, international and profitable market position based on an attractive and competitive offering for a global clientele, which creates growth with profitability in line with set goals.

Guided by the beacon of leadership in design, the vision is to create growth and profitability and to forge ahead with the Group’s internationalisation. The theme

ArcticVoice. Design: Rolf Fransson


Develop a decentralised organisation based on “One-Company Thinking” to exploit common strengths through Group cooperation – driven by entre-preneurship but with more of a common Group mindset, coordinated business strategies and greater business acumen.

Over the next few years, the Group will focus on continuing to implement our strategic themes and exploring them more deeply.

The journey has begun. A Group-wide growth strategy has been drawn up. Lammhults Design Group is well equipped for 2011 and the growth journey of the coming three years. All that remains is the daily work necessary for achieving our goal. To succeed we need to “Do the right things, every day – over and over again”.

Finally, I would like to thank all our employees for their hard work in 2010.

of growth is central to the vision. It specifically reoccurs in several of the categories of stakeholders, including business partners and shareholders.

Business conceptServing a global clientele, Lammhults Design Group's business concept is to create positive experiences through modern interiors. Consumer insight, innovation, design management and strong brands are the cornerstones of our operations. We develop products in partnership with several of the market's leading designers.

The Group’s operations are aimed at a global clientele – who we call ‘global cosmopolitans’ – which is why our offer-ing of modern interiors is able to reach a wider market. This ambition is in line with our attempts to successively increase our level of internationalisation.

We create positive experiences through the solutions, concepts and added value that form part of our offering – over and above the actual products’ functionality and quality. Our business concept also signals factors – consumer insight, innovation, design and brands – that set the Group’s offering apart from the rest. Another explicit component is that the Group’s companies are actively seeking collaborations with other players,

mainly designers.The other part of the work on strategy

made up of six strategic themes that the work is built around. These are based on factors in the surrounding world and critical factors for success that we have identified for the period 2011–2013, which are as follows:

International expansion – achieve an international market position by chiefly focusing on Europe and, through our own companies, partially focusing on the Middle East, North America and Asia.

Strategic positioning based on sustaina-bility – Group-wide sustainability mind-set and sustainability efforts throughout the supply chain.

Strategic market and business de-velopment – integrated solutions and concepts (value-based offering) with greater elements of international and global accessibility for more cross-border customer and user target markets (global cosmopolitans).

Greater opportunities to influence the end user – “from prescribed to described”.

Operational efficiency and productivity – primarily in Supply Chain Management and Design Management

The Group’s operations are aimed at a global clientele, which is why our offering of modern interiors is able to reach a wider market. This ambition is in line with our basic strategy of successively increasing our level of internationalisation.

Anders Rothstein

President and CEO


Say Lammhults and you will conjure up the image of classic furniture and design icons – regardless of where you are in the world. The company that Edvin Ståhl founded in 1945 under the name Lammhults Mekaniska Verkstad, subsequently Lammhults Möbel AB, has made a historic journey – from its roots in the wilds of the southern Swedish county of Småland and the area’s tradition of furniture manufacture to today’s international design group. Within Lammhults Design Group, the original company, Lammhults Möbel AB,is now only one of a number of strong brands active in different areas, but with one thing in common: design as a business concept and driving force.

Imprint, Cappelen Damm, OsloLammhults. Design: Johannes Foersom & Peter Hiort-Lorenzen


Lammhults Möbel AB began in earnest to make a name for itself as a design company in the 1960s. The focus on product development and collaboration with pioneering designers paved the way for the successful design management that now guides the work of the entire Group.

Lammhults Möbel AB gradually became part of Rörviksgruppen and subsequently of R-vik Industrigrupp, after it was hived off in 1997. In 1999 R-vik Industrigrupp acquired Expanda AB, which included Abstracta and Skaga, now Scandinavian Eyewear. In the same year, R-vik Industrigrupp changed its name to Expanda and concentrated the business solely on design. In 2008 the Group changed its name from Expanda to Lammhults Design Group to indicate its roots.

Lammhults Möbel AB

Borks Patenttavler A/S

Lammhults

Abstracta

Borks

Lammhults Biblioteksdesign AB

(former Eurobib AB)

Lammhults Biblioteksdesign A/S

(former BCI A/S)

Schulz Speyer Bibliothekstechnik AG

Eurobib Direct

BCI

Schulz Speyer

Lammhults Home AB

(former Voice AB)

Ire Möbel AB

Voice

Ire

Scandinavian Eyewear AB

Seven Srl

Skaga

Efva Attling

Oscar Magnuson

Pilgrim

Oscar Jacobson

Lexington

LAMMHULTS OFFICE LAMMHULTS LIBRARY LAMMHULTS HOME SCANDINAVIAN EYEWEAR

BUSINESS AREA

SUBSIDIARIES

BRANDS

BUSINESS AREA

SUBSIDIARIES

BRANDS

BUSINESS AREA

SUBSIDIARIES

BRANDS

BUSINESS AREA

SUBSIDIARIES

BRANDS

2000 Acquisition of Eurobib (now Lammhults Biblioteksdesign AB), Sweden

2001 Acquisition of Voice (now Lammhults Home), Sweden

2002 Acquisition of BCI (now Lammhults Biblioteksdesign A/S), Denmark

2006 Acquisition of Schulz Speyer Bibliothekstechnik, Germany

2008 Acquisition of Seven, Italy

2008 Acquisition of IFDB Bibliotheks-Design, Germany

2008 Acquisition of IRE Möbel, Sweden

2009 Acquisition of NBLC Systemen, Netherlands

2009 Acquisition of Schulz Benelux, Belgium

2010 Acquisition of Harmonie Projects, Italy

2010 Acquisition of Borks Patenttavler, Denmark

IMPORTANT ACQUISITIONS – A SELECTION:

A Swedish design classic takes shape


We work with a brand-led strategy. Our own brands — Lammhults, Abstracta, Borks, Voice, Ire, BCI, Eurobib Direct and Schulz Speyer — are strong and well established, retaining their individual characteristics while benefiting from an endorsement process that denotes them 'Part of Lammhults Design Group'. This set-up gives us opportunities to work with our brands, both individually and in a collection-inspired manner – all to be able to meet the needs of each individual customer. It also means that we can exploit synergies in purchasing, production, product development and marketing.

Lammhults Design Group has roots in Sweden but is an international group. Around 65% of our revenues come from other markets. Our prod-ucts are available all over the world, from San Francisco in the west to Japan in the east. We are world leaders in the library market and can also see good potential for expanding internationally in other business areas.

Like all other businesses, the Group is affected by fluctuations in the econ-omy. But as our businesses are in different phases of the business cycle, we can usually cope with such fluctuations. The Scandinavian Eyewear and Lammhults Home business areas are affected at an early stage by cyclical movements. Lammhults Office experiences these effects later on, while Lammhults Library follows a different business cycle logic in many ways. The projects carried out by the latter business area are often financed using public funds. With help of stimulation packages, these funds have tend- ed to increase in slump periods. In 2010, however, the deficit in public financ-es in several European countries meant that savings were made instead.

We want to grow. For this reason, in order to be able to make the acquisi-tions we want to make at the right time, it is important to maintain robust finances. Our finances are naturally always governed by customers contin-uing to demand our products. We also make great efforts to constantly streamline our work, identify Group-wide synergies and increase the pro-portion of components purchased from low-cost countries. Constant cost control is a key component of maintaining profitability, even in periods of economic decline. We also strive to increase flexibility by, for example, letting sub-contractors take responsibility for parts of the finishing work.

STRONG BRANDS

Our strategic strengths

EXPORT POTENTIAL

R ISK SPREAD

ROBUST FINANCES

On 21 January, Schulz Speyer Bibliothekstechnik AG acquired the library section of Harmonie Projects Srl, a dealer for Schulz Speyer in Italy.

In June, Lammhults Biblioteksdesign A/S received several orders from the Middle East totalling around SEK 13 million. These projects include an order from the National Library of Kuwait and one from Georgetown University in Qatar.

Lammhults Home received an order for around SEK 2 million for supplying upholstered and storage furniture to North Africa.

On 19 November, Lammhults Möbel AB acquired 100% of the shares in Borks Patenttavler A/S, Denmark’s leading supplier of writing boards.

During the year, Scandinavian Eyewear launched the Pilgrim, Oscar Jacobson and Lexington brands on a broad front and signed a new licensing agreement with Face Stockholm.

Delayed projects within Lammhults Library and the adoption of an action plan to harmonise and refine product ranges and streamline the organisation resulted in a loss warning. The action plan led to non-recurring costs of around SEK 10 million in the Library and Home business areas being charged as an expense.

Goals and goal ful-

filment

Financial turbulence in southern Europe, the stronger Swedish

krona and non-recurring costs meant that growth and profitability

deteriorated during the year. High-priority value-adding activities

for 2011 include a focused export initiative, product and concept

development, purchasing and production streamlining, and

maximising synergies. The Group’s financial position continues to

be strong, with an equity/assets ratio of 49.6% (52.4) and a debt/

equity ratio of 0.56% (0.47) as per 31 December 2010. Our financial

position therefore continues to allow scope for acquisitions

without departing from the Group’s goals for equity/assets ratio

and debt/equity ratio.

– Growth shall be at least 15 % per year - 7 %

– Operating margin shall be at 3.4%

least 10 % per year

– Return on capital employed 4.7%

shall be at least 20 %

– Equity/assets ratio shall be at least 35 % 49.6 %

– Debt/equity ratio shall be 0.56 in the range of 0.7–1.0

– Dividend payout ratio of approximately 61%

40% of profit after tax, taking into account

the Group’s long-term capital requirements

The financial goals of Lammhults Design Group over a business cycle are:


Significant events in

2010


In Lammhults Design Group’s strategy for 2011–2013, international expansion is a central theme. By declaring this intention, the Group is taking a significant initiative for growth in markets outside its core market, Scandinavia.


International expansion

In order to grow further internationally, we are working on export-focused activities, carrying out marketing and sales-related campaigns, and making sure we bolster our organisation. Furthermore, we are expanding our collaborations with partners and developing our distribution and marketing channels on the geographical markets that the Group prioritises.

This international expansion initiative has resulted in a number of action plans. The following are examples of measures we have already taken, as well as those we are prepared to realise shortly.

We are placing the focus on internal and external human resources in order to increase sales on export markets. One strategic decision has been to start by reinforcing our presence in Germany. In that country, we have employed new staff, and the Area Manager responsible for the German market has been relocated there. We will gradually be relocating all Area Managers to the markets they work on.

Collaboration with the market’s foremost designers continues to form an important part of our strategy, and the aim is to increase the number of international designers we work with. This work has already begun, and we currently collaborate with designers from Scandinavia as well as from countries such as Germany, the Netherlands and the US.

L AMMHULTS OFFICE

In the Library business area we have chosen to focus geographically on certain selected markets, for example the UK. We have set up our own UK sales office, which opened in 2009, and are already reaping the benefits of our presence there.

Cultivating new and emerging markets that enjoy natural growth forms a key part of our action plan for how Lammhults Library will continue to grow outside Sweden. One example is the Middle East, to which we have already delivered a number of successful orders in recent years.

L AMMHULTS LIBRARY

In this business area, we are working to achieve broader distribution in our neighbouring Nordic countries. Our own sales representatives are targeting the markets in Denmark and Norway instead of agents, the aim being to increase our presence on these markets and take a more long-term approach to our work there. This is an important step in terms of reaching people with our products in an area marked by stiffening competition.

Apart from the Nordic region, our export campaigns are being directed at the markets in which our range is expected to have the greatest sales potential, such as Germany, the Netherlands and the UK.

L AMMHULTS HOME

North America has been an important building block for Scandinavian Eyewear in its recent efforts to expand internationally. We are already seeing very positive results, and our efforts will continue through the sales manager for North America moving to the US to increase our presence there and forge closer contacts with agents.

We have begun cooperating with several chains and have appointed both our own staff and agents to assist in increasing sales to Central and Eastern Europe.

SCANDINAVIAN E YEWE AR

Istanbul Airport. Turkey

City Library. Manchester, UK


Library Plattan, StockholmBCI

Design as an investment


As early as 30 years ago, the CEO at that time, Kenneth Ståhl, gave the business press an insight into how Lammhults was able to stand strong when the economy was otherwise in decline. “Design makes savings” was what he said then, and this perspective is still central to Lammhults Design Group. We know that investments in design create competitive advantages and give returns throughout the business cycle – then as now.

T H REE Y E A RS O F G R OW T H , S TA R TIN G FR O M 201 1 .

In 2010 the Group laid the foundations for an ambitious plan for increased growth. Our Group-wide strategy for the coming three years gives us great scope for positioning ourselves internationally and increasing exports. The strategy provides us with the tools we need to grow together and spread Scandi- navian design to homes and public settings all over the world.

The company that is now Lammhults Möbel AB, which Lammhults Design Group originated from, was established as early as 1945 under the name Lammhults Mekaniska Verkstads AB. Over the years, production know-how has been refined, the offering has expanded and a group with several subsidiaries has emerged. However, insight into the commercial value of modern design remains, and is what links the Group together.

SUS TA IN A B L E VA LU E S

For us, design is a word charged with values. Design, and particularly Scandinavian design, is an export item that is on the rise. It is a crucial part of our offering and one of the strengths through which we create business benefit. Our brand- and customer-centric work methods go side by side with our focus on design, and we are streamlining operations in the Group in order to achieve synergy effects throughout the entire chain, from purchasing to sales. Our businesses are located both early and late in the business cycle, ensuring stability. These are factors that make Lammhults Design Group a long-term investment with the potential for promising returns.

AerisLammhults. Design: Johannes Foersom & Peter Hiort-Lorenzen. Launched at Stockholm Furniture Fair in February 2011.


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SIX GeneralindexLammhults Design Group B

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SIX GeneralindexLammhults Design Group B

Price trends and share sales, 2010

Lammhults Design Group’s 14th year on the stock exchange

Lammhults Design Group's Class B share has been quoted on Nasdaq OMX Nordic Exchange, Nordic Small Cap, since 2 Oc- tober 2006. During the period 2 October 2006 to 16 June 2008, the share was quoted under the previous company name, Expanda AB, but as of 17 June 2008 it has been quoted under Lammhults Design Group, shortened to LAMM B. During the period of 25 June 1997 to 1 October 2006, the share was quoted on the O List of the Stockholm Stock Exchange, under the previous company name R-vik Industri-grupp AB until 6 June 1999 and thereafter under Expanda AB. At year-end 2010, Lammhults Design Group's share capital amounted to SEK 84,481,040, repre-sented by 1,103,798 Class A shares, each carrying an entitlement to 10 votes, and 7,344,306 Class B shares, each carrying an entitlement to 1 vote.

Share price

During 2010, the share price fell by 26% from SEK 49.30 to SEK 36.30.

B shares, which means that they own 104,254 Class A shares and 59,600 Class B shares.

Dividend policy and dividend

Lammhults Design Group's financial objective over a business cycle is, while maintaining a focus on the Group's long-term capital requirements, that the dividend paid shall correspond to around 40% of profit after tax.

For the 2010 financial year, the Board proposes to the AGM a dividend of SEK 1.00 per share (1.50). The total dividend payment will thus amount to SEK 8.4 million (12.7). The proposed dividend represents a direct yield of 2.8% (3.0).

Analyses of Lammhults Design Group

During the year, analyses of Lammhults Design Group were carried out by Swedbank Markets (Peter Naslund, tel. +46 (0)8-585 918 23).

The highest price paid during the year was SEK 56.00 (51.50) and the lowest was SEK 34.90 (30.20). Regarding the liquidity of the share in 2010, it was traded on 97% (92) of all trading days, and during the year, the total turnover in the company's shares was SEK 61 million (79). Market capitalisation at year-end was SEK 307 million (416).

Changes in ownership

The number of shareholders at the turn of the year 2010/2011 was 2,791 (3,082), an decrease of 9% compared to the preceding year. A shift in ownership from private individuals to institutional owners took place during the year.

Among the major owners, Skandia Livförsäkrings AB increased its owner-ship during the year by 11,580 Class B shares to 814,343 Class B shares, Odin Fonder increased its ownership by 7,794 Class B shares to 768,044 Class B shares, and Länsförsäkringar Småbolags- fond increased its ownership from 5,367 Class B shares to 548,134 Class B shares. Tage Johansson and his company reduced their ownership by 5,000 Class

Price trends and share sales, 2010 Price trends and share sales, 2006–2010


SHARE DATA 2006 2007 2008 2009 2010Number of shares at year-end, ’000s 8 448 8 448 8 448 8 448 8 448 Warrants, ’000s 1) 0 0 75 110 35Average number of shares, ’000s 8 448 8 448 8 448 8 448 8 448

Earnings per share before dilution, SEK 6.37 4.98 6.24 3.22 1.65Earnings per share after dilution, SEK 6.37 4.98 6.24 3.22 1.65Cash flow per share, SEK 8.39 5.94 11.05 3.95 3.53Equity per share before dilution, SEK 38.16 40.80 46.81 46.76 43.72Equity per share after dilution, SEK 38.16 40.80 46.81 46.76 43.72

Market price at year-end, SEK 96.00 65.25 41.00 49.30 36.30Paid/proposed dividend per share, SEK 2) 3.00 3.00 2.50 1.50 1.00P/E ratio 15 13 7 15 22 Market price/equity, % 252 160 88 105 83Dividend yield, % 3.1 4.6 6.1 3.0 2.8Dividend payout ratio, % 47 60 40 47 61

1) Redemption price of SEK 79.00 for warrants issued in 2008, and redemption price of SEK 50.00 for warrants issued in 2009. See note 6 for more information.2) Regular dividend of SEK 2.50/share and extra dividend of SEK 0.50/share in 2007. Regular dividend of SEK 2.25/share and extra dividend of SEK 0.75/share in 2006.

Number of Number of Share of Share ofSHARE CLASSES shares votes share cap. (%) votes (%)Class A shares 1 103 798 11 037 980 13.1 60.0Class B shares 7 344 306 7 344 306 86.9 40.0 8 448 104 18 382 286 100.0 100.0

GROWTH IN SHARE CAPITAL Change in TotalYear Transaction the share capital share capital1997 Incorporation 500 000 500 0001997 New share issue 80 223 330 80 723 3301997 New share issue 2 457 710 83 181 0401999 120 000 warrants for subscription of Class B shares were issued 2001 New share issue 1 300 000 84 481 0402008 75 000 warrants for subscription of Class B shares were issued 2009 35 000 warrants for subscription of Class B shares were issued


DISTRIBUTION OF SHARES, 31 DECEMBER 2010 Number of Share of Share in % Share in % shareholders owners in % of capital of votes1–500 2 014 72.2 4.6 2.1501–1 000 386 13.8 4.0 1.9 1 001–2 000 170 6.1 3.3 1.6 2001–5 000 110 3.9 4.6 3.2 5 001–10 000 46 1.6 4.1 2.3 10 001–50 000 42 1.5 10.3 7.1 50 001– 23 0.8 68.8 81.9Total 2 791 100.0 100.0 100.0

THE TEN BIGGEST SHAREHOLDERS, 31 December 2010 Number of Number of Share in % Share in %Shareholders Class A shares Class B shares of capital of votesScapa Capital AB 367 570 1 074 000 17.1 25.8Canola AB 288 049 112 000 4.7 16.3Sjöberg, Stig and Ann-Louise 107 600 80 500 2.2 6.3Johansson, Tage with company 104 254 59 600 1.9 6.0Skandia Livförsäkrings AB 0 814 343 9.6 4.4Sandelius, Nils-Gunnar with company 78 600 8 000 1.0 4.3Odin Förvaltning 0 768 044 9.1 4.2Länsförsäkringar Småbolagsfond 0 548 134 6.5 3.0Sjöberg, Johan with company 50 300 20 000 0.8 2.8Sjöberg, Harriet 37 600 38 050 0.9 2.3Total, 10 biggest shareholders 1 033 973 3 522 671 53.9 75.4Other 69 825 3 821 635 46.1 24.6Total 1 103 798 7 344 306 100.0 100.0

SHAREHOLDERS BY CATEGORY, 31 December 2010 Number of Number of Share in % Share in %Shareholders Class A shares Class B shares of capital of votesFinancial companies 0 2 241 984 26.5 12.2Social insurance funds 0 16 470 0.2 0.1Single-interest organisations 0 16 135 0.2 0.1Other Swedish legal entities 820 206 1 908 156 32.3 55.0Uncategorised legal entities 0 793 821 9.4 4.3Owners resident abroad 0 198 120 2.3 1.1Swedish natural persons 283 592 2 169 620 29.0 27.2Total 1 103 798 7 344 306 100.0 100.0

The total number of shareholders in Lammhults Design Group at year-end was 2,791 (3,082). Non-Swedish shareholders represented 2.3% (3.7) of the capital

and 1.1% (1.7) of the voting rights. Institutional shareholders, including legal entities based abroad and not categorised, represented 37.8% (35.9) of the capital

and 17.4% (16.5) of the voting rights. The ten largest shareholders held 53.9% (53.7) of the capital, representing 75.4% (75.3) of the voting rights.


Five-year review

KEY FIGURES Unit 2006 2007 2008 2009 2010Net sales SEK m. 815.9 829.2 901.2 840,8 778.0Gross profit SEK m. 332.8 329.7 368.5 337.4 303.6Gross margin % 40.8 39.8 40.9 40.1 39.0Operating profit SEK m. 84.8 73.3 85.5 44.6 26.7Operating margin % 10.4 8.8 9.5 5.3 3.4Profit after financial items SEK m. 78.2 63.1 77.1 38.9 24.2Net margin % 9.6 7.6 8.6 4.6 3.1

Total capital SEK m. 621.3 662.0 790.5 754.6 744.1Capital employed SEK m. 462.6 483.0 577.9 581.5 578.0Operating capital SEK m. 426.2 438.6 505.2 511.3 504.6Equity SEK m. 322.4 344.7 395.5 395.1 369.3

Return on total capital % 14.5 11.1 12.1 6.0 3.7Return on capital employed % 19.0 15.0 16.6 8.0 4.7Return on operating capital % 20.0 16.9 18.1 8.8 5.2Return on equity SEK m. 17.9 12.6 14.2 6.9 3.6

Debt/equity ratio multiple 0.43 0.40 0.46 0.47 0.56Risk-bearing capital, share % 53.2 53.2 50.5 53.3 51.2Interest coverage ratio multiple 10.7 8.9 8.0 6.0 8.5Equity/assets ratio % 51.9 52.1 50.0 52.4 49.6

Cash flows from operating activities SEK m. 70.9 50.2 93.3 33.4 29.8Investments SEK m. 17.3 12.5 27.6 17.3 7.6Average number of employees 371 363 400 410 394

Risk-bearing capital, shareEquity and deferred tax as a percent-

age of total assets.

Return on equityProfit/loss for the year as a percent-

age of average equity.

Return on operating capitalProfit/loss as a percentage of average

operating capital.

Return on capital employedResult after financial items plus finan-

cial costs as a percentage of average

capital employed.

Return on total capitalResult after financial items plus finan-

cial costs as a percentage of average

total capital.

Total assetsThe value of all assets.

Gross marginGross profit/loss as a percentage of

net sales.

Market price/equityMarket price at year-end divided by

equity per share.

Market price at year-endThe latest price paid at Nasdaq OMX

Nordic Exchange for the respective

year.

Dividend yieldDividend per share as a percentage of

the market price at year-end.

EquityRestricted and non-restricted equity.

Equity per shareEquity divided by the number of

shares at year-end.

Cash flow per shareCash flow from current operations

divided by the average number of

shares.

Inventory turnoverCost of goods sold divided by average

inventory.

Net marginProfit after financial items as a per-

centage of net sales.

Net salesValue of the Group’s deliveries, not

including deliveries made between

Group companies.

Net sales per employeeNet sales divided by the average

number of employees.

Operating capitalTotal assets less liquid funds and

other interest-bearing assets, less

non-interest-bearing liabilities.

P/E ratioMarket price at year-end divided by

earnings per share after tax.

Earnings per share after taxProfit for the year divided by average

number of shares.

Interest coverage ratioProfit after financial items plus finan-

cial expenses, divided by financial

expenses.

Operating marginOperating profit/loss as a percentage

of net sales.

Debt/equity ratioInterest-bearing liabilities divided by

equity.

Equity/assets ratioEquity as a percentage of total assets.

Capital employedTotal assets less non-interest-bearing

liabilities and deferred tax.

Dividend payout ratioProposed dividend as a percentage of

profit/loss for the year.


Designing thefuture


Designing thefutureDESIGNING THE FUTURE

What will the classic furniture of tomorrow look like? Which business models are waiting around the corner? Just like sustainable business, sustainable design is a question of try-ing to understand the future. If you have a sound perception of how the world will look, you can also influence development.

TELLING THE STORY OF TODAY AND TOMORROW

In each of Lammhults Design Group’s four business areas, projects are under way that have a bearing on the future. For this annual report, together with those responsible at the various companies, we have selected exciting initiatives that affect us just as strongly today as they will in the future.

FOUR IMAGES OF THE FUTURE

As a designer and business developer, you need to constantly relate to the future. This is both a challenge and a source of inspiration. Meet four personalities from Lammhults Design Group and read their predictions.


New campaigns are constantly being initiated, developed and implemented within the Group. These may concern brand strategy, product development, new markets, environmental work or other improvements. Keeping the focus on the future, we will highlight four projects that have been in progress during the year. Some of them extend several years back in time, while others have recently been launched. They will all play a part in shaping Lammhults Design Group in the near future.

LAMMHULTS OFFICE: Refining its brands

LAMMHULTS LIBRARY: Expansion in the Middle East and the UK

LAMMHULTS HOME: Structured environmental initiative

SCANDINAVIAN EYEWEAR: Digging out the latest trends from its own archives

CONTEMPORARY PROJECTS SHAPE THE FUTURE


Two brands, same clear message

Ahead of Lammhults’ global campaign, which was

launched at Stockholm Furniture Fair 2011, the

company had clearly defined what it stands for and

how it will evolve in the future. The company’s his-

tory of ground-breaking design collaborations and

links to modernism have shaped the Lammhults

Modern Essentials design philosophy. Driven by the

same aspiration, our sibling brand, Abstracta, has

formulated the concept of Great Workspaces.


“Lammhults stands for clear functionality and timeless beauty,” says Åke Jansson, CEO of Lammhults Möbel AB, about the company’s design pledge. Lammhults Modern Essentials will be launched in 2011 and is directly linked to the company’s history. It is possible to trace a common thread from 1955 and founder Edvin Ståhl’s early products right up to today’s innovations.

In the 1960s the company started collaborating with Börge Lindau & Bo Lindekrantz, two of Sweden’s first modern furniture designers. Taking modernism as their starting point, Lindau & Lindekrantz created new, innovative designs – not least by exploiting Lammhults solid know-how in steel manu-facture to the full. For 20 years the company thrived, along with the duo’s vigorous designs, which gave new expression to 1930s modernism.

At the end of the 1980s, the company entered a new phase and invited a number of promising recent graduates to a workshop. The participants were given access to Lammhults’ factory for one year, and this project resulted among other things in the company’s collaboration with Gunilla Allard, which has generated several new classics.

With design as a competitive advantage, Lammhults in-creased its sales tenfold during a period in which the Swedish economy was stagnating. The passion for modern design and long-term collaborations with designers has boosted the brand over the years, and the management has now concep-

tualised and put into words its successful design philosophy: Lammhults Modern Essentials.

It is based on the principles of modernism: clear design, honesty towards materials, and social commitment to industrial production. “This has been Lammhults’ approach from its origins until the present day,” says marketing manager Thomas Samuelsson.

Abstracta creates better workplacesWhen Lammhults was jointed by Abstracta in 2008, it was important that the two brands should find their own distinctive character and complement each other. Where Lammhults is building on its design heritage, Abstract has forged its own path in a whole area: the workplace.

Life at work has changed in recent years, with new ways of working, new places to work in and new forms of meetings. The work climate is more dynamic, with communication and a balance between formal and informal being key factors. With its insight into the modern workplace and knowledge of design, technology and acoustics, Abstracta found its place, which can be summed up in the concept of Great Workspaces.

This concept was launched at the Orgatec trade fair in Cologne at the end of 2010. In 2011 it will be developed further and be given a higher profile. “With Abstracta, all workplaces can go from being good to being great,” says Samuelsson.

We’re not interested in trends. For us it’s all about modernism and the basic strength that can be found in modern design


WE WILL ALWAYS BE MODERN, OUR DESIGN ALWAYS ESSENTIAL.


Planning, designing and equipping a library makes just as great demands on knowledge of the various functions of the library as on knowledge of architecture and design. This combination of skills has taken Lammhults Library from the Nordic region out into the world at large. In 2010 the business area has continued to reinforce its role in the Middle East and the British Isles.

Long-term library development in the Middle East“The whole thing started in the mid-1970s with a request from UNESCO in Paris to create the interiors of a number of school libraries in the United Arab Emirates,” recounts Kjell Granelli, sales manager at BCI, about setting up the company in the Middle East. In the decades that followed, countries in the GCC (Gulf Cooperation Council) invested large sums of money in basic infrastructure, not least for education and information. BCI has been involved as a key partner and has created interiors for hundreds of libraries in the region to date.

The guiding factor – indeed the decisive one for many contracts – has been a long-term approach. “We have built up relationships with local libraries, authorities and our own resell-ers to enable us to be a reliable partner. Those we work with can rest assured that we will still be in the picture in the future to deal with warranty undertakings, additions and continued develop-ment – they gain direct access to our know-how,” says Granelli.

“In 2010 we created the interior of Kuwait’s new national library, and next year we’ll be a part of Qatar University’s new central library project,” he continues. “These are two really prestigious projects that represent sales in the order of SEK 5–7 million apiece.” BCI has acquired leading-edge competence in producing interiors for educational environments and is behind several hundred school libraries, chiefly in Kuwait and the emirate of Abu Dhabi. The company has also supplied interiors for public libraries in the emirate of Dubai when new city districts have been built.

Growth in GCC countries continues to be strong, and there are plans for new investments in the education sector. One trend that is showing sales potential is that of internationally

renowned universities starting affiliate campuses in the region. “In 2010 we supplied interiors for Georgetown University’s facility in Doha, founded in cooperation with financial heavyweight the Qatar Foundation. The future for our competence in the Middle East looks extremely bright,” says Granelli.

Successful establishment in the UKIn Manchester, major investments are being made in libraries, with Lammhults Library being a partner in no less than four projects. The biggest is the relocation and renovation of the city’s central library, and the three other libraries – Longsight Library, Beswick Library and Brooklands Library – are all main-taining a high profile. Expansion on the UK market is the result of conscious efforts.

In a market with an abundance of suppliers and a constant price war being waged, BCI chose to focus on quality and competence. By highlighting its design know-how, it created a new niche for itself.

“With the experience we had from the British library sector, we identified a gap in the market and developed our business model so that we would be seen as more than just a supplier. We can offer both top-notch design skills and high-quality interiors. With carefully designed presentation material, we really managed to break into the market,” says Mikael Kjeldsen, business area manager at Lammhults Library.

Apart from the project in Manchester, the UK campaign has led to a framework agreement with ESPO, Nottingham, Devon and Leeds. Lammhults Library also has an agreement with Edinburgh City Council Library Design Framework, making it the sole supplier of library interiors over the coming four years.

Today, Lammhults Library occupies a stable position in Scotland and northern England, but in the next few years it will be expanding its presence in the southern parts of England, mainly in the area around London. “That’s where we see the biggest growth potential. As the UK market as a whole is being squeezed, we see our chance to take market share and expand existing business,” says Kjeldsen.

Scandinavian library design goes global


Centro de Arte. Alcobendas, SpanienBCI


The issue of environmental impact is here to stay. Awareness among the population at large is increasing all the time, and in the consumer sector, more and more people are making active ethical and eco-friendly choices. However, it has not been easy for this trend to gain a foothold in the furniture industry. But Ire is now taking the lead to increase the pace of change and get more people interested in making choices with a low environ-mental impact.

On the contract side, the furniture industry has seen explicit demands for quite some time, particularly in public sector tenders. On the other hand, consumers have been more hesitant. This is largely because selecting a more eco-friendly option costs a little more.

When consumer interest in eco-labelled furniture has been low, many suppliers have also been reluctant to take the plunge. Ire has now decided to take action to redress the balance between supply and demand.

“If we are bold enough to expand the range of more eco- friendly alternatives, demand from customers will also increase. Sometimes, as a supplier, we need to be one step ahead of the market,” says Ola Söderpalm, new business area manager for Lammhults Home in 2011.

Limiting environmental impact as far as possible has long been a key issue for Ire. Since the furniture manufacturing company was founded in 1939, it has consistently sourced its material locally. Most of the raw materials are purchased from suppliers in the areas surrounding the Swedish counties of Västra Götaland and Småland. Also, all products are manu-factured in Sweden.

ISO 14001 – seal of eco-friendly qualityWith two strategic projects, Ire has moved its commitment to the environment up a notch in 2010. In November the company became certified to ISO 14001, confirming that it works system- atically on reducing its environmental impact.

Svanen-labelled sofa launch imminentAlong with designer Emma Olbers, Ire has produced a new sofa model compliant with Svanen, the Nordic region’s official eco-labelling system that is world-leading with its stringent requirements. The sofa is expected to officially receive its eco-label in 2011. A furniture manufacturer can hardly demonstrate more clearly that it offers an alternative to all those wishing to buy locally and not burden the environment unnecessarily.

Ire is leading the way towards more ecofriendly furniture


Ire is leading the way towards more ecofriendly furniture

Our furniture is manufactured to high envi-ronmental and craftsmanship standards in Tibro in the Swedish county of Västergötland. The raw materials for furniture construction are purchased locally and the fabrics come from Europe’s leading weaving mills. It is important for us to manufacture close to our main markets. In this way, we can avoid environmentally unsound transport as far as possible. We work wholeheartedly to run our business in an ethically responsible manner with as little environmental impact as possible.IRE MÖBEL AB

Join/RejoinIre Design: Emma Olbers


Skaga Originals is a concept that has managed to exploit a rich design heritage while renewing the brand and generating greater interest among consumers.

The concept was launched to coincide with Scandinavian Eyewear’s 60th anniversary in 2008. Six frames typical of their era were selected from Skaga’s extensive design archive and launched anew as Skaga Originals. “Looking back, we can see that we were slightly ahead of our time – the retro trend was still in its infancy,” says Anneli Isacsson, marketing manager at Scandinavian Eyewear.

The next step was taken two years later after a discovery in the company’s cellar: sketches from the 1960s signed by design icon Sigvard Bernadotte. The idea of Skaga Originals by Sigvard Bernadotte was born, and soon the Max, Siri and Ariel frames were launched. The design was entirely in line with current trends, and the launch attracted a great deal of interest.

“In all communication, we focused consistently on Sigvard Bernadotte as a designer, not as a member of the Swedish royal family. But we can’t deny that the timing was auspicious and that the royal fever arising from the wedding of the Swedish Crown Princess generated even greater interest,” says Isacsson.

Scandinavian Eyewear has continued to dig through its design archive ahead of 2011. The latest collection from Skaga

Originals sports the addition “by Sighsten Herrgård”. With his boldness and stylistic confidence, Sighsten Herrgård was one of Sweden’s most famous designers and trendsetters of the 1970s and 1980s. The frames – Castor, Capricorn and Leo – that he designed for Skaga have a design idiom that appeals to a fashion-conscience target market.

Herrgård was one of the first celebrities in Sweden to announce that he had AIDS, and in 1989 he died from an AIDS-related illness. Together with his family, Scandinavian Eyewear has decided to donate 20% of the sales revenues from the collection to AIDS research.

After three collections, Skaga Originals has gained a foothold on the market. The concept has helped to strengthen and partially alter the image of the Skaga brand – an authentic and exciting eyewear brand.

“Skaga has long been known for its classic frames. We want- ed to maintain this image while adding curiosity and expectation to the brand,” says Isacsson about the campaign, which is also an initial stage in building the brand in relation to consumers.

Skaga Originals by Sigvard Bernadotte was a great success, and Sighsten Herrgård’s collection has already been well received. Skaga Originals has great potential for continued growth. Exploration of the design archive has only just begun.

Through tradition and trends, Skaga Originals is building its brand


CastorSkaga. Design: Sighsten Herrgård


Where do you get your inspiration for the future from?When I travel, in the forest and in the bath tub. I draw inspiration from all aspects of life.

What will a designer need to be able to do in 20 years’ time?I believe that design will continue to be an artistic profession. Designers will still need to have ideas with potential and be able to draw them with a pencil – even in the future. This approach will prevail.

What, in the opinion of future customers, will be good design?Furniture design has always been an expression of what people think and do in the period they are living in. If you have ideas and can give responses to cultural challenges, translate these thoughts into creations, from drawing and development to manufacture and customer relations, then you have a good chance of succeeding. Like those of today, I believe that tomorrow’s customers will have differing views on what good design is. It’s important to have your own philosophy! I don’t believe in a future where products just rapidly change on a superficial level and follow trends – they need to have a soul. It gets interesting when something really new happens. Last but not least, our relationship with nature will be the key factor for successful design in the future.

Which of your products has the potential to become a future classic? What makes it a classic? This is something only future users can decide. Personally, I’m most satisfied so far with my Confair drop-leaf table for Wilkhahn. I and many others still find it convincing after almost 18 years, both as a concept and as a design. The same will probably apply to the new Volo easy chair for Lammhults. In my opinion, both have a clear, innovative and unique style and character. To create a classic, what you need apart from a successful design is a conscious and committed manufacturer with a strong, sustainable identity.

Where do you get your inspiration for the future from?From the people I meet and when I travel. Fashion is also relevant to me as it’s always been a great interest of mine. Fashion, both past and present, is always pleasurable. And pleasure is the most important source of inspiration for me as a designer.

What will a designer need to be able to do in 20 years’ time? To use their imagination and play with designs to produce things that will need to appeal to many types of people. Continue to rely on their gut feeling.

How important will brands be in 2030 when customers are deciding what to purchase?I can’t predict the future, but I think that vast majority of people will always choose what they like, regardless of brand. People sensitive to trends will continue to nurture their own style to express their personality. Personally, I often stick to one or two designers/brands that appeal to me.

Which major trends will influence the eyewear industry the most over the next few years?The retro theme will probably play a major role in design in the future. New material and flexible functions will also be key aspects of developments in the industry.

Swedish designer, mostly known for her jewellery under her own brand. She has been collaborating with Scandinavian Eyewear since 2002.

Designer with roots in Germany but experience from both the US and Italy. Constantly striving for sus-tainability in both design and manufacture. Most recently designed the Volo easy chair for Lammhults.

THE FUTURE AND DESIGN’S IMPETUS ACCORDING TO

Efva Attling

Andreas Störiko


Where do you get your inspiration for the future from?In my work as a designer, I work in several different product areas, and the cross-fertilisation between different professions and industries is a constant source of inspiration and creativity. Even if I work with products, I’m inspired by the large-scale structures of architecture and the wilful creativity of nature – where shapes, the juxtaposition of materials and experiences can provide inspiration for new solutions and idioms.

What kind of products do you think customers will be seeking out in 20 years’ time?As the question suggests, I think that people will to an increasing extent be ‘seeking out’ and actively selecting the products they wish to own and use. Today, we’re subject to a deluge of products and offers. I believe that we will increasingly be looking for products that are sustainable in the long term and that tell a story – products with added value over and above the functions they perform. They will need to affect people on a deeper level and become part of their personal image. We live in an increasingly digitalised and fast-moving world, which in parallel creates a need for slow, tactile values. The idea is to save time at one end, and use time properly at the other.

What does innovation mean to you as a designer?For me, innovation means new ways of thinking. Daring to see beyond established solutions. Thinking in new ways and creating new technical solutions, in terms of materials selection, functionality and production methods. But innovation also means thinking differently about how products can or should be used, how a product is perceived, and how a product makes me feel or act through its design. Design for me is a lot about piecing all these aspects together in a convincing whole. Innovation is doing this in a way that no-one else has done before. Walking paths that no-one has previously trodden – before they are well worn.

Which lifestyles will exert the strongest influence on design over the next ten years?The values being expressed in design over the next few years will be all about personality, authenticity and daring to be a nerd. We want to feel affinity with those who think like us, which we show through the items we surround ourselves with, how we dress, how we decorate our homes and what we eat. We live in a communicatively globalised world where the people we feel most affinity with are not necessarily always those we live closest to. This means that interests and lifestyles may become more and more narrow and ‘nerdy’. And as I see it, passionately devoting yourself to narrow interests will affect design. These products and designs may seem hard to interpret to the un-initiated, but those who understand the story and origin of the product will be even more enthusiastically positive. Authenticity and sin-cerity are also inherent in this approach.

Where do you get your inspiration for the future from? Over the past few years, more than ever before, the library of the future has been a topic of discussion. Which services should libraries offer? What is the effect of digital media? I take my inspiration from conferences and debates, as well as from discussions with col- leagues. The internet is full of discussions about the library of the future – if you google the phrase, you get 196 million hits. Last but not least, our customers are an important source of inspiration. After all, it’s their future we’re talking about.

Where in the world do you think your products will be in 20 years’ time?In libraries – but naturally solutions will look different and evolve at the same pace as the high-speed developments in the digital world. We in any case will continue to keep up the pace. On the one hand we have an extensively developed library community in Europe and North America, with many libraries being consolidated into fewer, larger facilities. On the other hand, other markets are in the process of building up and expanding their libraries.

What will the library of the future look like? What, according to your vision, will a library look like in 2030?The possibilities are infinite, but they are steered by digital development. There will naturally still be libraries in 2030. Visitor numbers have remained stable despite all the search engines, ebooks and online services. There is a need for a public meeting place that provides opportunities for learning and other experiences. I believe that the library of the future will gather together several public services under one roof. The learning trend will continue, and commercial elements surrounding libraries will increase. From an interior design perspective, there will be less storage of physical media, making space for product exposure, larger areas with eco-friendly furniture and new solutions for new services.

How do you think the library of the future will view its identity – regional or international?It depends which library we’re talking about. In higher education, libraries will be decidedly international. In larger public libraries, it will also be important to have a regional identity so the library is able to fit into the surrounding community.

Business area manager for Lammhults Library. In the midst of the action when it comes to the future and design of libraries.

Mikael Kjeldsen

Founder of design agency Jesper Design and industrial designer who has just started collaborating more extensively with Voice. Most recently designed cupboard No. 216.

Jesper Ståhl


LAMMHULTS OFFICE LAMMHULTS LIBRARY


Lammhults Design Group is divided into four business areas. Each of these is home to a number of brands– for example Abstracta, BCI, Ire, Lammhults, Skaga, Schulz Speyer and Voice – that are among the leaders in their respective markets. This breadth builds the Group’s value.

We put our heart and soul into creating interiors and spectacle frames with a high design value, high quality and innovative functions. Here, you can read about how this ambition has progressed in the business over the year.

ONE GROUP.FOUR BUSI-NESS AREAS.

LAMMHULTS HOME SCANDINAVIAN EYEWEAR

34

The Lammhults Office business area develops and markets interi-ors for public environments, where demands on design, functionality and quality are very high. It is made up of three brands: Lammhults, Abstracta and recently acquired Borks. Lammhults Möbel AB, with the brand name Lammhults, was founded as early as 1945. Since 2008 the Abstracta brand has also formed part of the subsidiary. The Borks brand has been included since November 2010.

Lammhults offers timeless, attractive and visually strong furniture with a high design value for both public and private settings, while Abstracta develops visual communication and screening products and flexible workstations. Borks manufactures qualitative and functional writing boards for conferences, meet-ings and educational environments.

Together, the brands make up a comprehensive offering for those look-ing for creative and functional interiors for workplaces and public spaces. The

Many items of furniture from Lammhults are also well known and established on private consumer markets. The products are sold via agents and dealers in the individual markets.

How the market worksThe most powerful driving forces behind customer demand for public interiors are normally relocation, renovation and new builds. This means that there may be wild fluctuations in demand over the course of a business cycle. Lammhults

products are manufactured in long-term collaborations with designers from the Nordic region and from other countries around the globe. With their strong international profile, many of the products have received design awards in both Scandinavia and other parts of the world.

Lammhults Office's end customers are mainly companies, organisations and public institutions. This makes architects who design and propose interiors a very important target market.

Åke Jansson, Business area manager

VoloLammhults. Design: Andreas Störiko. Launched at Stockholm Furniture Fair in February 2011.

L AMMHULTS DES IGN GROUP


Åke Jansson, Business area manager

By acquiring Borks, we have expanded our offering in the visual communication sector and moved forward in our efforts to become the Nordic market leader.

Office copes with these fluctuations by seeking out businesses that follow dif-ferent phases of the business cycle, for example by selling on several international markets and to both companies and public sector operations. For example, the biggest investments of corporate customers very often materialise at the end of the business cycle, when company profits have grown and the need for expansion has grown strong. On the other hand public operations, such as technical colleges and airports,

of collaboration, with requirements on creative meeting environments be-coming considerably more stringent. The need for products for visual communication and screening has also expanded as more and more customers choose flexible, open-plan office solu-tions. Also, customers are affected by technological developments that increase the potential for working more or less anywhere. This in turn results in offices tending to become smaller and more flexible.

usually base their investment decisions on parameters other than the ebb and flow of the economy. Relocation also takes place in all phases of the business cycle and forms an important foundation for business in slump periods.

Demand is also affected by the inte-r-iors trends current in society in general, for example open-plan solutions. The way people work and meet in professional contexts has changed radically over the past two decades. Formal meetings have shifted towards dynamic forms

Campus AirLammhults. Design: Johannes Foersom & Peter Hiort-Lorenzen


Rock’dAbstracta. Design: Eelco Voogd

LAMMHULTS OFFICE 2006 2007 2008 2009 2010 Net sales, SEK m. 290.9 313.4 352.9 283.3 287.8 Operating profit, SEK m.* 36.1 34.4 46.6 25.6 32.8Operating margin, % 12.4 11.0 13.2 9.0 11.4Capital employed, SEK m. 132.9 136.7 147.6 128.6 166.6Return on capital employed, % 27.7 25.5 32.8 18.7 22.4Investments, SEK m. 5.4 5.8 5.0 1.8 2.4Average number of employees 145 142 154 135 135

* excluding administration fees to the Parent Company.

The business area’s economic development as stated above is reported in accordance with IFRS. Values for the years 2006–2008 were recalculated from compliance with the Swedish Accounting

Standards Board’s General Recommendations to compliance with IFRS in the 2009 annual report.


The business area’s sales increased by 2% to SEK 288 million. The operating margin rose to 11.4% (9.0) thanks to an improved gross margin and implemented cost savings.

Sales were affected by the decision that the Abstracta brand will no longer sell technical products but instead concentrate on products with a higher added value. This corresponded to a conscious reduction in sales of around SEK 10 million in 2010.

The business area acquired Borks Patenttavler A/S in Kolding, Denmark, at the end of 2010. Borks operates in the area of visual communication and directly boosts Abstracta’s product area. Through this acquisition, our quest to become the leader in the area in the Nordic region was confirmed further. Borks is a very well-established company that works with designers on product development in the same way as Lammhults Möbel AB does.

A number of new products were launched during the year. One of those devoted the most attention was Andrea Ruggiero’s Mobi, a mobile workstation that was also awarded two American design prizes in the autumn. Gunilla Allard presented her Comet conference chair in several versions, along with her Cargo serving trolley in a new version called Cargo Gastro. Anya Sebton showed a new version of Millibar – Millibar Soft Lounge. Johannes Foersom and Peter Hiort-Lorenzen supplemented their Campus Air chair with an armchair. Eelco Voogd presented the mobile writing board Sketchalot and the Base and Rock’d pouffes.

Important events in

2010

Finally, demand is naturally driven by good design. Design that is inno-vative and has a strong identity gives competitive advantages and attracts customers in the long term. For this reason Lammhults Office has secured long-term collaborations with a select group of prominent designers, including Gunilla Allard, Nina Jobs, Anya Sebton, Johannes Foersom (Denmark) Peter Hiort-Lorenzen (Denmark), Love Arbén, Stefan Borselius, Mia Wahlstein, Josef Zetterman, Fredrik Wallner, Andrea Ruggiero (USA), Eelco Voogd (Nether-lands) and Andreas Störiko (Germany).

The market in 2010The aftermath of the financial crisis was clearly evident in many parts of the

remaining 40% going to export markets. Apart from our neighbouring Nordic countries, our biggest export markets were Germany, the UK, France, the US and the Netherlands. Major progress was made in the UK, where sales increased by SEK 4 million to SEK 7 million. However, international competition in the sector continues to be tough, above all from German, Danish and Italian companies.

Western world. Demand in 2010 was marked by insecurity, with new econ-omic scenarios with a high level of indebtedness, low inflation and high unemployment – but no sign of recovery. The exceptions were Sweden and Germany, where a clear recovery was under way, and the BRIC countries (Brazil, Russia, India and China), where the economy benefited from growth.

The business area has developed in line with the market. This means a level unchanged compared with 2009, with growth in Sweden and Germany. Our market position in Scandinavia, where Lamm-hults Möbel has long been one of the market's major players, remained intact.

Of the business area's sales, 60% were made to Swedish customers, the

Cargo GastroLammhults. Design Gunilla Allard


The Lammhults Library business area produces creative, attractive and functional interiors for libraries, schools and other public meeting places, such as educational premises and arts centres. The business area includes the BCI, Eurobib Direct and Schulz Speyer brands.

The business is organised into Swedish subsidiary Lammhults Biblioteksdesign AB, Danish subsidiary Lammhults Biblioteksdesign A/S and German subsidiary Schulz Speyer Bibliotheks-technik AG. Sales and marketing are handled by a network of subsidiaries in Belgium, the UK, France, Spain, Italy, the Netherlands, Austria and Norway. The Norwegian company is 50% owned by Lammhults Biblioteksdesign AB. In other markets around the world, sales are made through local dealers.

The business area is divided into two parts: project sales of complete interiors systems such as shelving and furniture, and aftermarket sales of furniture and consumables via catalogues and online stores. The Swedish and Danish subsidiaries share an organisation and head office for project sales under the BCI brand in Danish Holsted, while the head office for aftermarket sales is in Lund, Sweden, under the Eurobib Direct brand. Production takes place at the company's own facilities in Denmark and at subcontractors' facilities. Germany-based Schulz Speyer has an independent organisation but works

to grow, it must do so by increasing its market share, or by expanding into new markets. Today, Lammhults Library is more or less the only international player.

Different markets can differ wildly in terms of competition. Generally speaking, there are often one or two major local players, plus a couple of smaller local players. At the same time, the market is strongly affected by a number of forces that are in the process of radically restructuring the industry.

One such trend is that of having larger, more centralised libraries, and that customers have become increasingly inclined to invest in more media centres and arts centres. An explanation for this is the growing need in communities for landmarks – buildings that are assigned a special role in the public sphere and can function as meeting places. It is particular important to preserve the role of the library as a conveyor of knowledge and provider of support for schoolchildren’s homework. Creating a learning environ-ment with interiors and IT is a key task. As libraries are increasingly transformed into meeting places and experience

closely with its fellow subsidiaries where for example purchasing is concerned.

All three brands in the business area are leading in their respective market niches, and taken as a whole, Lammhults Library is the world leader in library interiors. Together with the other businesses in Lammhults Design Group, there is potential for completely unique offerings to customers.

Lammhults Library's end customers are mainly players whose operations are financed via public funds, such as municipalities and general educational institutions. This means that architects who design and propose interiors are an important target group when working the market.

How the market worksAs investments in buildings such as libraries, media centres and arts centres are so strongly linked to public operations, the market for library interiors is a niche market that largely follows its own logic. Customers are dependent on the public economy and the will of authorities to invest. For this reason, the market is relatively constant. If a business wants

Mikael Kjeldsen, Business area manager


Mikael Kjeldsen, Business area manager

One trend is that of having larger, more centralised libraries, and that customers have become increasingly inclined to invest in more media centres and arts centres.

Oslo National Academy of the Arts. Oslo, NorwayBCI


LAMMHULTS L IBRARY 2006 2007 2008 2009 2010 Net sales, SEK m. 339.3 315.5 353.5 365.0 318.2 Operating profit, SEK m.* 33.4 32.7 45.3 35.7 13.8Operating margin, % 9.9 10.4 12.8 9.8 4.3Capital employed, SEK m. 136.1 141.7 189.0 196.6 157.6Return on capital employed, % 27.8 24.8 28.7 19.4 8.0Investments, SEK m. 7.5 3.4 5.0 7.1 3.0Average number of employees 150 140 150 158 162


The business area’s economic development as stated above is reported in accordance with IFRS. Values for the years 2006–2008 have been recalculated from compliance with the Swedish Accounting


Schulz KinderbibliothekSchulz Speyer. Design: Hartmut Michalke


centres, design and architecture grow in importance. This is not least noticeable in the fact that architects are demanding unique solutions to a greater extent.

Trends from the interiors of retail outlets and commercial environments are increasingly visible in libraries. Books, magazines and other media are presented in a more appealing and lucid manner. Instead of rows of book spines, the library visitor increasingly encounters the front cover of the book.

Another trend is the developments in technology. Through the emergence of the ebook and the growth of digital media, the bookshelf is becoming a less crucial feature in libraries. Many libraries are therefore reducing the number of books housed to make way for meeting places and technical equipment for entertainment such as films and games. This in turn gives rise to a need for new interiors.

Maintaining a high design profile will continue to be important in terms of achieving positive growth. The business area collaborates with established designers in the area, such as Lars Vejen, Björn Dahlström, Louise Hederstrom, Marie-Louise Gustavsson and Frans James.

and supplied interiors for several major projects, including the National Library of Kuwait, Georgetown University in Qatar, and a call-off order for 140 school libraries in Abu Dhabi. There are no signs that the financial crisis impeded invest-ments in the Middle East in 2010.

As library interiors are a niche market, it is important for the business area to continue its international expansion. Lammhults Library is currently market leader in the Nordic region and in Western Europe, and is well established in the rest of Europe and the Middle East. The business area is also repre-sented to a lesser extent via dealers in North America, Asia, North Africa and Australia. Western Europe is a prioritised area with great potential for large volumes. The Middle East is yet another important area. In the future there will also be major potential in the BRIC countries, North America and Eastern Europe.

The market in 2010Restrictive public investments in a number of European markets curbed performance for Lammhults Library businesses during the year. Several countries have made significant cuts in their investments in culture, both in the public and the private sector. This has also affected the library segment and several projects have been delayed. In terms of sales, this has meant a fall of 13%. Lower sales in combination with major restructuring have pulled down the operating margin to 4.3% (9.8).

At the start of 2010, a major organi-sational change took place, including adapting the project organisation to deal with a lower level of activity. This adap-tation will come into full effect in 2011.

One of several positives during the year was the success of the British subsidiary with its conscious focus on interiors with a high level of design. The UK company was set up in 2008 and achieved sales of SEK 21.5 million in 2010, more than double those of the previous year. Growth was underpinned by several framework agreements.

In the Middle East, Lammhults Library continued its positive growth trend

The business area’s sales decreased during the year by 13% to SEK 318 million. Operating profit was charged with SEK 6 million in non-recurring costs for stock depreciation and staff cuts, with the aim of streamlining the organisation in the future. The operating margin was 4.3% (9.8).

Schulz Speyer Bibliothekstechnik acquired the library segment of its Italian dealer, Harmonie Projects.

Several major projects were carried out, including for the National Library of Kuwait and Georgetown University in Qatar.

A new business system was implemented in the Danish subsidiary. Other companies will follow, implementing the system gradually.


2010


The Lammhults Home business area develops and markets home interiors products. It is made up of two brands: Voice and Ire. It includes Lammhults Home AB (formerly Voice AB), with Ire Möbel AB as a subsidiary. Together, the brands make up one of the strongest product ranges in the home interiors market, with both upholstered furniture and storage solutions.

The product base of the Voice brand consists of storage furniture, chests of drawers, chairs and tables, combining a feel for design with innovative ability and flexibility. Production is based on a com-ponent concept in which components are purchased from various subcontractors for assembly and packaging at Lamm-hults' own facility. This means that the furniture can be developed with great flexibility and be adapted to the market.

The Ire brand, established as early as 1939, is known for its visually strong upholstered furniture, including sofas and armchairs. Longevity is the keyword in terms of both design and quality. The furniture is flexible and functional, with features such as different covers that

design and interiors. Examples include the growing interest in sustainable design, the open-plan trend and the tendency to give our homes a makeover more frequently.

Even if modern consumers buy sofas and storage solutions regardless of the economic situation, customer prefer-ences are affected by both good and bad times. At present, one customer preference of note is the strong interest in vintage and for interiors that mix old with new – this fits in with the fact that the need for security and lasting values tends to increase in turbulent times.

The market is also driven by demand for a greater diversity of personal and unique interiors solutions. It is becoming

can be removed and washed. Production combines modern technology with com-puterised cloth cutting, which ensures the highest level of precision, and classic craftsmanship in the assembly phase.

The business area's end customers are primarily private consumers, but the products are also suitable for public environments that require a cosy atmos- phere, such as hotels. The products are sold primarily via dealers in the individ-ual markets.

How the market worksSeveral factors drive demand for the business area's products. First and foremost, customers are influenced by major trends in society in the areas of

Sonnie Byrling, Business area manager

No. 216Voice. Design: Jesper Ståhl. Launched at Stockholm Furniture Fair in February 2011.


Forza / Opus TableIre Design: Carl Henrik Spak

Sonnie Byrling, Business area manager

Innovative ability and insight into consumers continue to be crucial to remaining competitive in the area of product development.


WindowVoice. Design: Carl Henrik Spak

LAMMHULTS HOME 2006 2007 2008 2009 2010 Net sales, SEKm 60.5 82.7 86.8 93.3 73.4 Operating profit/loss, SEKm* 5.2 8.4 3.5 3.7 -9.0Operating margin, % 8.6 10.1 4.0 4.0 -12.3Capital employed, SEKm 38.6 36.2 57.5 59.4 52.8Return on capital employed, % 13.2 22.7 7.8 6.5 -16.0Investments, SEKm 1.8 1.1 15.6 7.8 2.2Average number of employees 28 33 44 52 48




ArcticVoice. Design: Rolf Fransson


increasingly important to express your personality through your home. This trend can also be seen in public settings such as hotels, which to an increasing extent are demanding products from this business area. They wish to create rooms that are stylish and durable but have a cosy and personal ambiance.

New trends in the workplace are another strong impetus. The needs of private consumers for home-working solutions are growing, along with companies' needs for creative meeting places. This has led to comfortable upholstered furniture and environments that largely resemble the home becoming increasingly common in offices too.

The competition is generally stiff in all of the business area's markets, but the Voice brand has long enjoyed an exceptional position through its ability

ness, upholstered furniture and storage furniture, which is sold and distributed via dealers, there was less of a decline. The Norwegian and Danish markets have been weak, leading to large individual customers shutting down operations, which has severely affected the business area.Around 68% of sales were made to the Swedish market during the year, with the remainder made to export markets. The majority of exports went to neigh-bouring Nordic countries, in which the business area’s products are well estab-lished. Sales were particularly good in Finland but fell in Norway and Denmark. On the other export markets, sales to the Netherlands and the UK decreased while increasing in Germany.

to adapt its offering to customer needs with relatively short lead times. Inno-vative ability and insight into consumer preferences continue to be crucial to remaining competitive in the area of product development. High quality and attention to detail are other important components for companies wishing to stand out among the competition.

The market in 2010Demand for the premium segment of the furniture market has continued to be weak in Sweden, and sales in the business area decreased by 21% during the year. A large part of this can be at-tributed to the business area supplying hotel interiors projects to the tune of approximately SEK 10 million in 2009 and there being no equivalent projects in 2010. In the business area’s core busi-

The business area’s sales decreased during the year by 21% to SEK 73 million. The result was charged with non-recurring stock depreciation to refine the product range amounting to around SEK 4 million. The operating loss totalled SEK 9,0 m. compared to an operating profit of SEK 3,7 million the previous year. A programme of measures has been initiated to increase market penetration and improve profitability.

During the year, Lammhults Home stepped up its work to target public environ-ments – among other things, it has supplied furniture for Bonnier’s head office in Stockholm and won a major export order for staff housing in North Africa.

Ire Möbel supplied Inline armchairs for a new cruise liner in Germany to a value of SEK 1.2 million.

The company also carried out an ISO 14000 certification process as part of its long-term environmental and sustainability strategy.

A new business system was implemented at Lammhults Home AB at the turn of 2010/2011.

Collaborations with new designers continue. Several exciting projects have been started during the year. For example, Emma Olbers designed a new sofa, and Stina Sandwall continued with new projects for hall furniture and storage.


2010

Join/RejoinIre Design: Emma Olbers


Joakim Brobäck, Business area manager

The Scandinavian Eyewear business area develops and markets spectacle frames with high design value and a clear Scandinavian feel. It includes Scandinavian Eyewear and the Italian subsidiary Seven.

Scandinavian Eyewear develops its own Skaga brand, as well as collections under the Efva Attling, Oscar Magnuson, Pilgrim, Oscar Jacobson and Lexington brands. The brands differ from one another but are connected by a strong sense of design, attention to detail, high quality and a finger on the pulse of fashion.

End customers are those looking for high-quality eyewear to express their life- style and identity. The business area's direct customers are individual opticians and optician chains in Sweden and in the export markets.

Design, prototype production and testing take place in Sweden, while

many people consider eyewear to be a very individual, day-to-day accessory strongly linked to current trends. This behaviour can above all be seen in the fact that people change eyewear increasingly often. From having changed every 7 years, the average Swedish user buys new eyewear every 3½ years. In the rest of Europe, users change eyewear even more often, with the corresponding frequency being every other year. The link with fashion is clearly evident in how famous fashion brands have expanded into the eyewear market through brand extension. The current trend, however, is moving towards more toned-down and basic brand expressions – a backlash

manufacture is localised in Italy and China. New collections are presented four times a year. Thanks to its modern facility for spectacle frame warehousing and distribution, Scandinavian Eyewear, located in Jönköping, is able to offer efficient distribution and a high level of delivery reliability.

How the market worksThere are often two factors that are decisive in a customer’s decision to purchase new eyewear: the need for vision correction and a desire to express their own personal style.

Fashion trends also have a major impact on the business area, and today


against the major logo exposure of recent years.

The need for vision correction also continues to be strong, and this is expected to propel the market in the years to come. Studies have shown that the market for contact lenses is not growing at the expense of the eyewear market.

In general the European eyewear markets are similar in structure: a number of strong local chains dominate,

fashion houses whose eyewear is manufactured and sold via brand licences by players such as Luxottica, Safilo, Marcolin and Marchon. Scandinavian Eyewear is active in both camps and is the biggest subcontractor on the Swedish market. The company also occupies a strong position on the Nordic market and additionally exports specta-cle frames to around 20 countries.

supplemented by a large number of independent opticians that are part of a purchasing cooperative. In turn, these are served by a number of subcontrac-tors, including Scandinavian Eyewear. The subcontractors can be divided into two camps. On the one hand, there are manufacturers that only focus on own-brand eyewear, such as French company Mikli and Danish companies Lindeberg and Prodesign. On the other, there are

Joakim Brobäck, Business area manager

Scandinavian Eyewear also occupies a strong position on the Nordic market and exports spectacle frames to around 20 countries.

AmySkaga. Design: Anna Mälstad


SCANDINAVIAN EYEWEAR 2006 2007 2008 2009 2010 Net sales, SEKm 119.3 122.3 113.2 104.8 104.6 Operating profit/loss* 26.0 15.9 4.4 -5.9 3.7Operating margin, % 21.8 13.0 3.8 -5.6 3.5Capital employed, SEKm 48.9 36.5 30.1 27.7 28.4Return on capital employed, % 64.9 38.3 14.4 -19.4 13.7Investments, SEKm 2.3 1.8 1.8 0.8 0.5Average number of employees 44 46 49 46 44

* excluding administration fees to the Parent Company. The operating profit for 2006 contained a capital gain in the amount of SEK 9 million further to the sale of property.



TwistedEfva Attling. Design: Efva Attling


The market in 2010Due to its strong exposure to private consumption, the eyewear market is situated early on in the business cycle. The purchasing behaviour of end customers was therefore affected by the financial crisis in the global economy and the economic decline in 2009 and 2010. On the Central European and North American markets, it has been assessed that end customers bought less eyewear in 2010.

and a shift of volumes from traditional opticians to low-price players and online stores. A number of savings measures have been taken to reduce costs in the business area; at the same time, Scandinavian Eyewear has retained its strong position in the market. The company is well equipped to develop its business in the changing Nordic market and grow in the export market in both Central Europe and North America.

The Nordic market was primarily affected in 2010 by changes in end-customer behaviour, a direct con-sequence of optician chains seizing significant shares from more traditional opticians by using aggressive price communication. Also, online sales of spectacle frames have increased, and this trend is predicted to continue in the future. In 2010 suppliers of spectacle frames to the Nordic market experi- enced both increased price pressure

Net sales totalled approximately SEK 105 million, which was in line with the previous year’s level. Thanks to successful restructuring efforts, profitability was improved and the operating margin reached 3.5% (-5.6),

During the year, the Pilgrim, Oscar Jacobson and Lexington brands were launched on a broad front, which contributed positively to the result and is expected to continue to bolster the company in the Nordic market.

A new licensing agreement with Face Stockholm was signed. The brand will be launched at the end of 2011 or at the beginning of 2012.

New strategic agreements were entered with Synsam Nordic and NOA (Nordic purchasing group).

Efva Attling was declared Synsam’s most valuable brand by the chain’s opticians. Scandinavian Eyewear was named the best supplier of frames by Swedish Synologen, a purchasing organisation for opticians.

Several major orders were received and delivered to the Nordic chains included in Pearle Europe, one of the world’s biggest optician groups.


2010


While developing, manufacturing and marketing safe products of the highest quality that satisfy the demands of the market, Lammhults Design Group is required to maintain a close focus on environmental factors. Each company in the Group has adopted an environ-mental policy aligned with the Group-wide policy adopted by the Board of Directors of the Parent Company.

Our history bears witness to products with timeless design and sustainable solutions. This is also our pledge for the future. The Group’s mission expresses this in the words “Furniture and interiors for sustainable work and home environ-ments for life’s professional and social relationships, which promote and support human interaction and collaboration”.

We are seeing increasing require-ments for sustainability in the prescrip-tive stages, with specifications during public procurement, increased consum-er awareness, and commitment from employees and designers.

We take requirements and expecta-tions from owners, customers, employees and the wider community seriously. All in all, these driving forces coincide with our own aspirations to develop new prod-ucts and our business. Our attention to

They were followed in 2010 by Ire Möbel AB. One of Ire’s core values is longevity, a term that covers several aspects: sustainable quality, long-term relation-ships and, of course, a durable approach to the environment and the company’s environmental impact. Together with designer Emma Olbers, Ire has also produced a new sofa model in line with the requirements for Swedish Svanen ecolabelling.

None of the Group’s companies con-ducts operations that in themselves can be classified as particularly environmen-tally hazardous, which is why there is no need to acquire permits or report opera-tions under the Swedish Environmental Code. During the year, oil-fired heating at our facilities in Sweden was phased out. All production units in Sweden are now connected to district heating plants. A Group-wide tender for electricity for all units in Sweden was carried out, in which a gradual transition to environ-mentally sound electricity based entirely on renewable energy is taking place.

The decision has been made to compile and report on our sustainability work as of the 2011 financial year, in accordance with the directives in GRI G3 (Global Reporting Initiative).

detail and the responsibility we take for the environment and wider community form the basis of our sustainability work. We have noted that the recently adopted ISO 26000 standard serves as an excellent guide to social responsibili-ty. We want to continue to develop both our products and our work methods in a systematic and successful manner that supports our mission.

Sustainability is a theme that is being devoted increasing attention in the Group’s product development process-es. We strive to create products that are extremely durable, not only in terms of wear and tear but also in terms of ap-pearance. Often, style and appearance trends have a significantly shorter life- span than the product itself, which is why we set great store by producing products with a modern and timeless design idiom. Sustainability is much more than just the choice of materials, means of transport and recycling. We also try to limit the environmental impact of our products in their design to ensure they are the opposite of disposable products.

The businesses Lammhults Möbel AB and Lammhults Biblioteksdesign AB are already certified to the ISO 14001 environmental management system.

Sustainability work in Lammhults Design Group

We see Imprint as a suitable place to sit for discussions about an eco-friendly future. The seat is made from Lammhults’ own innovative cellulose fibre material, Cellupress. It is a material with the same versatile properties as plastic but with potential to provide the furniture industry with new opportunities for eco-friendly alternatives. The raw material for Cellupress is thinning material from the forestry industry. The cellulose is then treated using pioneering technology. The result is a material that can be formed into more or less any three-dimensional shape.



S-70 series.Lammhults. Design: Börge Lindau & Bo Lindekrantz


Governance and application of the Code Lammhults Design Group AB is a Swedish company with limited liability. Its registered office is in Växjö, Sweden. The Company is governed via the Annual General Meeting of Shareholders (AGM), the Board of Directors and the President in accordance with the Swedish Compa-nies Act and the Company's Articles of Association, as well as Nasdaq OMX Stockholm's Regulations for Issuers, including the Swedish Code of Corporate Governance (the Code). Effective 1 July 2008, a revised code of corporate gover-nance includes all companies that are quoted on the OMX or NGM Exchanges. Governance in the Group has been based on the Code since then. The aim of the Code is to establish conditions favouring an active and responsible ownership role. It is one part of self-regulation in the Swedish business sector. The Code is based on the principle of comply or explain, which means that it is not a crime to deviate from one or more rules in the Code provided that a justification exists and is explained. Lammhults Design Group has no deviations from the Code to account for in 2010. The Corporate Gover-nance Report has been examined by the company’s auditor.

Information on the Annual General MeetingShareholders' influence in the Company is exercised at the Annual General Meeting (AGM), which is the Company's highest decision-making body. At the AGM, share-holders vote on resolutions, for example, on adopting the annual accounts and the consolidated financial statements, distributing the company's profit or loss, discharging the Members of the Board and the President from liability, electing the Board and its Chair and, where ap-

each appoint one member, who should not be a Member of the Board, to the Nomination Committee. The role of the Nomination Committee is to propose to the AGM the number of Board Members, the Chair of the Board, other Board Mem-bers, and fees payable to the Board and auditors. It also proposes the auditors in the years in which they are to be elected. The Nomination Committee for the 2011 AGM consists of the following persons: Anders Hultman (Chairman, appointed by Scapa Capital), Jimmy Bengtsson (appointed by Livförsäkringsbolaget Skandia), Göran Johansson (by power of attorney) and Lars Johansson (appointed by Jerry Fredriksson).

Work of the Board of DirectorsAccording to the Swedish Companies Act, the Board of Directors has overall responsibility for the organisation and administration of the Group, as well as for overseeing that the quality of financial reporting, asset management and other financial conditions is satisfactory. The Board takes decisions on issues relating to the Group's overall objectives, strategic direction and policies, as well as on major issues relating to finance, acquisitions, disposals and investments. The work of the Board of Directors of Lammhults Design Group AB is governed by the rules of procedure annually adopted by the statutory Board meeting. These regulate the Board's working methods and overall tasks, the holding of Board meetings, forms of ongoing financial reporting and the allocation of tasks between the Board and the President. The relevance of the rules of procedure is reviewed every year.

During the year, the Board of Directors held five ordinary meetings in addition to the statutory meeting. The meetings were devoted to financial follow-up of oper-ations, strategic issues, budget discus-sions, acquisition and disposal issues, recruitment issues and external financial information. The President and the CFO take part in the meetings of the Board, in a reporting capacity.

The Board meetings were prepared by the President and the CFO. The President provided the Board Members with written reports and supporting documentation at least five working days prior to each respective meeting. The Members of the Board received monthly reports regularly during the year, informing them of the financial and operational developments

propriate, an auditor, as well as on how the nomination committee is to be consti-tuted, remuneration to the Board and the auditors, and guidelines on remune-ration to the President and other senior executives. Function of the Annual General MeetingThe company does not apply any special arrangements as regards the running of the AGM, either on account of provisions in the Articles of Association or, as far as the company knows, shareholders’ agreements. Limitations on voting rightsThe Articles of Association of the company contain no limitations regarding how many votes each shareholder may cast at an AGM. Certain provisions of the Articles of AssociationThe Articles of Association of the company lack special provisions on ap-pointing and dismissing Board members or on amending the Articles of Association. Direct or indirect shareholdingsThe following shareholders have a direct or indirect shareholding in the company, representing at least a tenth of the num-ber of votes for all shares in the company: Scapa Capital AB (25.8% of the votes) and Canola AB (16.3% of the votes).

2010 Annual General MeetingLammhults Design Group's AGM, held on 28 April 2010, was attended by around 100 shareholders and guests. The shareholders in attendance represented around 69% of the total number of voting rights in the Company. In addition to the usual decisions at the meeting, Torbjörn Björstrand (Chairman), Yngve Conrads-son, Jerry Fredriksson, Erika Lagerbielke, Lotta Lundén and Anders Pålsson were re-elected as Board Members. The AGM also resolved to authorise the Board to carry out a new share issue of a maximum of 800,000 Class B shares. The dividend was set at SEK 1.50 per share. The role of the Nomination CommitteeThe AGM resolved that the Chair of the Board should, no later than at the end of the third quarter every year, call a meeting with the four largest shareholders in terms of equity stake and/or voting rights in the company. These parties will then

Corporate Gover-nance Report.


in the Group. The reports were drawn up jointly by the President and the CFO. Presence of Board members and their evaluation A total of six meetings were held in 2010. The attendance at these meetings was as follows: Torbjörn Björstrand (6), Yngve Conradsson (6), Jerry Fredriksson (6), Erika Lagerbielke (5), Lotta Lundén (6) and Anders Palsson (6). The Board Chair ensures that the work of the Board is eval-uated once a year. In addition, the Board evaluates the work of the President. On the basis of the results, measures are taken on an ongoing basis by the Chair and management to improve the quality of work by the Board.

Composition of the BoardAccording to the Articles of Association, the Board is to be made up of no less than five and no more than twelve members, with no more than five deputies. Since 2005, Torbjörn Björstrand has been Chair-man of the Board. All Board members are independent of the company and the company's management. One of the Board members, Yngve Conradsson, has a relationship of dependence with the biggest shareholder, Scapa Capital AB, while another, Jerry Fredriksson, has a relationship of dependence with Canola AB, the second biggest shareholder in Lammhults Design Group AB. The other four Board members are independent of the biggest shareholders. For further information on the individual Board mem-bers, see page 56.

Remuneration of the Board of DirectorsRemuneration to the Board is subject to resolution by the AGM. The 2010 AGM resolved that total fees to Board Members for the period up until the next AGM shall amount to SEK 840,000 (840, 000), including SEK 240,000 (240,000) to the Chairman of the Board. The other Board members each receive a fee of SEK 120,000 (120,000). In addition, the AGM resolved that remuneration for Audit and Remuneration Committee assign-ments should amount to a maximum of SEK 100,000 (0), to be distributed as per Board decision. The Board resolved that the chair of each committee should receive SEK 25,000 and that other mem-bers of each committee should receive SEK 12,500 each.

AuditingAccording to the Articles of Association, the company shall engage one or two auditors or one or two auditing firms. The company's auditors are elected by the AGM for a period of four years. The cur-rent period commenced in April 2008 and will expire in conjunction with the AGM to be held in 2012. The auditing firm KPMG AB was appointed auditor at the 2008 AGM, with Michael Johansson being ap-pointed principal auditor. The company's principal auditor attends at least one Board meeting a year and reviews the auditing for the year.

Audit CommitteeThe main task of the Audit Commit-tee is to support the Board in its work on quality assurance of the company's financial reporting. The Committee meets the company's auditor regularly to keep informed of the risks (both commercial risks and risks of errors in the financial re-porting) that have emerged in the course of auditing. The Committee also discuss-es important accounting issues affecting the Group. The Audit Committee has consisted of Anders Pålsson (Chairman), Erika Lagerbielke and Lotta Lundén, and all of them have attended all of the Committee meetings. The Chairman of the Audit Committee is responsible for ensuring that the Board as a whole is continuously kept updated on the work of the Committee. Remuneration CommitteeAt the statutory Board meeting in 2010, Torbjörn Björstrand (Chairman), Yngve Conradsson and Jerry Fredriksson were appointed to form Lammhults Design Group's Remuneration Committee. The Committee submits proposals to the Board regarding the President's employ-ment conditions, including benefits. The remuneration of other senior execu-tives is determined by the Board on the basis of proposals from the President. The President is required to inform the Remuneration Committee annually in advance of remuneration proposed for senior executives directly accountable to the President. All three members have attended all Committee meetings.

President and Group managementThe President manages the business in accordance with the rules of procedure adopted for the Board of Directors and

the President, and in accordance with the Board's instructions. The President is responsible for ensuring that the Board receives the objective, detailed and relevant information and material for decisions required to enable the Board to make well-informed decisions.

Group management comprises the President, the four business area man-agers of Lammhults Office, Lammhults Library, Lammhults Home and Scandi-navian Eyewear, and the CFO and Supply Chain Manager. For further information on the individual Board members, see page 58.

The President and CFO also hold business reviews with the company man-agement of each business area. These forums are devoted to financial follow-up, business development, strategic issues and discussion of acquisitions.

Remuneration to President and Group managementGuidelines on salaries, bonuses and other remuneration to the company's senior executives are for resolution by the AGM. For 2010, the AGM resolved that remu-neration paid by the company should be in line with the market and competitive, such that the company is able to recruit, motivate and retain competent and skil-led personnel. The Group's senior exec-utives, comprising in all seven individuals who make up Group management, have agreements on variable remuneration over and above a fixed salary. The size of the variable remuneration is linked to pre-determined objectives based on individu-ally set goals and the Group's results, or the results of the particular business area. Variable remuneration to senior execu-tives may amount to a maximum of four months’ salary per year. Long-term share or share-related incentive programmes must be an option. For further informa-tion on salaries and other remuneration, see Note 6.

Internal controls and risk managementThe overall purpose of internal controls is to ensure to a reasonable degree that the company's operational strategies and objectives are followed up and that the investment of the owners is pro-tected. Furthermore, internal controls are intended to ensure that external financial reporting is, with a reasonable degree of certainty, reliable and prepared in accordance with Generally Accepted


Accounting Principles, that applicable laws and regulations are complied with, and that the requirements to which listed companies are subject are observed.

The Board bears the ultimate re-sponsibility for ensuring that the internal controls in Lammhults Design Group are adequate. The President is responsible for ensuring that an adequate system of internal controls is in place that covers all significant risks of errors in the company's financial reporting.

Control environmentThe control environment is the basis of internal controls of the financial reporting. The Group's internal control structure is based inter alia on a clear division of re-sponsibilities and roles, not only between Board and President but also within the operational activities. Policies and guide-lines are documented and evaluated continuously by Board and management. Risk assessmentOn the basis of regular discussions and meetings within the organisation, Lammhults Design Group's management identifies, analyses and decides on the way risks of errors in financial reporting are to be managed. The Board addresses the outcome of the Company's risk as-sessment and risk management process, in order to ensure that it encompasses every important area, and determines policy and – where required – the actions necessary. The Group's significant risk and uncertainty factors include business risks in the form of high exposure to cer-tain sectors, and financial risks. Financial risks, such as currency, interest rate, finance and liquidity risks, are managed in the main by the Parent Company's fi-nancial control function, while credit risks are dealt with primarily by the financial control function in the particular business area.

Control activitiesThe principal aim of control activities is to prevent or, at an early stage, to discover errors in financial reporting so that they can be addressed and remedied. Rou-tines and activities have been designed to deal with and remedy significant risks associated with financial reporting. The President and CFO monitor the business areas via regular meetings – business reviews – with the management of the particular company regarding its opera-

tions, financial position and results, as well as its key financial and operational ratios. The Board analyses inter alia monthly business reports, in which the President and CFO report on the past period and comment on the financial position and results of the Group and the particular business area. This enables significant variations and deviations to be moni-tored, minimising the risks of error in the financial reporting. The processes of end-of-period and annual accounting involve risks of error in the financial reporting. These routines are of a less-than-repet-itive nature and include several stages where judgement is required. During control activities, it is thus important that an efficient reporting structure should be in operation, in which the business areas report using standar-dised reporting forms, and that important income statement and balance sheet items receive comment.

Information and communicationThe information provided by Lamm-hults Design Group must be accurate, transparent and rapidly accessible, and must be distributed simultaneously to all stakeholder groups. All communication is to be made in accordance with the rules of Nasdaq OMX Stockholm, and with other applicable regulations. The finan-cial information must give the capital and equity markets, as well as current and fu-ture shareholders, a comprehensive and clear picture of the Group, its operations, strategy and financial development.

Each business area has a financial controller who is responsible for main-taining high quality and a high degree of accuracy in the financial reporting. The CFO regularly informs these financial controllers of any changes in Group-wide accounting policies and other issues relevant to the financial reporting.

Follow-upThe Board's follow-up of internal controls of the financial reporting is conducted partly in the form of reports from the Audit Committee and partly through the annual follow-up of parts of the system of internal controls by the Company's external auditors, within the framework of the statutory audit. The external auditors report the outcome of their audit to the Audit Committee and Group manage-ment. Important observations are also communicated directly to the Board.

The company's principal auditor attends at least one Board meeting a year and reviews the auditing for the year.

Another means of follow-up is monthly and quarterly reports to the Board showing financial outcomes, in-cluding the management's comments on the business and internal controls.

Statement on internal controlsNothing has emerged to indicate that the system of internal controls is not operat-ing in the manner intended. Consequently, the Board has decided not to set up an internal audit function. This decision will be reviewed annually.

The Corporate Governance Report has been examined by the company’s auditor.

Lammhult, 14 March 2011Board of Directors

Växjö, 14 March 2011KPMG AB

Michael JohanssonAuthorised Public Accountant

Auditor’s statement on the Corporate Governance Report

To the Annual General Meeting of Shareholders in Lammhults Design Group AB (publ), corp. reg. no. 556541-2094

The Board is responsible for the Corporate Governance Report for 2010 on pages 52–55 and for ensuring that it is compiled in accordance with the Swedish Annual Accounts Act.

As a basis for our statement that the Corporate Governance Report has been compiled and is in compliance with the Annual Report and Con-solidated Accounts, we have read the Corporate Governance Report and assessed its statutory content based on our knowledge of the company.

We consider that a Corporate Governance Report has been compiled, and that its statutory information complies with the Annual Report and

Consolidated Accounts.


Torbjörn Björstrand

Chairman. Board member since 1997. Born in 1945. Lives in Växjö.Independent Board member vis-a-vis the company and company management; major shareholder in the company.

EDUCATIONAL QUALIFICATIONS AND PROFESSIONAL EXPERIENCE

Graduate engineer (B.Sc.). Previously served as Vice-President of Fläkt Industri AB, Vice-President of Orrefors Kosta Boda AB, President of Thule Sweden AB and President of Sodra Timber AB.

OTHER DIRECTORSHIPS

Chairman of Svets & Mekanogruppen AB, Aiab Energy AB and Pdb Datasystem AB. Board member of AnaMar AB and Alwex AB.

SHAREHOLDING IN LAMMHULTS DESIGN GROUP AB

5,000 Class A shares and 5,000 Class B shares.

Lotta Lundén

Board member since 2005. Born in 1957. Lives in Stockholm.Independent Board member vis-a-vis the company and company management; major shareholder in the company.


MBA. 20 years of experience in retailing. Posts include Business Area Manager at IKEA of Sweden and Commercial Director at IKEA Singapore. President of Guldfynd/Hallbergs Guld, General Manager of Coop Forum. Partner, Konceptverkstan.

OTHER DIRECTORSHIPS

Member of the Board of Bergendahls Food, Bergen-dahls Fashion, Swedol, Statoil Fuel and Retail, Twilfit, Axcel – Swedish Industrial Board, Svensk Form.


3,000 Class B shares.

Erika Lagerbielke

Board member since 2006.Born in 1960. Lives in Stockholm.Independent Board member vis-a-vis the company and company management; major shareholder in the company. Designer, own company. Professor of glass design, Linné University.


Industrial Design, University College of Arts, Crafts and Design in Stockholm, 1979–1983. Active as designer for Orrefors since 1982. Since 2009, own design company, Erika Lagerbielke & Co AB, with design, design develop-ment and lectures as its main business activities.

OTHER DIRECTORSHIPS

Chair of the Swedish Society of Crafts & Design.

OTHER ASSIGNMENTS

Member of the Consultation Committee of the Swedish Society of Crafts & Design, Heraldry Committee of the National Archives of Sweden, Foreningen Nyckelvikskolan and Smålands Akademi.


0 shares.


Board

Jerry Fredriksson

Board member since 2004. Born in 1942. Lives in Sävsjö.Owner and President of Canola AB and Radhuset AB. Also President of Investment AB Chiffonjén, Buss-gruppen Sverige AB and Lillekullen AB.


Business economist. Has previously worked in the furniture and food industries, with asset manage-ment, and as an auditor.

OTHER DIRECTORSHIPS

Chairman of KarlssonGruppen AB, IV Produkt AB, Sjöbysund AB and Investment AB Vitrinen. Board member of companies including Coromatic Group AB and Investment AB Chif-fonjén.


288,049 Class A shares and 112,000 Class B shares (including shares held indirectly through companies).

Yngve Conradsson

Board member since 2005.Born in 1943. Lives in Alvesta.Chairman of upholstered furniture company Scapa Inter AB and Beds By Scapa.


Together with Anders Hultman, developed furniture company Scapa into the biggest bed and upholstered furniture company in the Nordic region.

OTHER DIRECTORSHIPS

Scapa Capital AB.


367,570 Class A shares and 1,074,000 Class B shares through ownership of Scapa Capital AB.

Anders Pålsson

Board member since 2009.Born in 1958. Lives in Malmö. Independent Board member vis-a-vis the company and company management; major shareholder in the company.


MBA, Lund University25 years’ experience from international industrial companies. Posts include President/CEO of Hilding Anders and Divisional Manager of Trelle-borg AB and PLM/Rexam. Active in Gambro and the E.on Group (Sydkraft).

OTHER DIRECTORSHIPS

Board member at Hilding Anders AB, Nibe AB and Trioplast AB.


2,000 Class B shares.


Thomas Jansson

CFO of Lammhults Design Group since 2003 and employed in the Group since 1997. Born in 1968.


MBA. Previously employed as an economist at Volvo Articulated Haulers AB, 1993–1997, and as financial controller at Lammhults Möbel AB, 1997–2003.


0 shares and 5,000 warrants.

Sonnie Byrling

Business Area Manager of Lammhults Home since 2008 and employed by the Group since 2003. Born in 1961.


Marketing programme, Växjö University. Previously employed as marketing and product manager in the Ericsson Group, President of subsidiary in SYSteam Group, 1995–2003, and President of Scandinavian Eyewear, 2003–2008.


0 shares.

Åke Jansson

Business Area Manager of Lammhults Office since 2008 and employed in the Group since 2004. Born in 1962.


Construction engineer, graduate engineer, MBA. Previously employed as sales engineer and then marketing manager at Alcatel IKO Kabel AB, 1992–1998, President of Eldon Vasa AB, 1998–2003, and President of Fälth & Hässler AB, 2003–2004. President of Abstracta AB, 2004–2008 and President of Lammhults Möbel AB since November 2008 (after the merger of Abstracta AB/Lammhults Möbel AB).


0 shares.


Anders Rothstein

President and Chief Executive Officer of Lammhults Design Group since 2009. Born in 1964.


Executive MBA, Lund University. International executive with experience of work in listed compa-nies. His background includes a post as President & CEO of Human Care HC AB, and most recently as Vice President of Inwido AB (Ratosgruppen).

OTHER ASSIGNMENTS

Advisory board for Becker Acroma


500 Class B shares and 10,000 warrants.

Mikael Kjeldsen

Business Area Manager of Lammhults Library since 2010 and employed in the Group since 2002. Born in 1965.


Graduate Diploma in Business Administration and Accounting, Chief controller at Wittenborg Gruppen, CFO of Tresu A/S, CFO of BCI A/S.


0 shares.

Joakim Brobäck

Business Area Manager of Scandinavian Eyewear since 2008 and employed since 2008. Born in 1970.


MBA. Employed as product and product group manager at Thule Sweden AB, 1997–2000. Sales manager, marketing manager, marketing director and President of Marbodal AB/Nobia Swe-den, 2000–2008 (with a leave of absence in 2006). Also served as President of Martela AB in 2006.


0 shares and 10,000 warrants.

Sven Lindberg

Supply Chain Manager at Lammhults Design Group since 2010 and employed in the Group since 2010.Born in 1958.


Engineering degree from Chalmers University of Technology. Has a background as a senior executive in production, purchasing and product development. Factory manager and other roles at Nobel Plast AB, 1982–1994. Factory manager and production manager at Fagerhults Belysning AB, 1994–2003. Technical manager at Daloc AB, 2004–2006. Technical manager and Vice President at Inventech Europe AB, 2006–2009.


500 Class B shares.

Group management


FINANCIAL REPORT

6 1 REPORT OF THE BOARD OF DIRECTORS

65 CONSOLIDATED INCOME STATEMENT

65 CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

66 CONSOLIDATED STATEMENT OF

FINANCIAL POSITION

66 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

67 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

68 CONSOLIDATED STATEMENT OF CASH FLOWS

69 PARENT COMPANY INCOME STATEMENT

69 PLEDGED ASSETS AND CONTINGENT

LIABILITIES - PARENT COMPANY

69 PARENT COMPANY BALANCE SHEET

70 PARENT COMPANY’S PLEDGED ASSETS AND

CONTINGENT LIABILITIES

70 STATEMENT OF CHANGES IN PARENT COMPANY EQUITY

71 PARENT COMPANY CASH FLOW STATEMENT

72 NOTES

104 AUDITOR’S REPORT

NOTES

7 2 ACCOUNTING POLICIES

8 1 REVENUE ANALYSIS

8 1 OPERATING SEGMENTS

83 OTHER OPERATING INCOME

83 OTHER OPERATING EXPENSES

83 EMPLOYEES, PERSONNEL COSTS AND

REMUNERATION OF SENIOR EXECUTIVES

87 FEES AND REIMBURSEMENT OF COSTS

TO AUDITORS

87 OPERATING EXPENSES ALLOCATED BY

TYPE OF COST

87 NET FINANCE INCOME/COSTS

88 INCOME TAXES

89 BUSINESS COMBINATIONS

9 1 INTANGIBLE NON–CURRENT ASSETS

93 PROPERTY, PLANT AND EQUIPMENT

95 PARTICIPATIONS IN JOINT VENTURES

95 FINANCIAL INVESTMENTS

95 INVENTORIES

95 TRADE RECEIVABLES

95 CASH AND CASH EQUIVALENTS

96 EQUITY

96 EARNINGS PER SHARE

96 INTEREST–BEARING LIABILITIES

97 LIABILITIES TO CREDIT INSTITUTIONS

97 PENSIONS

97 OTHER PROVISIONS

97 ACCRUED EXPENSES AND DEFERRED INCOME

98 FINANCIAL RISKS AND FINANCIAL POLICIES

99 MEASUREMENT OF FINANCIAL ASSETS AND

LIABILITIES AT FAIR VALUE

100 OPERATIONAL LEASING

100 PLEDGED ASSETS AND CONTINGENT LIABILITIES

100 CLOSELY RELATED PARTIES

100 PARTICIPATIONS IN GROUP COMPANIES

102 CONSOLIDATED STATEMENT OF CASH FLOWS

102 IMPORTANT ESTIMATES AND ASSESSMENTS

103 INFORMATION ABOUT THE PARENT COMPANY


Report of the board of directors

The Board of Directors and the President of Lammhults Design Group AB, corporate registration number 556541-2094, hereby present their annual report and consolidated accounts for the period 1 January 2010–31 December 2010. Lammhults Design Group conducts its business activities in the form of a public limited company (Swedish: aktie-bolag (publ)). Its registered office is in the Municipality of Växjö, in Kronoberg County, Sweden. The Company’s address is: Box 75, SE-360 30 Lammhult, Sweden. This is Lammhults Design GroupServing a global clientele, Lammhults Design Group's business concept is to create positive experiences through modern inter-iors. Consumer insight, innovation, design management and strong brands are the foundations on which the Group's opera-tions are based. We develop products with several of the market’s leading designers. The Group's activities are conducted in two areas: design, development and sale of products for public environments and home interiors, as well as design, development and sale of spectacle frames. Operations are organised into four business areas: Lammhults Office, Lammhults Library, Lammhults Home and Scandinavian Eyewear. The Group is made up of the following wholly owned companies: Lammhults Möbel AB plus subsidiary Borks Patenttavler A/S, Lammhults Biblioteks-design AB (formerly Eurobib AB), Schulz Speyer Bibliothekstechnik AG plus subsidi-aries Schulz Benelux BVBA and Harmonie Projects Srl, Lammhults Biblioteksdesign A/S (formerly BCI/AS) plus subsidiaries Institut für Bibliotheks- Design GmbH (IFBD) and NBLC Systemen B.V, Lammhults Home AB (formerly Voice AB) plus subsidiary Ire Möbel AB, and Scandinavian Eyewear AB plus sub-sidiary Seven SRL. The Group also includes a number of foreign sales companies and dormant companies.

Significant events in 2010• On 21 January 2010, Schulz Speyer

Bibliothekstechnik AG acquired the library business of Harmonie Projects Srl, Schulz Speyer's dealer in Italy

• In June, Lammhults Biblioteksdesign A/S won several orders from the Middle East, to a total value of around SEK 13 million. Notable among these projects are an order from the National Library of Kuwait and one from Georgetown University in Qatar.

• Lammhults Home secured an order worth approximately SEK 2 million for the supply of both upholstered and storage furniture for North Africa.

• On 19 November, Lammhults Möbel AB acquired 100% of the shares in Borks Patenttavler A/S, a leading supplier of blackboards in Denmark.

• Scandinavian Eyewear launched the Pilgrim, Oscar Jacobson and Lexington brands on a broad front during the year, and a new licensing agreement was signed with Face Stockholm.

• As a result of deferred projects at Lamm-hults Library and a decision on an action plan to harmonise and streamline the product lines and to increase productivity in the organisation, a loss warning was issued. The action plan resulted in non-recurring costs of around SEK 10 million in the Library and Home business areas being charged to profit.

Financial summary for 2010The Group's net sales totalled SEK 778.0 million, a fall of 7% from the preceding year. Harmonie Projects, which was acquired in January, and Borks Patenttavler, which was acquired in late November, together contributed 3% growth. Excluding currency effects, net sales declined by 3%. The rise in the Swedish krona (SEK) against, above all, the EUR and DKK, affected net sales in the approximate amount of SEK -39 million.

The gross margin weakened to 39.0% from the preceding year’s 40.1%. The decline in the gross margin is attributable primarily to the charging of non-recurring inventory im-pairments, amounting in all to SEK 8 million, to the gross profits in the Library and Home business areas. However, negative currency effects were also a factor.

A number of cutbacks have been made since the second half of 2009. Thanks to these measures, selling and administrative

expenses were SEK 17.9 million lower than last year. The fourth quarter 2010 was charged with around SEK 2 million in costs arising from redundancies at Lammhults Library, in order to prepare for a more efficient organisation in the future. The companies acquired during the year led to selling and administrative expenses of SEK 7.3 million being charged. Had exchange rates been the same as in the preceding year, selling and administrative expenses would have been SEK 12.2 million higher. This indicates that selling and administrative expenses would have been SEK 13.0 million lower on a com-parable basis. Operating profit amounted to SEK 26.7 million (44.6), corresponding to an operating margin of 3.4% (5.3). As a result of changes in exchange rates, operating profit was approximately SEK 10 million lower than in the preceding year. The profit after financial items was SEK 24.2 million (38.9). The profit after tax totalled SEK 13.9 million (27.2). This produced earnings per share of SEK 1.65 (3.22). The Group's financial position remains strong. The equity/assets ratio was 49.6% (52.4) at year-end, and the debt/equity ratio was 0.56 (0.47). Our financial position there-fore continues to allow scope for acquisitions without deviation from the Group’s goals for equity/assets ratio (no less than 35%) and debt/equity ratio (range of 0.7–1.0). Cash flows from operating activities amounted to SEK 29.8 million (33.4) in 2010 and cash flow for the year to SEK 3.9 million (-1.6). Cash and cash equivalents amounted to SEK 73.4 million (70.2) at year-end. The Group's un-used credit facilities including cash and cash equivalents totalled SEK 104.9 million (120.4). Value-added brand strategyWhen the decision to introduce a brand-led strategy was taken in 2008, the intention was that the Group should move from a holding company type of structure to a more integ-rated industrial group focusing on interiors and spectacle frames. With clearer branding, we are better able to achieve sustainable, profitable growth, thereby increasing share-holder value. In the past two years, the brand


strategy has been refined to maximise im-pact from the work on branding in the Group. The Lammhults Design Group has adopted its own graphical identity, which creates clar-ity both in-house and among our customers. It enables our already strong and well-estab-lished brands – Lammhults, Abstracta, Borks, Voice, Ire, Skaga, Eurobib Direct, Schulz Sp-eyer and BCI – to retain their individual char-

countries led to cutbacks. These affected the Group mainly through postponement or can-cellation of library projects. Spain, Italy and France are among the markets of importance to us where sales were affected in a negative way. To adapt the Group’s operations to the weaker market, it was therefore decided to implement cost cutbacks. Another factor that affected the Group’s operations was

the rise in the Swedish krona (SEK) against, above all, the EUR and DKK, which affected net sales in the approximate amount of SEK -39 million.

Sales to markets outside Sweden in-creased from 64% till 65% during the year. The companies acquired, Harmonie Projects and Borks Patenttavler, boosted the share of sales to markets outside Sweden, as did Scandinavian Eyewear’s successes in North America. Order bookings at year-end were 2% lower than in the preceding year, at SEK 103.4 million (105.5). Net of currency effects, order bookings were just over SEK 6 million higher than on 31 December 2009.

MARKET DEVELOPMENTS – BUSINESS AREAS Lammhults OfficeThe business area develops, markets and sells interiors for public environments under the brands of Lammhults, Abstracta and Borks. In November 2010, the business area expanded via Lammhults Möbel AB’s acquisition of Borks Patenttavler A/S, a lead-ing supplier of blackboards in Denmark. Net sales totalled SEK 287.7 million, up from SEK 283.3 million a year earlier. Sales in Sweden developed healthily during the year, with an increase of 8%. In contrast, sales to Norway and Denmark slowed in the wake of gener-ally weak demand in these markets. Of other export markets, sales increased most in the UK and Germany. The top-selling product families during the year were Spira and Cam-pus chairs, designed by Johannes Foersom and Peter Hiort-Lorenzen, and the Softline line of screens. The gross margin improved over the year, thanks to an attractive product mix and more efficient purchasing routines. As a result of cost cutbacks made, overheads during the year were around SEK 4 million lower than a year earlier. The operating profit totalled SEK 32.8 million (25.6) and the operating margin was 11.4% (9.0). Lammhults LibraryThe business area develops and sells library interiors for public sector consumption under the Eurobib Direct, BCI and Schulz Speyer brands. In January 2010, the business area expanded via Schulz Speyer Bibliothekstech-nik AG’s acquisition of the library business of Harmonie Projects Srl, Schulz Speyer's dealer in Italy. Net sales totalled SEK 318.2 million, down from SEK 365.0 million a year earlier. The fall in net sales is partly explained by negative currency effects totalling around

GROUP FINANCIAL HIGHLIGHTS

GROUP 2006 2007 2008 2009 2010Net sales, SEK m. 815.9 829.2 901.2 840.8 778.0Operating profit, SEK m. 84.8 73.3 85.5 44.6 26.7 Operating margin, % 10.4 8.8 9.5 5.3 3.4Capital employed, SEK m. 462.6 483.0 577.9 581.5 578.0Return on capital employed, % 19.0 15.0 16.6 8.0 4.7Return on capital, % 17.9 12.6 14.2 6.9 3.6Equity/assets ratio, % 51.9 52.1 50.0 52.4 49.6Debt/equity ratio, multiple 0.43 0.40 0.46 0.47 0.56Investments in property, plant and equipment, SEK m. 17.3 12.5 27.6 17.3 7.3Average number of employees 371 363 400 410 394 Dividend payout ratio, % 47 60 40 47 61

acteristics while at the same time benefiting from an endorsement process that denotes them “Part of Lammhults Design Group”. This underpins the Group’s ability to use the various brands in a collection-inspired way. At the same time, work continues on maximising synergies in purchasing, production, marketing and sales.

The market in 2010The market climate was affected by the weak- ness in the economy and the continued instability in the financial markets. The financial crisis was of such an exceptional nature that it eliminated to a major degree the economic fluctuations with which we are familiar. Lammhults Design Group is, of course, not totally impervious to ups and downs in the economy, but compared to other interiors-based businesses we have in the past benefited greatly from the fact that our operations are normally in phase with differ-ent stages of the economic cycle. In addition, investments in public sector activities, such as libraries, increase in difficult times because central government and municipalities recog-nise the need for measures to stimulate the economy. However, in 2010 the major deficits in the public finances of many European

22

48

30

%

%

%

PRIVATE CONSUMPTION

PUBLIC SECTOR CONSUMPTION

BUSINESS SECTOR CONSUMPTION

Distribution of net sales


SEK 26 million, as well as the impact of public sector cuts on library projects in several countries in southern Europe. Sales increased to the UK, Sweden and Italy (through the acquisition of Harmonie), but declined to Germany, Spain, France and Denmark. Aftermarket sales totalled around SEK 44 million, about the same as in the preceding year. Order bookings for the business area at year-end were 10% higher than at the pre-ceding year-end. The gross margin declined, compared with the figure for the previous year. This was partly because of lower sales volumes, but also pressure on prices in southern Europe and non-recurring inventory impairments of around SEK 4 million in order to harmonise and streamline product lines. Operating profit weakened from SEK 35.7 million to SEK 13.8 million and the business area’s operating margin was 4.3% (9.8). Profit/loss for the year was charged with around SEK 6 million in non-recurring costs arising from inventory impairments and redundancies to prepare for a more efficient organisation in the future. Lammhults HomeThe business area develops and markets home interior products - storage furniture sold under the Voice brand and upholstered furniture under the Ire brand. Net sales totalled SEK 73.4 million, down from SEK 93.3 million a year earlier. Of net sales for the year, storage furniture accounted for around SEK 41 million (54) and upholstered furniture for around SEK 32 million (39). Sales in the Swedish market were around SEK 12 million down on sales in the preceding year. Of the decline, the major share is attributable to the fact that in 2009 the business area supplied hotel interior projects in Sweden valued at around SEK 10 million. Excluding these projects, sales in Sweden were down around SEK 2 million because of weak demand in the premium segments of the furniture market in home interiors in Sweden. Exports were around SEK 8 million lower than in the pre-ceding year. The major losses were recorded in Norway, the UK, Denmark and the Nether-lands, while sales to Germany rose slightly. The gross margin declined, compared with the preceding year, as a result of the lower volume of sales, negative currency effects and non-recurring inventory impairments of around SEK 4 million in order to streamline the product range. An operating loss of SEK -9.0 million was recorded , compared to an

operating profit of SEK 3,7 million the previ-ous year. An action programme was initiated to develop market penetration and improve profitability. Scandinavian EyewearThe business area designs, develops and sells spectacle frames under the brands of Skaga, Efva Attling and Oscar Magnuson. The brand portfolio was expanded through licensing agreements signed with the three brands, Lexington, Pilgrim and Oscar Jacob-son. Net sales totalled SEK 104.6 million, compared with SEK 104.8 million a year earlier. In the most important markets for the business area, sales rose during the year to North America and the Nordic region exclud-ing Sweden, but fell in Sweden, the UK and Poland. Low-price operators gained market shares in Sweden’s optical products market. However, Scandinavian Eyewear largely maintained its market share in Sweden, by strongly developing its Oscar Magnuson and Efva Attling brands. Sales of the new Pilgrim, Lexington and Oscar Jacobson brands progressed satisfactorily. The gross margin improved compared to the preceding year. This is partly because purchasing of parts of the product range was moved from Italy to China. As a result of cost cutbacks made, overheads during the year were around SEK 4 million lower than a year earlier. Thanks to a successful restructuring project, the opera-ting profit totalled SEK 3.7 million (-5.9) and the operating margin 3.5 % (-5.6).

Parent CompanyThe Parent Company's business activities span Group management and certain Group-wide functions. Net sales totalled SEK 6.0 million (6.4), and a profit of SEK 10.9 million (-12.0) after financial items was recorded. Profit/loss for the year after financial items was affected by an intra-Group dividend of SEK 19.1 million (0.0). Parent Company investments totalled SEK 0.0 million (0.1). Cash and cash equivalents, including unused overdraft facilities, on 31 December 2010 totalled SEK 46.8 million (49.7).

Investments and depreciationIn 2010, The Group's investments in produc-tion and IT equipment, including work in progress, amounted to SEK 7.0 million (11.0); investments in land and buildings totalled SEK 0.3 million (6.3). Total depreciation according to plan during the year was SEK 14.5 m. (16.1).

Development workProduct development, in house and in partnership with customers, is an important part of the Group's operations. The Group's products are to be characterised by creativity and high design values, drawing on the expertise of designers both in and outside the organisation. The main focus is capital goods and consumer durables for public environments, homes and offices. Product development shall be driven by creativity and design, in combination with other essential factors such as production sustainability, functionality, quality, environment and price. The costs associated with this process are not normally such that they meet the criteria for reporting as an asset, but instead are accounted for as administration costs in the consolidated income statement; see Note 5. During the year, development costs totalling SEK 0.3 million (0.4) were capitalised.

Risks and uncertainty factorsThe significant risk and uncertainty factors faced by Lammhults Design Group include business risks in the form of high exposure to certain sectors. The Group is also exposed to a number of financial risks. Chief among these are currency risks relating to fluctu-ations in exchange rates in conjunction with exports and imports, interest risks in connec-tion with liquidity and debt management, and credit risks in connection with sales. The Group's sales are above all conducted in SEK, EUR, DKK and NOK while purchases are mainly made in SEK, EUR, USD and DKK. In addition, the Group is to a certain degree exposed to commodities risk. The Group's policies and guidelines for management of financial risks have been prepared by the Board of Directors and constitute a frame-work for its financial operations. The responsibility for the Group's financial transactions and risks is managed centrally by the Group's management team. The over-all objective is to provide cost-efficient financing and to minimise negative impact on the Group's results through market fluc-tuations. Financial risks, risk management and financial policies are described in more detail in Note 26.

Financials goals and expectations for the futureThe financial goals of Lammhults Design Group over a business cycle are: • Growth of at least 15% per year.


• An operating margin of at least 10% per year.• Return on capital employed of at least 20%.• An equity/assets ratio of at least 35%.• A debt/equity ratio of between 0.7 and 1.0.• While maintaining a focus on the Group's

long-term capital requirements, the dividend paid shall correspond to around 40% of profit after tax.

As a result of the financial instability, a stronger Swedish krona and non-recurring costs, growth and profitability weakened dur-ing the year. However, the Group's financial position is strong, which creates the potential for growth, both organic and via acquisitions. A focused export drive, product and concept development, efficiency improvements in purchasing and production and maximising synergies will be prioritised and value-enhan-cing activities in 2011. Uncertainty continues to surround economic developments in southern Europe. On the other hand, the outlook in the Group’s two most important markets, Sweden and Germany, looks bright.

Environmental activities within the GroupWhile developing, manufacturing and mar-keting safe products of the highest quality that satisfy the demands of the market, Lammhults Design Group is required to maintain a close focus on environmental factors. Every company in the Group has adopted an environmental policy aligned with the Group-wide policy adopted by the Board of Directors of the Parent Company. The operations of Lammhults Möbel AB and Lammhults Biblioteksdesign AB are already certified under ISO 14001. During the year, Ire Möbel AB was also certified under ISO 14001. None of the Group's companies is engaged in operations that in themselves may be classified as especially hazardous to the environment, and so no obligation to notify the authorities, or to seek licensing, under the Swedish Environmental Code applies.

Human resourcesOperations within the Group are required as far as possible to make best use of the skills and experience being built up in the Parent Company and the business areas. Knowledge transfer in product development, marketing, distribution and export sales, as well as purchases from low-cost countries, form a central plank for the Group’s strategic development. Lammhults Design Group strives to develop good work environments and to offer work duties that encourage

personal development on the part of the Group's employees. At year-end, the average number of employees was 394 (410). Of the total number of employees in the Group, 42% (42) were women. The costs of wages, salaries and other remuneration amounted to SEK 165.3 million (172.8).

Guidelines for remuneration of senior executivesFees are paid to the Chairman and Board members in accordance with decision of the AGM. In addition, the 2010 AGM resolved that remuneration for work of the audit and remuneration committees shall be paid in an amount not exceeding SEK 100 th. (0), to be distributed as per decision of the Board. On behalf of the management, the AGM has adopted the following guidelines for the remuneration of senior executives: Wages, salaries and other employment conditions for the President and other senior executives shall be in line with the market and competitive, to enable competent and skilled personnel to be recruited, motivated and retained. The Group's senior executives, comprising in all seven persons who make up Group management, have agreements on variable remuneration over and above a fixed salary. The size of the variable remuneration is linked to predetermined objectives based on individually set goals and the Group's results, or the results of the particular business area. The variable remuneration for senior exec-utives may total no more than four monthly salary payments per annum. There should also be scope for long-term share-based or share-price-based incentive programmes.

On termination of an employment contract by the Company with regard to the President and other senior executives, compensation shall be paid in an amount corresponding to no more than 18 months’ pay. The total compensation shall not exceed the compensation that would have been paid if represented by a period of notice of six months and severance pay equal to no more than 12 months' fixed salary.

Agreements on pension benefits shall be entered into individually. For the President, an annual pension premium amounting to ten times Sweden’s ‘Base Amount’ (Swedish: prisbasbelopp) shall be paid. For other senior executives, pension costs shall amount to a maximum of 25% of the fixed and variable salary. The terms and conditions of pensions shall be based on defined-contribution pension schemes. The retirement age shall be 65 years.

No major changes to the guidelines for

remuneration of senior executives are pro-posed for the period until the next AGM.

Corporate GovernanceThe company is governed by the Annual General Meeting, Board of Directors and President under the provisions of the Swedish Companies Act and the Company’s Articles of Association, along with Nasdaq OMX Stockholm's rules for issuers, including the Swedish Code of Corporate Governance. The work of the Board of Directors of Lammhults Design Group is governed by the rules of procedure annually adopted by the statutory Board meeting. A total of six Board meetings were held in 2010. The Board has also ap-pointed an audit committee and a remunera-tion committee that study and prepare the Board's decisions regarding important issues in the respective areas. More information on the work of the Board, corporate governance and the Group’s systems of internal control and risk management is provided in the corporate governance report.

OwnershipThe total number of shares outstanding in Lammhults Design Group is 8,448,104, rep-resented by 1,103,798 class A shares, each car-rying 10 votes, and 7,344,306 class B shares, each carrying one vote. Scapa Capital AB owns shares representing 25.8% of the votes, while Canola AB owns shares representing 16.3% of the votes. According to Chapter 6, Section 2of the Swedish Annual Reports Act, listed companies must disclose details of certain circumstances that could affect the possibility of the Company being taken over via a public offer to acquire shares in the Company. No such circumstances exist in connection with Lammhults Design Group AB.

Proposed allocation of profitThe Board of Directors proposes that the profit available for distribution, SEK 140,783,382, be allocated as follows: Divi-dend to the shareholders: SEK 1.00 per share (1.50). The total dividend payment amounts to SEK 8,448,104 (12,672,156). To be carried forward: SEK 132,335,278.

Annual General MeetingThe Annual General Meeting (AGM) will be held in Lammhult on 28 April 2011. As in the preceding year, the Board of Directors will propose that the AGM should approve a new share issue, comprising eight hundred thousand class B shares, to finance future acquisitions.


Amounts in SEK m. Note 2010 2009Net sales 2, 3 778.0 840.8 Cost of goods sold –474.4 –503.4Gross profit 303.6 337.4 Other operating income 4 7.5 9.5Cost of sales –181.8 –198.6Administrative expenses –92.5 –93.6Other operating costs 5 –10.1 –10.1Operating profit 3, 6, 7, 8, 13, 28 26.7 44.6 Financial income 0.8 2.0Finance costs –3.3 –7.7Net finance income/costs 9 –2.5 –5.7 Profit before tax 24.2 38.9 Tax 10 –10.3 –11.7Profit for the year 13.9 27.2 Earnings per share, SEK (no dilution) 20 1.65 3.22 Proposed dividend per share, SEK 19 1.00 1.50

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Amounts in SEK m. Note 2010 2009Profit for the year 13.9 27.2

Other comprehensive incomeDifferences arising from the translation of foreign operations’ accounts –28.0 –8.4Change in fair value of cash flow hedges 1.0 1.7Other comprehensive income for the year –27.0 –6.7

Comprehensive income for the year –13.1 20.5

Profit, comprehensive income and shareholders’ equity are attributable in their entirety to the owners of the Parent Company, as there are no non-controlling interests.

CONSOLIDATED INCOME STATEMENT


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Amounts in SEK m. Note 31/12/2010 31/12/2009ASSETS Intangible non-current assets 11, 12 191.8 195.1Property, plant and equipment 13 144.8 140.6Financial investments 15 3.9 4.1 Non-current receivables 0.0 0.1Deferred income tax assets 10 1.2 1.0Total non-current assets 341.7 340.9 Inventories 16 144.1 147.8Taxes recoverable 10 12.5 10.2Accounts receivable 17 147.3 165.0Other receivables 11.5 9.1Prepaid expenses and accrued income 13.6 11.4Cash and cash equivalents 18 73.4 70.2Total current assets 402.4 413.7TOTAL ASSETS 744.1 754.6 EQUITY 19 Share capital 84.5 84.5Other contributed capital 41.2 41.2Reserves –7.6 19.4Retained earnings including profit/loss for the year 251.2 250.0Total shareholders’ equity 369.3 395.1 LIABILITIES Non-current interest-bearing liabilities 21, 26 88.8 92.5Other non-current liabilities 0.2 0.2Provisions for pensions 23 5.3 4.5Other provisions 24 5.4 4.1Deferred tax liabilities 10 11.5 7.2Total long-term liabilities 111.2 108.5 Current interest-bearing liabilities 21, 26 119.8 93.9Advance payments from customers 4.0 5.8Trade payables 61.4 58.4Income tax liabilities 10 3.8 10.8Other liabilities 41.4 37.8Accrued expenses and deferred income 25 33.2 44.3Total current liabilities 263.6 251.0Total liabilities 374.8 359.5TOTAL EQUITY AND LIABILITIES 744.1 754.6

See Note 29 for more information on the Group’s pledged assets and contingent liabilities.


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Other Retained contributed Hedging Translation profit incl. TotalAmounts in SEK m. Share capital capital reserve reserve profit/loss for the year equityOpening balance, equity 01/01/09 84.5 41.2 –1.9 28.0 243.7 395.5Comprehensive income for the year:Profit for the year 0.0 0.0 0.0 0.0 27.2 27.2Other comprehensive income for the year 0.0 0.0 1.7 –8.4 0.0 –6.7Comprehensive income for the year 0.0 0.0 1.7 –8.4 27.2 20.5Dividend paid 0.0 0.0 0.0 0.0 –21.1 –21.1Warrant programme, premiums paid in 0.0 0.0 0.0 0.0 0.2 0.2Closing balance, equity 31/12/09 84.5 41.2 -0.2 19.6 250.0 395.1 Opening balance, equity 01/01/10 84.5 41.2 -0.2 19.6 250.0 395.1Comprehensive income for the year:Profit for the year 0.0 0.0 0.0 0.0 13.9 13.9Other comprehensive income for the year 0.0 0.0 1.0 –28.0 0.0 –27.0Comprehensive income for the year 0.0 0.0 1.0 –28.0 13.9 –13.1Dividend paid 0.0 0.0 0.0 0.0 –12.7 –12.7Closing balance, equity 31/12/10 84.5 41.2 0.8 –8.4 251.2 369.3


CONSOLIDATED STATEMENT OF CASH FLOWS

Amounts in SEK m. Note 2010 2009 32 CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 24.2 38.9Adjustment for non-cash items 7.4 11.2Income tax paid –16.1 –34.0Cash flows from current operations before changes in working capital 15.5 16.1 Cash flows from changes in working capital Change in inventories1 12.4 16.7Change in operating receivables1 19.1 26.4Change in operating liabilities2 –17.2 –25.8Cash flows from operating activities 29.8 33.4 INVESTING ACTIVITIES Purchases of property, plant and equipment –7.3 –17.3Disposal of property, plant and equipment 1.0 0.5Purchases of non-current intangible assets –0.5 –0.4Purchases of subsidiaries, net impact on liquidity –22.8 –7.3Investments in financial assets –0.3 0.0Cash flows from investing activities –29.9 –24.5 FINANCING ACTIVITIES Premiums received for subscription warrants - 0.2Borrowings 64.0 37.7Repayments of loans –47.3 –27.3Dividend paid –12.7 –21.1Cash flows from financing activities 4.0 –10.5 Cash flows for the year 3.9 –1.6Cash and cash equivalents at beginning of year 70.2 72.8Translation difference in cash and cash equivalents –0.7 –1.0Cash and cash equivalents at year-end 73.4 70.2

1 Increase (–) / decrease (+) 2 Increase (+) / decrease (–)


PARENT COMPANY INCOME STATEMENT

PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME

PARENT COMPANY BALANCE SHEET

Amounts in SEK m. Note 2010 2009Net sales 2, 3 6.0 6.4Gross profit 6.0 6.4 Administrative expenses –14.5 –14.4Operating loss 6, 7, 13, 28 –8.5 –8.0 Result from financial items 9 Profit from participations in Group companies 19.1 -Other interest income 1.3 1.6Interest expense –1.0 –5.6Profit/loss after financial items 10.9 –12.0 Tax 10 2.2 2.9Profit for the year 13.1 –9.1

Amounts in SEK m. Note 2010 2009Profit for the year 13.1 –9.1 Other comprehensive income Differences arising from the translation of foreign operations’ accounts - 0.8Other comprehensive income for the year - 0.8 Comprehensive income for the year 13.1 –8.3

Amounts in SEK m. Note 31/12/2010 31/12/2009NON-CURRENT ASSETS Property, plant and equipment 13 0.2 0.4

Financial non-current assets Participations in Group companies 11, 31 349.7 349.7Total non-current financial assets 349.7 349.7Total non-current assets 349.9 350.1 CURRENT ASSETS Current receivables Receivables from Group companies 154.9 138.7Taxes recoverable 3.4 -Other receivables 0.1 0.1 Prepaid expenses and accrued income 0.6 0.8Total current receivables 159.0 139.6 Cash in hand and on deposit 18 26.3 9.9Total current assets 185.3 149.5TOTAL ASSETS 535.2 499.6 EQUITY 19 Restricted equity Share capital (1,103,798 class A shares, each carrying ten votes, and 7,344,306 class B shares, each carrying one vote) 84.5 84.5Statutory reserve 41.2 41.2 Unrestricted equity Fair value reserve –1.1 –1.1Retained profit 128.8 141.1Profit for the year 13.1 –9.1Total shareholders’ equity 266.5 256.6 NON-CURRENT LIABILITIES Liabilities to credit institutions 22 12.4 25.6Total long-term liabilities 12.4 25.6 CURRENT LIABILITIES Liabilities to credit institutions 22 104.8 79.6Trade payables 0.7 0.7Liabilities to Group companies 146.7 125.0Current tax liabilities - 7.7Other liabilities 0.1 0.1Accrued expenses and deferred income 25 4.0 4.3Total current liabilities 256.3 217.4TOTAL EQUITY AND LIABILITIES 535.2 499.6


PARENT COMPANY PLEDGED ASSETS AND CONTINGENT LIABILITIES

Amounts in SEK m. Note 2010 2009Pledged assets 29 203.6 203.6Contingent liabilities 29 3.6 3.8

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

Fair value reserve Share Statutory Translation Retained Profit/loss TotalAmounts in SEK m. capital reserve reserve profit for year equityOpening balance, equity 01/01/09 84.5 41.2 –1.9 159.5 –10.0 273.3Transfer of profit/loss for preceding year 0.0 0.0 0.0 –10.0 10.0 0.0Group contributions received 0.0 0.0 0.0 12.7 0.0 12.7Comprehensive income for the year:Profit for the year 0.0 0.0 0.0 0.0 –9.1 -9.1Other comprehensive income for the year 0.0 0.0 0.8 0.0 0.0 0.8Comprehensive income for the year 0.0 0.0 0.8 0.0 –9.1 –8.3Dividend paid 0.0 0.0 0.0 –21.1 0.0 –21.1Closing balance, equity 31/12/09 84.5 41.2 -1.1 141.1 –9.1 256.6 Opening balance, equity 01/01/10 84.5 41.2 -1.1 141.1 –9.1 256.6Transfer of profit/loss for preceding year 0.0 0.0 0.0 –9.1 9.1 0.0Group contributions received 0.0 0.0 0.0 9.5 0.0 9.5Comprehensive income for the year:Profit for the year 0.0 0.0 0.0 0.0 13.1 13.1Other comprehensive income for the year 0.0 0.0 0.0 0.0 0.0 0.0Comprehensive income for the year 0.0 0.0 0.0 0.0 13.1 13.1 Dividend paid 0.0 0.0 0.0 –12.7 0.0 –12.7Closing balance, equity 31/12/10 84.5 41.2 –1.1 128.8 13.1 266.5


PARENT COMPANY CASH FLOW STATEMENT

Amounts in SEK m. Note 2010 2009 32CASH FLOWS FROM OPERATING ACTIVITIES Profit/loss after financial items 10.9 –12.0Adjustment for non-cash items –16.9 1.6Income tax paid –12.2 –12.7Cash flows from current operations before changes in working capital –18.2 –23.1

Cash flows from changes in working capital Change in operating receivables1 –12.5 –49.9Change in operating liabilities2 13.5 42.8Cash flows from operating activities 1.0 –30.2

INVESTING ACTIVITIES Purchases of property, plant and equipment - –0.1Disposal of property, plant and equipment 0.1 -Cash flows from investing activities 0.1 –0.1

FINANCING ACTIVITIES Borrowings 48.6 32.1Repayments of loans –38.8 –19.6Dividend paid –12.7 –21.1Dividend received 19.1 -Group contributions received 25.0 45.0Group contributions paid –7.7 –2.5Cash flows from financing activities 33.5 33.9

Cash flows for the year 16.4 3.6Cash and cash equivalents at beginning of year 9.9 6.3Cash and cash equivalents at year-end 26.3 9.9

1 Increase (–) / decrease (+) 2 Increase (+) / decrease (–)


NOTE 1. ACCOUNTING POLICIES

Amounts in SEK million (SEK m.) unless otherwise indicated. COMPLIANCE WITH STANDARDS AND LEGISLATIONThe consolidated financial statements have been prepared in ac-cordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), as approved by the EU. In addition, the Swedish Financial Reporting Board's Recommendation RFR 1 concerning supplementary accounting rules for Groups has been applied.

The Parent Company applies the same accounting policies as the Group, other than in the cases set out below in the section “Parent Company’s Accounting Policies”. The variances that exist between the policies of the Parent Company and the Group arise from lim-itations in the ability to apply IFRS in the Parent Company that fol-low from the Swedish Annual Accounts Act and the Swedish Pension Obligations Vesting Act ("Tryggandelagen"), and in certain cases tax considerations.

On 14 March 2011, the Board of Directors and the President ap-proved the annual accounts and the consolidated financial state-ments for publication. The consolidated income statement, con-solidated statement of comprehensive income and consolidated statement of financial position, together with the Parent Company’s income statement, statement of comprehensive income and balance sheet will be presented for adoption by the Annual General Meeting of Shareholders, to be held on 28 April 2011.

PRINCIPLES OF VALUATION APPLIED IN PREPARATION OF THE FINANCIAL STATEMENTSAssets and liabilities are reported at their historic acquisition value, except for certain financial assets and liabilities, which are account-ed for at fair value. Financial assets and liabilities that are measured at fair value consist mainly of derivative instruments. Non-current assets and disposal groups that are held for sale are reported, with certain exceptions, at the lower of previous carrying amount and the fair value less cost-to-sell.

FUNCTIONAL CURRENCY AND REPORTING CURRENCYThe Parent Company's functional currency is the Swedish krona (SEK), which is also the reporting currency for the Parent Company and the Group. The financial statements are thus presented in Swedish kronor. All amounts are rounded off to SEK million, unless otherwise stated.

JUDGEMENTS AND ESTIMATES IN THE FINANCIAL STATEMENTSThe preparation of financial statements in conformity with IFRS re-quires the company management to make judgements, estimates and assumptions that affect the application of the accounting pol-icies and the amounts reported for assets, liabilities, revenues and expenses. The actual outcome may differ from these estimates and judgements. The estimates and assumptions are reviewed on a reg-ular basis. Changes in estimates are accounted for in the period in which the change takes place if the change affects only that period, or in the period in which the change takes place and future periods

if the change affects both the current period and future periods. Judgements made by the company's management on application of IFRS that have significant impact on the financial statements and esti-mates made that may require major adjustments to the financial state-ments of the following year are described in greater detail in Note 33. SIGNIFICANT ACCOUNTING POLICIES APPLIEDThe accounting policies set out below have, with the exceptions described in greater detail, been applied consistently to all periods presented in the Group's financial reports. Furthermore, the Group's accounting policies have been applied consistently by the Group's companies.

REVISED ACCOUNTING POLICIES The following describes the changes in accounting policies that the Group is applying with effect from 1 January 2010. Other amend-ments of IFRS valid from the beginning of 2010 have not affected the Group’s financial reporting in any material way:

Business combinations and consolidated financial statementsThe Group has applied the revised IFRS 3 Business Combinations and amended IAS 27 Consolidated and Separate Financial Statements as of 1 January 2010. The main effects of the changes in accounting policies are as follows: The definition of business has been changed, transaction costs in business combinations are to be expensed, con-ditional purchase considerations are determined at fair value at the date of acquisition, and effects of revaluation of liabilities relating to conditional purchase considerations are to be recognised as items of income or expense in profit/loss for the year. Other new issues are that there are two options for recognising non-controlling inter-ests and goodwill, either at fair value, in other words goodwill is in-cluded in non-controlling interests, or alternatively non-controlling interests are represented as a share of net assets. A choice between the two treatments is made on a case-by-case basis for each acquisi-tion. In addition, further acquisitions made after the controlling in-terest is obtained are regarded as ownership transactions and re-cognised directly in equity. This represents a change in the former policy, which was to recognise any surplus amount as goodwill.

The changes in policies have not had any retroactive impact on the Company’s financial reports, and thus no amounts have been adjust-ed in the financial reports. The amendments to the standards have resulted in some changes to disclosure requirements, which has im-pacted on Note 11 for the current year.

Presentation of the financial statementsIn the IASB’s “Annual Improvements Process”, which was published in May 2010, the requirements stated in IAS 1 Presentation of Finan-cial Statementsregarding the structure of the Statement of Changes in Equity. The Company has elected for early adoption of these amendments, with effect from its 2010 annual accounts. Under the amendments, the reconciliation in the statement of changes in equity to the year’s change in each component of equity, such as the re-serves for accumulated other comprehensive income, is not required to specify every item in other comprehensive income. As permitted under this amendment, the Company has elected to provide disclosures with a detailed reconciliation of its reserves and other compo-


nents of equity in a note to the financial statements, rather than in the statement of changes in equity. A detailed reconciliation was also provided in a note in the 2009 annual accounts, but appears to be required in the statement of changes in equity according to the version of IAS 1 that was to apply to 2010, in the absence of the aforementioned early adoption. However, in accordance with the wording of the amended IAS 1, the former line for comprehensive income for the year in the statement of changes in equity has been split into profit/loss for the year and other comprehensive income for the year. The change in presentation is applied to the current year and the year shown for comparison. The changes have not res-ulted in any adjustment of amounts stated in the financial reports.

Recognition and measurement of items that may be used for hedge accountingAmendments to IAS 39 Financial Instruments: Recognition and Meas-urement deals with “items that may be used for hedge accounting” and clarifies implementation of the principles for hedge accounting of cash flow hedging for highly probable forecast transactions involv- ing a call option, and clarifies the possibilities that exist for hedging identifiable components in a hedged item. The change shall be applied to financial years after 30 June 2009, with retroactive effect.

Hedges of a net investment in a foreign operationIFRIC 16 Hedges of a Net Investment in a Foreign Operation clarifies, for example, that only the risk in the functional currencies of the par-ent company and the foreign operation concerned may be hedged. The interpretation also addresses the issue of where in the group the hedging instrument may be held if hedge accounting is used and if the method of consolidation affects the amount that is reclas-sified to profit/loss for the year, i.e. step-by-step or direct consolida-tion. The interpretation is applied prospectively to financial years starting on 1 July 2009 or later.

NEW IFRS NOT YET IMPLEMENTEDA number of new or revised IFRS will come into effect for the first time in the next few financial years and have not been adopted early in the preparation of these financial statements. There are no plans for early adoption of new or revised provisions that are for applica-tion in future financial years.

It is envisaged that IFRS 9 Financial Instruments will supersede IAS 39 Financial Instruments: Recognition and Measurement no later than from the beginning of 2013. IASB has published the first of at least three parts that together will make up IFRS 9. This part deals with the classification and measurement of financial assets. The categor ies of financial assets allowed in IAS 39 are replaced by two categories in which the assets are measured at fair value or accumulat-ed acquisition value. Accumulated acquisition value is used for in-struments held in a business model whose objective is to collect the contractual cash flows; these must consist of payments of capital amounts and interest on capital amounts on specified dates. Other financial assets are recognised at fair value and the ability to apply the “fair value option” as in IAS 39 is retained. Changes in fair value are to be recognised in the profit or loss, with the exception of changes in value of equity instruments not available for sale and for which the entity has elected to report value changes in other

comprehensive income. Value changes in derivatives in hedge ac-counting are not affected by this aspect of IFRS 9. Until further no-tice, they are recognised in accordance with IAS 39. The Company has not decided whether the new principles will be adopted early or from the beginning of 2013.

The following amended accounting policies for application in fu-ture financial years are not expected to have any impact on the Group’s financial reporting:– IAS 24 Related Party Disclosures above all with regard to disclos-

ure for government-related entities, but also with regard to the definition of related parties

– Amendments to IAS 32 Financial Instruments: Classification of new share issues

– Amendments to IFRS 7 Financial Instruments: Information on new disclosure requirements for financial assets that are derecog-nised in their entirety or in part.

– Amendments to IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction, with regard to prepayments intended to cover minimum funding requirements

– IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments– Annual improvements to IFRS that are not yet applicable, above

all among those published in May 2010

CLASSIFICATION ETC.Non-current assets and non-current liabilities essentially consist of amounts that are expected to be recovered or paid after more than twelve months from the balance sheet date. Current assets and cur-rent liabilities essentially consist of amounts that are expected to be recovered or paid within twelve months of the balance sheet date. Where a balance sheet item includes an amount that is expected to be recovered or paid both within or after twelve months from the balance sheet date, the relevant information is provided in a note on the balance sheet item concerned. OPERATING SEGMENT REPORTINGAn operating segment is a part of the Group that conducts activities from which it can generate income and incur costs and for which separate financial information is available. An operating segment's profit or loss is, furthermore, followed up by the Company's topmost executive decision-makers to evaluate the results and to enable re-sources to be allocated to the operating segment.

PRINCIPLES OF CONSOLIDATIONSubsidiariesSubsidiaries are companies over which Lammhults Design Group AB exercises a controlling influence. A controlling influence con-sists of a direct or indirect right to determine the financial and op-erational strategies of the company in order to obtain economic benefits. In establishing whether a controlling influence exists, shares with potential voting rights that may be used or converted without delay are considered.

Acquisitions on 1 January 2010 or laterSubsidiaries are reported using the acquisition method of accounting. Under this method, the acquisition of a subsidiary is regarded as a


transaction through which the group indirectly acquires the subsidiary's assets and takes over its liabilities. During the acquisition analysis, the fair value, on the day of acquisition, of identifiable as-sets acquired and identifiable assets and liabilities taken over is de-termined, as well as of non-controlling interests. Transaction costs incurred, except for such that relate to the issue of equity instru-ments or debt instruments, are recognised directly in profit/loss for the year. In business combinations where the consideration trans-ferred, any non-controlling interests and the fair value of an interest previously acquired (in step acquisitions) exceed the fair value of as-sets acquired and liabilities assumed that are accounted for separately, the difference is recognised as goodwill. When the difference is negative, as in the case of a “low cost acquisition”, it is recognised directly in profit/loss for the year. The consideration transferred in connection with the acquisition does not include payments in settle-ment of earlier business transactions. Such settlements are recognised in the profit/loss. Conditional purchase considerations are recognised at fair value at the time of acquisition. Where the con-ditional purchase consideration is classified under “equity instru-ments”, it is not revalued and it is settled within equity. Conditional purchase considerations of other types are revalued on each report-ing occasion and any change recognised in profit/loss for the year. Where 100% of the subsidiary is not acquired, a non-controlling in-terest arises. There are two options for accounting for non-control-ling interests. These are either to recognise the non-controlling interests’ proportionate share of net assets, or to recognise the non-controlling interest at fair value, which means that non-controlling interests represent a share of goodwill. The choice between the options for recognising non-controlling interests may be made on a case-by-case basis. In the case of acquisitions performed in stages, goodwill is determined on the day on which the controlling interest arises. Existing interests are measured at fair value and any changes in value recognised in profit/loss for the year. In the case of disposals where a controlling interest ceases but an interest is retained, the remaining interest is measured at fair value and the change in value recognised in profit/loss for the year.

Business combinations between 1 January 2004 and 31 December 2009In the case of acquisitions made between 1 January 2004 and 31 De-cember 2009, where the acquisition cost exceeds the fair value of assets acquired and liabilities assumed, as well as contingent liabil-ities recognised separately, the difference is recognised as goodwill. When the difference is negative, it is recognised directly in profit/loss for the year. Transaction costs incurred, except for such that relate to the issue of equity instruments or debt instruments, are included in the acquisition cost.

Business combinations before 1 January 2004 (date of adoption of IFRS)In the case of acquisitions before 1 January 2004, goodwill is meas-ured, after testing for impairment, at an acquisition cost that corres-ponds to the carrying amount calculated by the accounting policies formerly applied. The classification and accounting treatment of business combinations made before 1 January 2004 have not been reviewed in accordance with IFRS 3 in preparation of the consoli-dated opening balance in accordance with IFRS on 1 January 2004.

The financial statements of subsidiaries are included in the consol-

idated financial statements from the date of acquisition until the date on which the controlling influence ceases. In cases where the accounting policies of the subsidiary do not comply with the ac-counting policies for the Group, the Group’s accounting policies have been adjusted.

Purchases from non-controlling interestsPurchases from non-controlling interests are treated as transactions within equity, i.e. between the Parent Company’s owners (as part of retained profit) and non-controlling interests. As a result, no good-will arises in these transactions. The change in non-controlling in-terests is based on their proportionate share of net assets.

Sale to non-controlling interestsSales to non-controlling interests, where a controlling interest is re-tained, are treated as transactions within equity, i.e. between the Parent Company’s owners and non-controlling interests. Any differ-ence between the consideration received and the non-controlling interests’ proportionate share of acquired net assets is recognised as part of retained profit.

Joint venturesFrom an accounting viewpoint, joint ventures are companies for which the Group, through a cooperation agreement with one or sev-eral parties, jointly exercises a controlling influence over the operational and financial management. Interests in joint ventures are consolidated in the Group's accounts using the proportional method.

Transactions eliminated on consolidationIntra-Group receivables and liabilities, income or costs and unreal-ised profits or losses arising from intra-Group transactions are elim-inated in their entirety when in preparation of the consolidated ac-counts. Unrealised gains arising from transactions with associated companies and joint ventures are eliminated to an extent that cor-responds to the group's ownership stake in the company. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that no impairment requirement exists.

FOREIGN CURRENCIESTransactions in foreign currenciesTransactions in foreign currencies are translated to the functional currency at the exchange rate prevailing on the day of the transac-tion. The functional currency is the currency in the primary finan-cial environments in which the companies conduct their operations. Monetary assets and liabilities in foreign currencies are translat-ed to the functional currency at the rate of exchange prevailing on balance sheet date. Any exchange rate differences arising on trans-lation are recognised in profit/loss for the year. Non-monetary as-sets and liabilities recognised at their historical acquisition value are translated at the exchange rate prevailing at the time of the transac-tion. Non-monetary assets and liabilities recognised at fair value are translated to the functional currency at the rate prevailing at the time the fair value of the item was measured. Financial statements of foreign operationsAssets and liabilities of foreign operations, including goodwill and other surplus and deficit values on consolidation, are translated


from the respective foreign operation’s functional currency to the Group’s reporting currency, SEK, at the exchange rate prevailing on balance sheet date. Income and expenses in a foreign operation are translated to SEK at an average exchange rate. Translation differ-ences arising on currency translation for foreign operations are re-cognised in other comprehensive income and accumulated as a separate component of equity entitled the translation reserve.

Hedging of net investment in a foreign operationThe Group spans activities in several countries. In the consolidat-ed statement of financial position, investments in activities outside Sweden are represented by recognised net assets in subsidiaries. To a certain extent, measures have been taken to reduce currency risks associated with these investments. This has been done by rais-ing loans or signing forward contracts in the same currency as the net investments. At the end of the reporting period, these loans are translated at the rate prevailing at the balance sheet date and the forward contracts are reported at fair value. The effective part of the period's currency changes relating to hedging instruments is recognised in other comprehensive income and accumulated as a separate component of equity in order to meet and partly or wholly match the translation differences that are recognised for net assets in the foreign operations that have been hedged. The translation differences arising from both net investment and hedging instru-ments are dissolved and recognised in profit/loss for the year when the foreign operation is disposed of. In cases where the hedging is not effective, the ineffective portion is recognised directly in profit/loss for the year.

INCOMESale of goodsRevenue from the sale of goods is recognised in profit/loss for the year when significant risks and benefits associated with the ownership of the goods have been transferred to the buyer. Revenue is not re-cognised if it is not probable that the economic benefits will pass to the Group. If significant uncertainty prevails concerning payment, as-sociated costs or risk of returns, or if the seller retains an involvement in the day-to-day management generally associated with ownership, revenue is not recognised. Revenue is recognised at the fair value of what is received or expected to be received, less any discounts granted. LEASING Operational lease contracts Expenses for operating lease contracts are recognised in profit/loss for the year on a linear basis over the period of the lease. Incentives received in connection with the signing of a lease contract are recognised in profit/loss for the year as a reduction in the leasing fee on a linear basis over the period of the lease. Variable fees are expensed in the periods in which they arise.

Financial lease contractsMinimum leasing fees are divided between interest costs and amortisation of outstanding liabilities. Interest costs are distributed over the leasing period so that each accounting period includes an amount corresponding to a fixed interest rate for the liability reported in each period. Variable fees are expensed in the periods in which they arise.

FINANCE INCOME AND COSTSFinance income and costs consist of interest income on invested funds (including financial assets available for sale), dividend in-come, profit from disposal of financial assets available for sale, profit from changes in value in financial assets measured at fair value through profit/loss for the year and profits from hedge instruments recognised in profit/loss for the year. Interest income from finan-cial instruments is recognised using the effective interest method. Dividend income is recognised when the right to receive payment is established. Profit from disposal of financial instruments is reported when the risks and benefits associated with owning the instrument are transferred to the buyer and the Group no longer controls the instrument. Finance costs comprise interest costs for loans, the effect of dissolving of current value estimates for provisions, losses in the change of value of financial assets measured at fair value via profit/loss, the impairment of financial assets, and losses on hedge instruments recognised in profit/loss for the year. Exchange rate profits and losses are reported net. TAXES Income taxes comprise current tax and deferred tax. Income taxes are reported in profit/loss for the year except when the underlying transaction is recognised in other comprehensive income or in equity, in which case the associated tax effect is recognised in other comprehensive income or equity. Current tax is tax that will be paid or received with regard to the current year on the basis of the tax rates established, or in practice established, by the balance sheet date. Current tax also includes any adjustment of current tax attrib-utable to earlier periods.

Deferred tax is calculated using the balance sheet method on the basis of temporary differences between recognised and fiscal values of assets and liabilities. Temporary differences are not taken into account in goodwill arising on consolidation or arising in the first accounting for assets and liabilities that are not business combina-tions and at the time of the transaction do not affect either recog-nised or taxable income. In addition, temporary differences attrib-utable to participations in subsidiaries and associated companies that are not expected to be reversed within the foreseeable future are not taken into account either. The calculated of deferred tax is based on how the underlying assets or liabilities are expected to be realised or settled. Deferred tax is calculated by application of the tax rates and tax rules established, or in practice established, by the balance sheet date. Deferred tax assets relating to non-deductible temporary differences and tax loss carry-forwards are recognised only to the extent that it is probable that these can be used. The value of deferred tax assets is reduced when it is no longer consid-ered likely that they can be used. FINANCIAL INSTRUMENTS Financial instruments recognised in the statement of financial position include, on the assets side, cash and cash equivalents, loan receivables, trade receivables, financial investments and derivatives. On the liabilities side, financial instruments include trade payables, loan liabilities and derivatives.


Recognition in and derecognition from the statement of financial position A financial asset or liability is recognised in the statement of finan-cial position when the company becomes a party to the contractual provisions of the instrument. Trade receivables are recognised in the statement of financial position when the invoice has been sent. A liability is recognised when the counterparty has performed his obligation and a contractual duty to pay exists, even if an invoice has not yet been received. Trade payables are recognised when an in-voice has been received. A financial asset is derecognised from the statement of financial position when the contractual rights are per-formed, expire or the company no longer has control over them. The same applies to a part of a financial asset. A financial liability is derecognised from the statement of financial position when the con-tractual obligation is fulfilled or otherwise expires. The same ap-plies to a part of a financial liability. A financial asset and a financial liability are offset and recognised as a net amount in the statement of financial position only when a legal right to offset the amounts exists, and there is an intention to settle the items with a net amount or to realise the asset and settle the liability at the same time. Ac-quisition and disposal of financial assets are recognised on the transaction date, which is the day on which the company undertakes to acquire or dispose of the asset.

Classification and measurementFinancial instruments that are not derivatives are initially recog-nised at acquisition value, corresponding to the fair value of the in-strument plus transaction costs for all financial instruments other than those in the category of financial asset recognised at fair value via the profit or loss, which are recognised at fair value less transac-tion costs. When first recognised, a financial instrument is classified on the basis of the purpose for which the instrument was acquired. This determines how the value of the financial instrument is meas-ured after the first accounting occasion, as described below.

Cash and cash equivalents comprise cash and funds immediately available at banks and similar institutions, as well as current invest-ments with a term of less than three months at the acquisition date which are exposed to an insignificant risk of fluctuations in value.

Loan receivables and trade receivablesLoan receivables and trade receivables are financial assets that are not derivatives, that have defined or definable payments and that are not listed on an active market. These assets are recognised at ac-cumulated acquisition value. The accumulated acquisition value is decided on the basis of the effective interest rate calculated at the time of acquisition. Trade receivables are recognised in the amounts that are expected to be received, i.e. after deduction of bad debts. Impairment tests are performed on an ongoing basis using object-ive criteria for the assets concerned. Where a loss is confirmed, the asset is written down. However, a provision is made when the loss is anticipated. Criteria that are taken into account when a provision is made may include, for example, non-payment of amounts due or other indications that may indicate financial problems on the part of the debtor.

Other financial liabilitiesLoans and other financial liabilities, for example trade receivables,

are included in this category. These liabilities are measured at accu-mulated acquisition value.

The categories in which the Group's financial assets and liabilities, respectively, are classified are indicated in the Note entitled Finan-cial risks and financial policies. Financial guarantees Under the Group's financial guarantee agreements, the Group has an undertaking to reimburse the holder of any debt instrument in respect of losses the holder incurs if a stated debtor fails to make payment when due, in accordance with the original or amended contractual terms and conditions. Financial guarantee agreements are initially recognised at fair value, i.e. normally the amount the is-suer received in compensation for the guarantee issued. In the sub-sequent valuation, the liability linked to the financial guarantee is recognised at whichever is the higher of (i) the amount recognised in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, or (ii) the amount originally recognised after de-duction where appropriate of accumulated accruals, as reported in accordance with IAS 18 Revenue.

DERIVATIVES AND HEDGE ACCOUNTING The Group’s derivative instruments have been acquired to obtain financial protection for the risks relating to interest rate and ex-change rate exposures to which the Group is susceptible. Embedded derivatives are recognised separately if they are not closely related to the host contract. Derivatives are recognised initially at fair value, meaning that transaction costs are charged to profit/loss for the period. Subsequently, derivative instruments are measured at fair value and value changes reported in the way described below. To meet the requirements for hedge accounting stipulated in IAS 39, there must be a clear link to the hedged item. Moreover, the hedging must effectively protect the hedged item, hedging documentation must be complete and the effectiveness of the hedging must be measurable. Gains and losses on hedging arrangements are recog-nised in profit/loss for the year at the same point in time as gains and losses are reported for the items hedged.

Receivables and liabilities in foreign currenciesCurrency forward contracts are used to hedge the currency risk of receivables and liabilities. To protect against currency risk, hedge accounting is not applied, since a financial hedging arrangement is reflected in the accounts in that both the underlying receivable or liability and the hedging instrument are recognised at the exchange rate on the balance sheet date and the exchange rate fluctuations are recognised via profit/loss for the year. Exchange rate changes regarding operationally related receivables and liabilities are recog-nised in the operating profit or loss, while exchange rate changes relating to financial receivables and liabilities are recognised under finance income/costs net.

Cash flow hedging for uncertainty associated with forecast sales in foreign currencyThe currency forwards used to hedge high-probability forecast sales in foreign currencies are recognised in the statement of financial position at fair value. The value changes in the period are recog-


nised in other comprehensive income and the accumulated value changes, as a separate component of equity (the hedging reserve) until the hedged flow affects profit/loss for the year, whereupon the accumulated value changes in the hedging instrument are reclassi-fied to profit/loss for the year at the same time as the hedged item (the sales income) affects profit/loss for the year.

Cash flow hedging for interest rate riskInterest swaps are used to hedge against the uncertainty in high-probability forecast interest-rate flows relating to loans at variable interest rates. These interest rate swaps are measured at fair value in the statement of financial position. The interest coupon component is recognised on an ongoing basis in profit/loss for the year as a con-stituent of the interest expense. Any other value change in interest rate swaps is recognised in other comprehensive income and is in-cluded in the hedging reserve until the hedged item affects profit/loss for the year and for as long as the criteria for hedge accounting and effectiveness are satisfied. Any profit or loss that is attributable to the in-effective portion is recognised in profit/loss for the year.

Hedging of fair value in non-financial assetsWhen a hedging instrument is used to hedge a fair value, the deriv-ative is accounted for at fair value in the statement of financial po-sition and the hedged asset/liability is also accounted for at fair val-ue with regard to the risk being hedged. The change in value of the derivative is recognised in profit/loss for the year along with the change in value of the hedged item. Fair value hedging is used to protect the value of certain non-financial assets and liabilities that appear in the statement of financial position and in hedging of cer-tain binding purchase undertakings with regard to price risk.

Hedging of fair value of interest rate riskInterest rate swaps are used as hedging instruments to hedge against the risk of any change in fair value in the Company's own borrowing at fixed interest rates. In the accounts, fair value hedging is then used and the hedged item is translated at fair value with regard to the risk hedged (the risk-free interest rate) and changes in value are recognised in the profit and loss for the year in the same way as for the hedging instrument.

Hedging of currency risk in net foreign investmentsInvestments in foreign subsidiaries (net assets, including goodwill) have to a certain extent been hedged via the raising of foreign cur-rency loans, which on the balance sheet date have been translated at the exchange rate on that date. The period's translation differences in financial instruments used as hedging instruments to protect the value of net investment in a Group company are recognised, to the degree that the hedging is effective, in other comprehensive income and the accumulated changes as a separate component of equity (the translation reserve). The object is to neutralise the translation differences that affect other comprehensive income on consolida-tion of Group companies.

PROPERTY, PLANT AND EQUIPMENTAssets ownedProperty, plant and equipment are recognised in the Group at ac-quisition value after deduction of accumulated depreciation and

any impairment losses. The acquisition value includes the purchase price and costs directly associated with the asset to bring it into place and to a condition that it may be used in accordance with the objective of the acquisition. Borrowing costs that are directly attrib-utable to the acquisition, construction or production of assets that require a considerable amount of time to complete for their inten-ded use or sale are included in the acquisition value. Accounting policies for impairment losses are set out below.

Property, plant and equipment that consist of parts with different useful lives are handled as separate components.

The carrying amount for an asset classified as property, plant and equipment is derecognised from the statement of financial position on its retirement or disposal, or when no future economic benefits are anticipated from its use or its retirement/disposal. A profit or loss that may arise upon the disposal or retirement of an asset is made up of the difference between the selling price and the asset's carrying amount, less directly related costs to sell. Any such profit or loss is reported as other operating income or expense.

Leased assetsLease contracts are classified under either financial or operating leases. Financial leasing exists when the financial risks and benefits associated with the ownership are essentially transferred to the lessee. If this is not the case the lease is classified as an operating lease.

Assets leased under finance lease contracts are recognised as non-current assets in the statement of financial position and are initial-ly measured as whichever is the lower of the leasing object's fair val-ue and the current value of minimum leasing fees at the start of the agreement term. Commitments to pay future leasing charges are recognised as non-current and current liabilities. The leased assets are depreciated over the useful life of each particular asset, while the lease payments are recognised as interest and amortisation of the liabilities.

Assets leased under operating leases are generally not recognised as an asset in the statement of financial position. Furthermore, operating leases do not give rise to a liability.

Subsequent costsSubsequent costs are added to the cost of the asset only if it is prob-able that the future economic benefit associated with the asset will accrue to the company and the cost of the asset can be measured re-liably. All other subsequent costs are recognised as expenses in the period when they occur. A subsequent cost is added to the cost of the asset if the payment covers the replacement of identified com-ponents, or parts of them. Even if new components are created, the payment is added to the cost of the asset. Any undepreciated carry-ing amounts for replaced components, or parts of them, are dere-cognised and expensed in connection with the replacement. Repairs are expensed as incurred.

Borrowing costs Borrowing costs that are attributable to the construction of “qualify-ing assets” are capitalised as part of the acquisition cost of the asset.


A qualifying asset is an asset that necessarily requires a considerable amount of time to made ready for use. The main category of bor-rowing costs to be capitalised is made up of those incurred through loans that are specific to the qualifying asset. The second category of borrowing costs to be capitalised are those incurred through general loans that are not specific to any other qualifying asset.

Depreciation principlesDepreciation is applied on a straight-line basis over the estimated useful life of the particular asset. Land is not depreciated. The Group applies component depreciation, according to which depreci-ation is based on the estimated useful life of each component.

Estimated useful lives: Buildings 10–100 years Land improvements 20 years Plant and machinery 5 –10 years Equipment, tools, fixtures and fittings 3 –10 years

Buildings consist of a number of components with varying useful lives. The principal constituents are buildings and land. No depre-ciation is applied to land, since its useful life is considered to be un-limited. Buildings consist of several components with varying use-ful lives.

The following main groups of components have been identified and provide the basis for the depreciation of buildings: Building structures 100 years Structural additions, interior walls, etc. 50 years Installations: heating, electricity, water, sanitation, ventilation, etc. 35–50 years Exterior surfaces: facades, roofing, etc. 10–40 years Interior surfaces, machinery and equipment, etc. 10 –15 years

Depreciation methods applied, residual values and useful lives are reviewed at every year-end. INTANGIBLE ASSETSGoodwillGoodwill is valued at acquisition value less any accumulated impairment. Goodwill is allocated to cash-generating units and is re-viewed at least once a year for any impairment. Goodwill arising at acquisition of associated companies is included in the carrying amount for participations in associated companies.

As regards goodwill in acquisitions before 1 January 2004, the Group has not, on adopting IFRS, applied IFRS retroactively; in-stead the value recognised on that date will continue to represent the Group's acquisition cost, after being tested for impairment.

Other intangible assetsOther intangible assets acquired by the Group are recognised at acquisi-tion value less accumulated amortisation and impairment. The costs in-curred for internally generated goodwill and internally generated brands are recognised in profit/loss for the year as and when they arise.

Depreciation principlesDepreciation is recognised in profit/loss for the year over the esti-mated useful life of each intangible asset, provided the length of such useful lives is not indefinite. The useful lives are reviewed at least once a year. Goodwill and other intangible assets with an in-definite useful life or that are not yet ready for use are tested for im-pairment annually and in addition as soon as indications emerge to suggest that the value of the asset has declined. Intangible assets with a finite useful period are amortised from the time when they are available for use.

The estimated useful lives are as follows: Brands 10 yearsThe useful lives are reviewed every year.

INVENTORIESInventories are valued at acquisition value or net sale value, which-ever is the lower. Provision has been made for the risk of obsoles-cence. The acquisition value for inventories is calculated by applying the first-in, first-out (FIFO) method, and takes account of expenses arising at acquisition of the inventory assets and transport of such assets to their current location and condition. In the case of manu-factured goods and work in progress, the acquisition value includes a reasonable proportion of indirect costs based on normal capacity. The net sale value is the estimated sale price in current operations, less estimated costs for completion and bringing about a sale. IMPAIRMENT LOSSESOn every balance sheet date, the Group's recognised assets are re-viewed to determine whether there is any impairment requirement. IAS 36 is applied in connection with any impairment of assets other than financial assets, which are accounted for in accordance with IAS 39, Assets Held for Sale and Disposal Groups, which are meas-ured in accordance with IFRS 5, Inventories and Deferred Tax Assets.

Impairment test for tangible and intangible assets and participations in joint venturesIf there is any indication that an asset is impaired, the recoverable amount of the asset is calculated. In addition, in the case of good-will and other intangible assets with an indefinable useful life and intangible assets that are not yet ready for use, the recoverable amount is calculated each year. If it is not possible to determine essentially independent cash flows for a particular asset, and its fair value less costs to sell cannot be used, the asset is classified during appraisal of impairment at the lowest level where it is possible to identify essentially independent cash flows - a “cash-generating unit”.

An impairment loss is recognised when the carrying amount of an asset or cash-generating unit exceeds the recoverable value. An im-pairment cost is recognised as an expense in profit/loss for the year. When an impairment loss has been identified for a cash-generating unit, the amount of impairment loss is in the first instance allocated to goodwill. Impairment losses are then applied on a pro rata basis to other assets of the unit. The recoverable amount is the fair value less cost to sell and value in


use, whichever is the higher. In calculating the value in use, future cash flows are discounted using a discount factor reflecting the risk-free interest rate and the risk associated with the particular asset.

Reversal of impairment lossesAn impairment of assets within the scope of IAS 36 is reversed if there is both an indication that the impairment requirement no longer exists and there has been a change in the assumptions on which estimation of recoverable value was based. However, an im-pairment loss for goodwill is never reversed. An impairment is re-versed only if the carrying amount of the asset after reversal does not exceed the carrying amount that would have been recognised, less a deduction for depreciation where appropriate, if no impair-ment loss had been applied. EARNINGS PER SHAREThe calculation of earnings per share is based on the portion of the Group's profit/loss for the year that is attributable to the Par-ent Company's shareholders, and on the weighted average number of shares outstanding during the year. In calculating diluted earn-ings per share, the profit/loss and the average number of shares are adjusted to take account of dilutive potential ordinary shares, which during the reporting period arise from convertible securities and warrants issued to employees. Dilution from warrants affects the number of shares; it arises only when the redemption price is lower than the market price, and rises as the difference between redemp-tion price and market price increases. REMUNERATION TO EMPLOYEESDefined-contribution pension plansPension plans in which the Company's commitments are restricted to the fees the Company undertakes to pay are classified as defined-contribution pension plans. In such cases, the size of the employee's pension is determined by the contributions the Company pays into the plan or to an insurance company, and the return on capital that the contributions produce. The Company's obligations regarding contributions to defined-contribution plans are recognised as an ex-pense in profit/loss for the year as they are earned through services performed by the employee for the Company during a period.

Defined-benefit pension plansThe Group's net obligations regarding defined-benefit pension plans are computed separately for each plan via an estimate of the future remuneration that the employees will have earned through their employment in both the current and previous periods; this re-muneration is discounted to a current value and the fair value of any managed assets is deducted.

The obligations in terms of retirement pensions and family pen-sions for salaried employees in Sweden are secured through an in-surance policy with Alecta. According to a statement (UFR 3) from the Swedish Financial Reporting Board, this is a defined-benefit plan jointly operated by several employers. For the 2010 financial year, the Company has not had access to the information required to enable it to account for this plan as a defined-benefit plan. As a result, the pension plan under the ITP (Supplementary Pension for Salaried Employees in Industry and Commerce) scheme, secured

through an insurance policy with Alecta, is reported as a defined-contribution plan.

Termination benefitsA provision is reported in connection with termination of employ-ment of staff only if the company is clearly committed, without a realistic possibility of reversal, to a formal and detailed plan to termin- ate employment before the normal time. When payments are made as an offer to encourage voluntary redundancy, a cost is recognised if it is considered likely that the offer will be accepted and the number of employees who will accept the offer can be reliably be estimated.

PROVISIONSA provision differs from other liabilities in that uncertainty is at-tached to the time of payment and the size of the amount needed to discharge the obligation. A provision is reported in the statement of financial position when there is an existing legal or informal obliga-tion arising from an event that has occurred; it is probable that an outflow of financial resources will be required in order to settle such obligation; and a reliable estimate of the amount can be made. WarrantiesA provision for warranties is recognised when the underlying prod-ucts or services are sold. The provision is based on historical data on warranties and an analysis of conceivable outcomes relative to the probabilities associated with those outcomes.

RestructuringA provision for restructuring is recognised when a detailed and formal restructuring plan is established, and when the restructuring has either been started or has been announced publicly. No provision is made for future operating costs.

NON-CURRENT ASSETS HELD FOR SALEThe significance of a non-current asset (or a disposal group) being classified as being held for sale is that its carrying amount will be re-coverable mainly through being sold and not through being used.

Immediately prior to the classification as being held for sale, the carrying amount of the assets (and all assets and liabilities in a dis-posal group) shall be determined in accordance with applicable standards. At first classification as being held for sale, non-current assets and disposal groups are recognised at whichever is the lower of carrying amount and fair value, less costs to sell. Under IFRS 5.5, certain assets are exempt from the measurement rules described above.

A gain is recognised for every increase in the fair value, less costs to sell. This gain is limited to an amount that corresponds to all previ-ous impairment losses recorded. Any losses arising from a reduction in value at first classification as being held for sale are recognised in profit/loss for the year. Subsequent value changes, both gains and losses, are also recognised in profit/loss for the year.

CONTINGENT LIABILITIESA contingent liability is recognised when a possible commitment arises in connection with events that have occurred and where


its existence is confirmed only by one or several uncertain future events, or when a commitment exists that is not reported as a liabil-ity or provision on the basis that it is unlikely that an outflow of re-sources will be required.

PARENT COMPANY'S ACCOUNTING PRINCIPLESThe Parent Company has prepared its annual accounts in accord-ance with the Swedish Annual Accounts Act (1995:1554) and Re-commendation RFR 2, Accounting by Legal Entities, issued by the Swedish Financial Reporting Board(December 2010). The Swedish Financial Reporting Board's statements on listed companies are also applied. Under RFR 2, the Parent Company is required, in preparing the annual accounts for the legal entity, to apply all IFRS and state-ments approved by the EU, as far as this is possible within the frame-work of the Swedish Annual Accounts Act and the Swedish Pension Obligations Vesting Act, and taking account of the relationship be-tween accounting and taxation. The recommendation states the ex-ceptions and additions to be made from and to IFRS.

DIFFERENCES BETWEEN THE ACCOUNTING POLICIES OF THE GROUP AND PARENT COMPANYThe differences between the accounting policies of the Group and the Parent Company are set out below. The accounting policies of the Parent Company indicated below have been applied consistently in all periods presented in the Parent Company's financial statements.

Revised accounting policiesUnless otherwise indicated below, the accounting policies applied by the Parent Company in 2010 have been amended as described above for the Group.

The changes in accounting policies under the revised IFRS 3 Busi-ness Combinations and amended IAS 27 Consolidated and Separate Fin-ancial Statements applied in the Group as regards transaction costs and conditional purchase considerations do not result in the same amendments to the accounting policies of the Parent Company. See section “Subsidiaries”

Recommendation RFR 2, Accounting by Legal Entities, issued by the Swedish Financial Reporting Board, states that IAS 1 Presentation of Financial Statements must, with effect from the start of 2010, also be applied to Parent Company accounts, with a few exceptions. The Company decided not to opt for early adoption of the new presentation of the financial statements for the Parent Company. However, in this annual report, the following changes have been made in the Parent Company’s forms of presentation. As a departure from the former accounting practice, a statement of comprehensive income has been added after the income statement. Another change is that the statement of changes in equity has acquired a content resembling that of the Group, i.e. excluding the income and expenses that were previously recognised directly in equity but are now presented in other comprehensive income in the statement of comprehensive income.

New accounting policies not yet implementedRFR 2 Accounting by Legal Entities states that amended IAS 1 Presenta-tion of Financial Statementsmust, no later than from the start of 2010, also be applied to the Parent Company, with a few exceptions. The Company has decided not to opt for early adoption of the new pres-

entation of the financial statements for the Parent Company. In the annual report for next year, presentation of the Parent Company’s financial statements will change in the following respects. As a de-parture from former accounting practice, a statement of compre-hensive income will appear after the income statement. Another change will be that the statement of changes in equity will acquire a content resembling that of the Group, i.e. excluding the income and expenses that were previously presented directly in equity but that will now be presented in other comprehensive income in the state-ment of comprehensive income. In addition, the Parent Company will also present an extra balance sheet as per the start of the year presented for comparison, in annual accounts where retroactive changes have to a considerable extent affected an item in the extra balance sheet. Classification and forms of presentationAn income statement is presented for the Parent Company, whereas an income statement and a statement of comprehensive income are presented for the Group. Otherwise, the terms “balance sheet” and “cash flow statement” are used for the Parent Company for the state-ments that in the Group are entitled “statement of financial posi-tion” and “statement of cash flows”. The Parent Company's income statement and balance sheet have been prepared in accordance with the schedule specified by the Swedish Annual Accounts Act, while the statement of changes in equity and the statement of cash flows are based on IAS 1 Presentation of Financial Statements and IAS 7 State-ment of Cash Flows. The main differences between the Consolidated and Parent Company’s income statements and balance sheets con-sist of the treatment of finance income and costs, non-current assets and equity. SubsidiariesShares in subsidiaries are recognised in the Group using the pur-chase method. Shares in subsidiaries are recognised in the Par-ent Company using the acquisition method. As a result, transaction costs are included in the carrying amount for shares in subsidiaries. In the consolidated accounts, transaction costs are recognised im-mediately in the profit or loss when they arise.

Conditional purchase considerations are measured on the basis of the probability that the purchase consideration will be paid. Any changes in the provision/claim is added to/reduces the acquisition cost. Conditional purchase considerations are recognised in the consolidated accounts at fair value, with any changes in values, via the profit or loss.

Low-cost acquisitions that correspond to anticipated losses and costs in the future are settled during the periods in which it is anticipated that the losses and costs will arise. Low-cost acquisitions that arise for other reasons are recognised as a provision to the extent that this does not exceed the fair value of identifiable non-monetary as-sets. Any portion that exceeds that value is recognised as income immediately. The portion that does not exceed the fair value of ac-quired identifiable non-monetary assets is recognised on a systematic basis over a period calculated as the remaining weighted average useful life of the identifiable assets to which depreciation may be applied. In the consolidated accounts, low-cost acquisitions are recognised immediately in the profit/loss.


Anticipated dividendsAnticipated dividends from subsidiaries are recognised when the Parent Company has the sole right to decide the size of such dividend, and the Parent Company has determined the size of the dividend prior to the Parent Company publishing its financial statements. Net investmentsIn the Parent Company, borrowing costs are charged to profit or loss in the period in which they are incurred. No borrowing costs are capitalised in assets.

Leased assetsIn the Parent Company, all lease contracts are accounted for in accordance with the rules on operating leases.

Borrowing costsIn the Parent Company, borrowing costs are charged to profit/loss in the period in which they are incurred. No borrowing costs are capitalised in assets.

Income taxesIn the Parent Company, untaxed reserves are recognised in the bal-ance sheet without being separated into equity and deferred tax liabilities, unlike in the consolidated accounts. In the Parent Company Income Statement, there is, similarly, no separate reporting of part of the appropriations as deferred tax liability. Group contributions and shareholder contributions for legal entitiesThe Company reports group contributions and shareholder contri-butions in accordance with the pronouncement by the Swedish Fin-ancial Reporting Board (UFR 2). Shareholder contributions are tak-en directly to the equity of the receiver and are capitalised in shares and participations by the donor, provided that no impairment is re-quired. Group contributions are reported on the basis of their fi-nancial significance. Thus, Group contributions paid and received with the objective of minimising the Group's total tax are charged directly to profits brought forward after a deduction for the related tax effect.

NOTE 2. REVENUE ANALYSIS Net sales for the Group as a whole, SEK 778.0 m (840.8) consist of the sale of goods. Net sales by the Parent Company, totalling SEK 6.0 m (6.4), comprise payments from the Group's subsidiaries for administrative services.

NOTE 3. OPERATING SEGMENTS The Group’s activities are divided into operating segments based on which parts of the Company’s activities are followed up by its top-most executives in what is known as the “management approach”. The Group's activities are organised such that the Group's manage-ment follows up the results, return and cash flow generated by the various business areas of the Group. Each operating segment has a business area manager who is responsible for day-to-day operations and who regularly reports the outcome of the operating segment's performance and its needs for resources, to the senior management team. Because the Group management follows up the results of op-

erations, and takes decisions on resource allocation on the basis of the Group's business areas, the business areas represent the Group's operating segments. As a result, the Group's internal accounting sys-tem is structured such as to allow the Group management to follow up the performance and results of all business areas. It is through this system of internal accounting that the Group's segments have been identified, in which the various parts of the organisation have undergone a process aimed at merging segments that are similar. In the process, segments have been merged when they have similar economic characteristics and when their products, production pro-cesses, customers and method of distribution are similar, and when they operate in an environment with a similar regulatory structure. The results, assets and liabilities of the operating segments include directly attributable items, as well as items that can be allocated to the segments in a reasonable and reliable manner. The items recog-nised in the results, assets and liabilities of the operating segments are measured in accordance with the results, assets and liabilities that are followed up by the Company's Group management. Internal prices charged between the Group’s various operating segments are set on the basis of the “arm’s length” principle, i.e. between par-ties that are mutually independent, well-informed and with an inter-est in ensuring that the transactions are completed. Non-allocated items consist of gains from disposal of financial investments, losses from disposal of financial investments, tax expenses and general administrative expenses. Assets and liabilities that have not been allocated to segments are deferred tax assets and deferred tax liabil-ities, financial investments and financial liabilities.

BUSINESS AREASThe Lammhults Library business area develops and sells attractive and functional interiors for libraries, schools and other public meeting places such as educational premises and arts centres. Operations consist partly of project sales of complete interiors systems and partly of aftermarket sales of furniture and consumables. The business area is made up of companies Lammhults Biblioteksdesign AB (Sweden), Lammhults Biblioteksdesign A/S (Denmark) and Schulz Speyer Bibliothekstechnik AG (Germany) and subsidiaries. The business area includes the Eurobib Direct, BCI and Schulz Speyer brands.

The Lammhults Office business area develops and markets prod-ucts for interiors in public environments. The business area has two brands: Lammhults, with visually strong, timeless furniture with high design values, and Abstracta and Borks, with products for visual communication and screening.

The Lammhults Home business area develops and markets home in-teriors products. The business area has two brands: Voice for flat-pack furniture such as storage units and desks, and Ire for uphol-stered furniture such as sofas and armchairs.

The Scandinavian Eyewear business area develops and markets high-quality spectacle frames. The business area comprises Scan- dinavian Eyewear AB with subsidiary Seven. The business comprises the company's own Skaga brand and licensing deals for developing collections for other brands.

Other operations include Group-wide functions.


GROUP'S OPERATING SEGMENTS

Lammhults Lammhults Lammhults Scandinavian Other

Library Office Home Eyewear operation(s) Eliminations TotalGroup 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009Income from external customers 318.2 365.0 281.9 277.8 73.3 93.2 104.6 104.8 0.0 0.0 0.0 0.0 778.0 840.8Income fromother segments 0.0 0.0 5.8 5.5 0.1 0.1 0,0 0.0 6.0 6.4 –11.9 –12.0 0.0 0.0

Total income 318.2 365.0 287.7 283.3 73.4 93.3 104.6 104.8 6.0 6.4 –11.9 –12.0 778.0 840.8 Depreciation 5.9 6.2 4.9 5.8 1.8 1.7 1.8 2.2 0.1 0.2 0.0 0.0 14.5 16.1 Operating profit/loss 13.8 35.7 32.8 25.6 –9.0 3.7 3.7 –5.9 –14.6 –14.5 0.0 0.0 26.7 44.6Interest income 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.8 2.0Interest expense 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 –3.3 –7.7

Profit before tax 24.2 38.9

Assets 269.7 311.6 220.2 188.8 105.2 112.6 81.0 71.0 5.8 1.8 0.0 0.0 681.9 685.8Non-allocated assets - - - - - - - - - - - - 62.2 68.8Total assets 744.1 754.6 Investments in non-current assets 3.0 7.1 2.4 1.8 2.2 7.8 0.6 0.8 0.0 0.1 - - 8.2 17.7 Liabilities 52.7 54.9 42.6 46.7 14.0 20.3 33.9 27.9 5.8 5.6 - - 149.0 155.4Non-allocated liabilities - - - - - - - - - - - - 225.8 204.1Total liabilities 374.8 359.5

GEOGRAPHICAL AREASThe Group's segments are divided into three geographical areas: Sweden, Rest of Europe and Rest of the World. The information presented on segmental income is classified according to the geographical location of our customers.

Information on the assets in the respective segments and the investments during the period in property, plant and equipment and in intangible non-current assets is based on geographical areas according to where the assets are located. Net sales by the Group outside Sweden represent 65% (64) of total net sales.

Sweden Rest of Europe Rest of the World GroupGroup 2010 2009 2010 2009 2010 2009 2010 2009

Net sales per geographical market 273.4 305.2 462.8 484.1 41.8 51.5 778.0 840.8Assets per geographical market 506.4 509.1 236.2 242.0 1.5 3.5 744.1 754.6 Investments per geographical market 5.0 10.8 3.2 6.9 0.0 0.0 8.2 17.7


NOTE 4. OTHER OPERATING INCOME

Group 2010 2009

Exchange rate gains 6.6 9.3Other operating income 0.9 0.2 7.5 9.5

NOTE 5. OTHER OPERATING EXPENSES

Group 2010 2009

Exchange rate losses 8.2 9.9Reversals of acquired order bookings 0.9 0.1Other operating costs 1.0 0.1 10.1 10.1

Development costs in the amount of SEK 20.4 m (18.1) have been expensed and included in operating expenses as administration costs. Development is conducted to a certain extent in the form of order-based development, which is accounted for in accordance with IAS 2 and is thus paid for by the customer concerned. For further details of capitalised development costs, see Note 12.

Reversals of acquired order bookings, totalling SEK 0.9 m (0.1), per-tained in 2010 to the depletion of the market value of acquired order bookings at Harmonie Projects; in 2009, the item referred to the de-pletion of the market value of the acquired order bookings at Schulz Benelux.

NOTE 6. EMPLOYEES, PERSONNEL COSTS AND REMUNERATION OF SENIOR EXECUTIVES

Cost of remuneration of employees 2010 2009

GroupSalaries and remuneration etc. 165.3 172.8Pension costs 12.0 13.0Social security contributions 33.8 41.4Total, Group 211.1 227.2

Of whom Of whom Average number of employees 2010 men, % 2009 men, %

Parent Company Sweden 5 60 4 50 Subsidiaries Sweden 234 61 260 63Denmark 58 51 55 47Germany 39 64 41 59Other countries 58 50 50 44Total, subsidiaries 389 58 406 58Total, Group 394 58 410 58

31/12/2010 31/12/2009 Gender breakdown in Share Share company managements women, % women, %

Parent Company Board of Directors 33 33Other senior executives 0 0 Total, Group Boards of Directors 10 10Other senior executives 25 14

REMUNERATION TO SENIOR EXECUTIVESGuidelinesThe Chairman and Members of the Board receive remuneration as determined by resolution at the Annual General Meeting of Shareholders (AGM). In addition, the 2010 AGM resolved that remuneration for work of the audit and remuneration commit-tees shall be paid in an amount not exceeding SEK 100 th. (0), to be distributed as per decision of the Board. No agreements exist with regard to future pensions or severance pay, either for the Chairman of the Board or for other Board Members. The AGM has adopted the following guidelines on the remuner-ation of senior executives. Wages, salaries and other employment conditions for the President and other senior executives shall be in line with the market and competitive, to enable competent and skilled personnel to be recruited, motivated and retained. The Group's senior executives, comprising in all seven persons who make up Group management, have agreements on variable re-muneration over and above a fixed salary. The size of the variable remuneration is linked to predetermined objectives based on in-dividually set goals and the Group's results, or the results of the particular business area. The variable remuneration for senior executives may total no more than four monthly salary payments per annum. There should also be scope for long-term equity or equity-related incentive programmes. On termination of an employment contract by the Company with regard to the President and other senior executives, compensa-tion shall be paid in an amount corresponding to no more than 18 months’ pay. The total compensation shall not exceed the com-pensation that would have been paid if represented by a period of notice of six months and severance pay equal to no more than 12 months' fixed salary.

Agreements on pension benefits shall be entered into individually. For the President, an annual pension premium amounting to ten times Sweden's “Base Amount” (Swedish: prisbasbelopp) shall be paid. The pension is of the defined-contribution type. No agreement exists regarding early retirement. For other senior executives, pension costs shall amount to a maximum of 25% of the fixed and variable sal-ary. The pensions are of the defined-contribution type, and no agree-ments exist regarding early retirement.


BREAKDOWN OF SALARIES AND OTHER REMUNERATION - PER COUNTRY AND PER SENIOR EXECUTIVES/OTHER EMPLOYEES; SOCIAL WELFARE CHARGES, PARENT COMPANY

2010 2009 Senior Other Senior Other executives employees executives employees Parent Company (9 pers.) (2 pers.) (8 pers.) (2 pers.)Sweden Salaries and other remuneration 4.6 0.9 3.8 0.9(of which bonuses etc.) (–) (–) (–) (–) Social welfare charges 2.5 0.4 2.3 0.4of which pension costs 1.0 0.1 1.0 0.1

BREAKDOWN OF SALARIES, OTHER REMUNERATION, PENSION COSTS AND PENSION COMMITMENTS – PER COUNTRY FOR SENIOR EXECUTIVES OF THE GROUP

2010 2009 Senior Senior executives executives Group (48 pers.) (43 pers.)Sweden Salaries and other remuneration 22.0 24.7(of which bonuses etc.) (0.7) (0.1)Pension costs 3.4 4.6 Denmark Salaries and other remuneration 8.3 4.1(of which bonuses etc.) (-) (0.2)Pension costs 0.3 - Germany Salaries and other remuneration 3.4 2.8(of which bonuses etc.) (1.7) (1.3)Pension costs 0.3 –Total, Group 33.7 31.6(of which bonuses etc.) (2.4) (1.6)Pension costs 4.0 4.6

No pension commitments have been entered into on behalf of senior executives in the Group. “Senior executives” refers to those who are members of the management group of the individual subsidiaries, including presidents and managers who report directly to the President, and Board members.


INCENTIVE PROGRAMME FOR SENIOR EXECUTIVESOn 29 April 2008, the Company issued 75,000 warrants for the period 2008-2010. Each warrant entitled the holder to subscribe one new Class B share in the Company in the period from 31 March 2010 to 31 May 2010, inclusive.

The subscription price was set at an amount corresponding to 143% of the volume-weighted average price paid for Class B shares in the Company on the Nasdaq OMX Nordic Exchange in Stockholm in the period from 6 May 2008 to 19 May 2008, inclusive.

Six senior executives in the Group each acquired 12,500 war-rants. The warrants were offered on commercial terms at a price computed on the basis of a market value estimated for the warrants using the Black & Scholes valuation model and calculated by the independent valuation institution Öhrlings PricewaterhouseCoopers. The offer price was set at SEK 3.67 per warrant, representing a total acquisition price of SEK 45,875 per executive. The redemption price for the warrants was SEK 79.00. No options were exercised to subscribe new Class B shares in the period from 31 March 2010 to 31 May 2010, inclusive.

On 29 April 2009, the Company issued 35,000 warrants for the period 2009-2011. Each warrant entitles the holder to subscribe one new Class B share in the Company in the period from 31 March 2011 to 31 May 2011, inclusive.

The subscription price is set at an amount corresponding to 118% of the volume-weighted average price paid for Class B shares in the Company on the Nasdaq OMX Nordic Exchange in Stockholm in the period from 6 May 2009 to 19 May 2009, inclusive.

Three senior executives in the Group each acquired 10,000 war-rants, while one senior executive acquired 5,000 warrants. The warrants were offered on commercial terms at a price computed on the basis of a market value estimated for the warrants using the Black & Scholes valuation model and calculated by the independent valuation institution Öhrlings Pricewaterhouse-Coopers. The offer price was set at SEK 4.42 per warrant, representing a total acquisition price of SEK 44,200 and SEK 22,100 per executive, respectively, as described above. The redemption price for the warrants is SEK 50.00.

REMUNERATION OF SENIOR EXECUTIVES Remuneration and other benefits, Parent Company, 2010

Basic salary, Variable Severance Other Pension Fee, SEK th. Board fee remuneration pay benefits cost committee work TotalBoard Chairman Torbjörn Björstrand Remuneration from Parent Company 240 - - - - 19 259Board member Yngve Conradsson Remuneration from Parent Company 120 - - - - 9 129Board member Jerry Fredriksson Remuneration from Parent Company 120 - - - - 9 129Board member Erika Lagerbielke Remuneration from Parent Company 120 - - - - 9 129Board member Lotta Lundén Remuneration from Parent Company 120 - - - - 9 129Board member Anders Pålsson Remuneration from Parent Company 120 - - - - 19 139 PresidentAnders RothsteinRemuneration from Parent Company 1 971 - - 85 527 - 2 583

Other senior executives (2 pers.) 1 704 - - 144 461 - 2 309Total 4 515 - - 229 988 75 5 807

“Other benefits” refers to company cars. The pension costs refer to defined-contribution pension plans. The Group does not offer any share-related remuneration.


REMUNERATION OF SENIOR EXECUTIVES Remuneration and other benefits, Parent Company, 2009

Basic salary, Variable Severance Other Pension Fee, SEK th. Board fee remuneration pay benefits cost committee work TotalBoard Chairman Torbjörn Björstrand Remuneration from Parent Company 240 - - - - - 240Board member Yngve Conradsson Remuneration from Parent Company 120 - - - - - 120Board member Jerry Fredriksson Remuneration from Parent Company 120 - - - - - 120Board member Erika Lagerbielke Remuneration from Parent Company 120 - - - - - 120Board member Lotta Lundén Remuneration from Parent Company 120 - - - - - 120Board member Anders Pålsson Remuneration from Parent Company 90 - - - - - 90Board member Johan Sjöberg Remuneration from Parent Company 30 - - - - - 30Managing Director Johan Hjertonsson Remuneration from Parent Company 596 - - 44 358 - 998 PresidentAnders RothsteinRemuneration from Parent Company 1 453 - - 55 388 - 1 896

Other senior executives (1 person) 949 - - 91 246 - 1 286Total 3 838 - - 190 991 - 5 019

“Other benefits” refers to company cars. The pension costs refer to defined-contribution pension plans. The Group does not offer any share-related remuneration.


NOTE 9. NET FINANCE INCOME/COSTS

Group 2010 2009Interest income on non-impaired loans receivable and trade receivables 0.1 0.2Interest income on bank balances 0.5 1.2Interest income on trade payables 0.2 -Exchange rate fluctuations 0.0 0.6Financial income 0.8 2.0 Interest expense on defined-benefit pension commitments –0.1 –0.1Interest expense on financial liabilities –4.0 –5.9Exchange rate fluctuations 1.1 –1.7 Other interest expenses 0.3 -Finance costs –3.3 –7.7

Net finance income/costs –2.5 –5.7

Profit from participations in Group companiesParent Company 2010 2009Dividend 19.1 -

Interest income and similar itemsParent Company 2010 2009Interest income, Group companies 1.2 1.4Interest income on bank balances 0.1 0.2 1.3 1.6

Interest expense and similar profit/loss itemsParent Company 2010 2009Interest expense, Group companies –0.1 –0.4Interest expense, financial liabilities –2.3 –3.8Exchange rate fluctuations 1.4 –1.4 –1.0 –5.6

NOTE 7. FEES AND REIMBURSEMENT OF COSTS TO AUDITORS

Group Parent Company 2010 2009 2010 2009KPMG /Michael Johansson Auditing services 1.5 1.7 0.3 0.3Auditing services inaddition to auditing assignm. 0.0 0.0 - -Tax advice 0.5 0.1 0.0 0.0Other services 0.7 1.1 0.6 0.5 Other auditors Auditing services 0.4 0.3 - -Auditing services inaddition to auditing assignm. 0.4 0.0 - -Tax advice - 0.0 - -Other services 0.1 0.2 - 0.1

Auditing assignments refer to the audit of the annual report, annual accounts and administration of the Board and President, other assignments routinely performed by auditors, and advice and other support required through observations made during the audit or performance of routine duties.

NOTE 8. OPERATING EXPENSES ALLOCATED BY TYPE OF COST

Group 2010 2009Costs of goods and materials 336.8 360.7Personnel costs 212.8 228.0Depreciation 14.5 16.1Other operating costs 194.7 200.8 758.8 805.6


TAX ATTRIBUTABLE TO OTHER COMPREHENSIVE INCOME

2010 2009 Before After Before After Group tax Tax tax tax Tax taxTrans. diff. for year on translation of foreign operations –28.6 0.6 –28.0 –6.7 –1.7 –8.4Change in fair value of cash flow hedges during the year 1.3 –0.3 1.0 2.3 –0.6 1.7Other comprehensive income –27.3 0.3 –27.0 –4.4 –2.3 –6.7

TAX ATTRIBUTABLE TO OTHER COMPREHENSIVE INCOME

2010 2009 Before After Before After Parent Company tax Tax tax tax Tax taxTrans. diff. for yearon translation of foreign operations - - - 1.1 –0.3 0.8Other comprehensive income - - - 1.1 –0.3 0.8

INCOME TAX ITEMS RECOGNISED SEPARATELY IN EQUITY

2010 2009 Before After Before After Parent Company tax Tax tax tax Tax taxCurrent tax in Group contributions received/ paid 12.8 –3.3 9.5 17.3 –4.6 12.7

RECOGNIZED IN STATEMENT OF FINANCIAL POSITIONDeferred tax assets and liabilities

Deferred Deferred

tax asset Income tax liability NetGroup 2010 2009 2010 2009 2010 2009Property, plant and equipment –0.9 - 10.9 9.4 –11.8 –9.4Intangible assets 0.4 - –0.3 - 0.7 -Inventories 0.1 - - - 0.1 -Interest-bearing liabilities - - 0.3 –2.1 –0.3 2.1Pension provisions 0.6 0.5 - - 0.6 0.5Other provisions 0.4 - - - 0.4 -Financial instruments - - - –0.1 - 0.1 Tax loss carry-forwards 0.6 0.5 0.6 - - 0.5Tax assets/liabilities, net 1.2 1.0 11.5 7.2 –10.3 –6.2

NOT 10. INCOME TAXES RECOGNISED IN THE INCOME STATEMENT

Group 2010 2009Current tax expense Tax expense for the period –5.9 –8.9Adjustment of tax attributable to previous years –0.1 - –6.0 –8.9 Deferred tax expense Deferred tax assets for temporary differences and loss carry-forwards –4.3 –2.8Total recognised tax expense in the Group –10.3 –11.7

Parent Company 2010 2009Current tax income Tax income for the period 2.2 2.9Total recognised tax income in the Parent Company 2.2 2.9

RECONCILIATION OF EFFECTIVE TAX

Group 2010 2009Profit before tax 24.2 38.9Tax as per current tax rate for the Parent Company 6.4 10.2Effect of other tax rates for foreign subsidiaries* 0.1 1.1Non-deductible costs 0.7 0.4Non-taxable revenues –0.3 -Increase in tax loss carry-forwards without corresponding capitalisation of deferred tax 3.4 -Use of tax loss carry-forwards not previously used –0.1 -Tax attributable to previous years 0.1 -Recognised effective tax 10.3 11.7 * Tax as per current tax rate is calculated as a weighted average of local tax rates for the country concerned.

Parent Company 2010 2009Profit before tax 10.9 –12.0Tax as per current tax rate for the Parent Company 2.9 –3.2Non-deductible costs - 0.3Non-taxable revenues –5.1 -Recognised effective tax –2.2 –2.9


The following subsidiaries of Lammhults Biblioteksdesign A/S, Denmark have uncapitalised tax loss carry-forwards: BC Interieur S.A.R.L., France, (totalling SEK 4.3 m, with unlimited rolling facil-ity), Bibliotecas BCI SA, Spain (totalling SEK 1.4 million, with 15-year rolling facility), IFBD GmbH, Germany (totalling SEK 0.8 m with unlimited rolling facility) and NBLC Systemen, Netherlands (totalling SEK 0.6 m with 9-year rolling facility).

Scandinavian Eyewear AS, Norway, a subsidiary of Scandinavian Eyewear AB, Sweden, has uncapitalised tax loss carry-forwards of SEK 6.8 m with an unlimited rolling facility.

PARENT COMPANYThe Parent Company does not have any deferred tax assets or any deferred tax liabilities. No deferred taxes attributable to participations in Group and associated companies have been reported.

NOTE 11. BUSINESS COMBINATIONS HARMONIE PROJECTSOn 21 January 2010, Schulz Speyer Bibliothekstechnik AG acquired the library operation of Harmonie Projects Srl, estab-lishing a new company for this business. The fixed purchase con-sideration was SEK 4.5 m and was paid in cash. In addition, a conditional purchase consideration, estimated at SEK 1.2 m, may become payable. Harmonie Projects is Schulz Speyer's dealer in Italy. The company's business concept is to sell library systems, plus complementary specialist products from local suppliers. The acquisition secured our market leading position in the library market in Italy. The former main owner and President of Harmonie Projects is continuing to work at the new company, which has five permanent employees and is based at Merano, Italy.

IMPACT OF THE ACQUISITION OF HARMONIE PROJECTS IN 2010In 2010, the library business of Harmonie Projects had sales of SEK 18.9 m. During the year, the subsidiary charged SEK 0.7 m to the Group’s operating profit and SEK 0.5 m to the Group's profit after tax. The business was affected by the economic instability in Italy caused by deficits in the public finances. However, order bookings were high at year-end, at SEK 12.0 m. On the basis of Harmonie Projects’ operating profit for the 01/01/2010 – 31/12/2011 period, the former owner is able to claim a conditional purchase consider-ation. At an operating profit of less than EUR 0.3 m, no condition-al purchase consideration is paid. At an operating profit of EUR 0.3 m, a conditional purchase consideration of EUR 0.120 m is paid. At an operating profit in the range of EUR 0.3 m – EUR 1.2 m, an add-on purchase consideration amounting to 50% of the operating profit above EUR 0.3 is payable. At an operating profit above EUR 1.2 m, an add-on purchase consideration amounting to 30% of the operating profit above EUR 1.2 is payable.

The library sector is in a phase of rapid expansion and a number of trends are identifiable. Libraries are being centralised and are becom-ing bigger. New libraries have become municipal symbols, and high design values and architectural ambitions are very often in play when new libraries are built. Libraries are being transformed from places where people borrow books into locations for meeting and socialis-ing. All of these trends and the fact that order bookings were high at year-end suggest that the outlook for the company is bright. As a re-sult, there is unlikely to be any particularly major need to adjust the value of goodwill over the next few financial years.

The value of goodwill includes the value of an expanded distribution network in the library sector in Italy, greater sales potential via mar-ket-leading positions in public-sector procurement and the expertise of the personnel in the library sector. Apart from goodwill, the intan-gible asset identified at acquisition is order bookings, for which the market value was calculated at SEK 1.4 m at that point in time.

The acquisition had the following impact on the Group’s assets and li-abilities.


HARMONIE PROJECTS - NET ASSETS AT TIME OF ACQUISITION:

Fair Carrying amount, Fair value Harmonie Projects value carried before acquisition adjustment by GroupIntangible assets 0.0 1.4 1.4Inventories 0.3 - 0.3Pension provisions –0.4 - –0.4Other operating liabilities –0.2 - –0.2Deferred tax liability - –0.4 –0.4Net identifiable assets and liabilities –0.3 1.0 0.7Goodwill on consolidation 5.0Estimated total purchase consideration, cash 5.7Estimated conditional purchase consideration –1.2Payment transferred 4.5

BORKS PATENTTAVLER On 19 November, Lammhults Möbel AB acquired 100% of the shares in Borks Patenttavler A/S. The total purchase considera-tion, SEK 13.9 m, was paid in cash. Borks Patenttavler is a lead-ing supplier of blackboards in Denmark. The products are manu-factured in the company’s own factory and are sold in Denmark, the rest of Europe and the USA. The acquisition strengthens the Group’s market position in the Nordic region. Alongside the Abstracta brand, the acquisition of the Borks brand boosts the Group’s offering in the product area and creates potential synergies in, for example, purchasing, production and sales. In recent years, the company has reported sales of around SEK 50 m. It has 36 employees and is based at Kolding, Denmark. Borks’ operations consist of developing, manufacturing and marketing blackboard systems for equipping conference, assembly and educational premises, where functionality, quality and design are of paramount importance.

IMPACT OF THE ACQUISITION OF BORKS PATENTTAVLER IN 2010In 2010, the subsidiary affected the results in the following amounts: Group’s net sales SEK 2.5 m, operating profit SEK -1.2 m and profit after tax SEK -1.1 m. At year-end, order bookings totalled SEK 1.6 m. The Danish market has been weak in recent years, but we anti-cipate a gradual improvement over the next few years. By exploiting the potential for synergies with other Group companies and devel-oping new, competitive products, we can create the conditions to enable the company to develop in a positive direction. As a result, there is unlikely to be any particularly major need to adjust the val-ue of goodwill over the next few financial years.

The goodwill value includes synergies in, above all, purchasing, production and sales, as well as the competence of the personnel.

The acquisition had the following impact on the Group’s assets and liabilities.

BORKS PATENTTAVLER – NET ASSETS AT THE TIME OF ACQUISITION:

Fair Carrying amount, Fair value Borks Patenttavler value carried before acquisition adjustment by GroupProperty, plant and equipment 12.2 3.8 16.0Deferred income tax assets 0.0 0.2 0.2Inventories 9.0 –0.5 8.5Trade receivables and other receivables 6.1 - 6.1Cash and cash equivalents 0.1 - 0.1Interest-bearing liabilities –13.3 - –13.3Trade payables and other operating liabilities –8.7 –1.4 –10.1Deferred tax liability –0.4 - –0.4Net identifiable assets andliabilities 5.0 2.1 7.1Goodwill on consolidation 6.8Payment transferred 13.9

Acquisition-related expenses totalling SEK 0.4 m consist of fees to consultants in connection with due diligence. These expenses are recognised as administrative expenses in the consolidated statement of comprehensive income. If Borks Patenttavler had formed part of the Group throughout 2010, the Group’s net sales would have amounted to SEK 819.1 m, operating profit SEK 25.5 m and profit for the year SEK 12.5 m.


NOTE 12. INTANGIBLE NON-CURRENT ASSETS

Group Development Other intangible costs Brands Tenancies Goodwill non-current assets TotalAccumulated acquisition values Carrying amount, 01/01/2009 - 0.1 0.4 194.6 - 195.1Business combinations - - - 5.6 - 5.6Other investments 0.4 - - - - 0.4Exchange rate differences for the year - - - –6.0 - –6.0Carrying amount, 31/12/2009 0.4 0.1 0.4 194.2 - 195.1 Carrying amount, 01/01/2010 0.4 0.1 0.4 194.2 - 195.1Business combinations - - - 11.2 1.4 12.6Other investments 0.3 - 0.2 - - 0.5Reversal of acquired orders booked - - - - –0.9 –0.9 Exchange rate differences for the year - - –0.1 –15.2 –0.1 –15.4Carrying amount, 31/12/2010 0.7 0.1 0.5 190.2 0.4 191.9

Accumulated depreciationCarrying amount, 01/01/2010 - - - - - - Depreciation for the year - - –0.1 - - –0.1Carrying amount, 31/12/2010 - - –0.1 - - –0.1

Carrying amounts01/01/2009 - 0.1 0.4 194.6 - 195.131/12/2009 0.4 0.1 0.4 194.2 - 195.1

01/01/2010 0.4 0.1 0.4 194.2 - 195.131/12/2010 0.7 0.1 0.4 190.2 0.4 191.8 All intangible assets, other than goodwill, are amortised. For information on depreciation, see Note 1, Accounting Policies.


IMPAIRMENT TESTS FOR CASH-GENERATING UNITS CONTAINING GOODWILLThe following cash-generating units report carrying amounts for goodwill in the Group.

2010 2009Lammhults Library 113.0 123.6Lammhults Home 28.9 29.0Lammhults Office 25.0 18.3Scandinavian Eyewear 23.3 23.3 190.2 194.2

The value of the Group's intangible assets is reviewed annually through impairment tests. The recovery values of the cash-generat-ing units above are based on a number of important assumptions, as described below. Assumptions concerning future cash flows are based on 2011 budgets and the assessments for the following four years made by each company's management. The above-mentioned assumptions concern developments in sales, costs and the financial position of the cash-generating units.

The market trends for the Group's library interiors companies in Lammhults Library are that libraries are being centralised and be-coming larger, and design and architecture are becoming more and more important when new libraries are built. In addition, an in-creasing number of countries are realising the importance of in-vesting in education. These important factors are favouring the Group's units and are underpinning estimates of cash flows over the next five years. In 2010, demand weakened as a result of the economic instability in southern Europe. Profits were also nega-tively affected by non-recurring inventory impairments to har-monise and streamline the product ranges, totalling approximately SEK 4 m, and by redundancy costs totalling around SEK 2 m. Following these actions, the business area has a more efficient or-ganisation and a competitive range of products. Along with rising demand in Germany and the Middle East, this will create the condi-tions for positive growth in future cash flows.

In Lammhults Home, sales under the Voice and Ire brands are mostly to private customers, while a small proportion goes to corporate customers. The two companies together hold a strong position in the sector comprising home interiors and public environments, such as hotels. Voice has a strong product range in flat-pack furniture, while Ire is similarly well-placed in upholstered furniture, including sofas and armchairs. Together, the companies offer one of the strongest product ranges in the market, with a unique style and design, cre-ating the conditions for robust growth in the business area’s cash flows. In 2010, profitability declined as a result of a weak market for furniture and home interiors in the premium segments, and a lack of hotel projects. Profits were also negatively affected by non-recur-ring inventory impairments, totalling approximately SEK 4 m, to streamline the product range.

Scandinavian Eyewear sells spectacle frames for private consump-tion. With good design, highly efficient marketing and sales and better delivery reliability than its competitors, the company is cre-

ating the potential for strong profitability. Through continued in-vestments in these areas, combined with the business model that is effective in Scandinavia and is also spreading to other markets, the conditions are in place for further favourable growth in the com-pany's cash flows. During the year, a successful restructuring pro-gramme was completed. In combination with proactive initiatives, this resulted in improved profitability. The brand portfolio has been expanded through licensing agreements signed with three Scan-dinavian brands, Lexington, Pilgrim and Oscar Jacobson, sales of which brands began with full effect from the start of the second half of 2010. Along with the marketing programme in North America, which has increased sales from SEK 0.1 m to SEK 7.1 in two years, these activities are paving the way to substantial growth in cash flows from now on.

Because the major share of Lammhults Office sales is made to com-panies, the business is sensitive to the economic cycle, and there is considerable dependence on growth in the Swedish market as this market accounts for nearly 60% of sales. Following a sharp deterioration in the economy in 2009, leading to major cost cut-backs mainly in the form of personnel reductions, demand in 2010 stabilised at a relatively low level. In the years immediately ahead, demand is expected to rise. In combination with export market initiatives in progress and development of new products, this offers assurance of healthy development over the next few years.

The cash flows forecast after the first five years are based on an an-nual rate of growth of 2%, which is considered to correspond to the long-term rate of growth in the units' markets. The discount interest rates before tax used at year-end 2010 are 15.3% (15.3) for equity financing and 4.3% (4.3) for debt financing for Lammhults Library and Lammhults Home. In the case of Scandinavian Eyewear, the discount interest rates before tax are 16.3% (15.3) for equity finan-cing and 4.3% (4.3) for debt financing. At Lammhults Office, the discount interest rates before tax are 14.3% (15.3) for equity finan-cing and 4.3% (4.3) for debt financing. The different risk premiums applied for the various business areas are based on the stability of historical profitability. Long-term financing of the working capital for all the above-mentioned units has been estimated at 60% for equity and 40% for loans. The Company's management takes the view that no reasonably anticipated changes in the important assump-tions will result in the estimated recovery values for the units falling below their carrying amounts.


NOTE 13. PROPERTY, PLANT AND EQUIPMENT

Machinery and Equipment Buildings other technical tools and Work in Group and land facilities installations progress TotalAccumulated acquisition values Carrying amount, 1 January 2009 164.7 82.9 79.0 1.5 328.1Acquired via business combinations - – 0.5 - 0.5New acquisitions 6.3 3.6 6.4 1.0 17.3 Reclassifications - – – –0.1 –0.1Disposals and retirements - –0.1 –0.6 - –0.7Exchange rate differences –0.9 –0.4 –0.3 - –1.6Carrying amount, 31 December 2009 170.1 86.0 85.0 2.4 343.5 Carrying amount, 1 January 2010 170.1 86.0 85.0 2.4 343.5Acquired via business combinations 14.8 0.6 0.6 - 16.0New acquisitions 0.3 2.3 5.9 1.0 9.5Reclassifications - 0.1 –0.1 –2.2 –2.2Disposals and retirements - –0.3 –0.1 - –1.3Exchange rate differences –2.8 –0.6 –0.8 –0.2 –4.4Carrying amount, 31 December 2010 182.4 88.1 89.6 1.0 361.1 Accumulated depreciation and impairments Carrying amount, 1 January 2009 –61.2 –64.4 –61.2 - –186.8Depreciation for the year –4.6 –4.1 –7.4 - –16.1Carrying amount, 31 December 2009 –65.8 –68.5 –68.6 - –202.9 Carrying amount, 1 January 2010 –65.8 –68.5 –68.6 - –202.9Depreciation for the year –4.3 –4.2 –5.9 - –14.4 Disposals and retirements - 0.3 0.7 - 1.0Carrying amount, 31 December 2010 –70.1 –72.4 –73.8 - –216.3

Carrying amounts1 January 2009 103.5 18.5 17.8 1.5 141.331 December 2009 104.3 17.5 16.4 2.4 140.6

1 January 2010 104.3 17.5 16.4 2.4 140.631 December 2010 112.3 15.7 15.8 1.0 144.8


TAXABLE VALUES

Group 31/12/2010 31/12/2009Taxable values, buildings (Sweden) 34.5 34.5Taxable values, land (Sweden) 6.4 6.4

Equipment, tools Parent Company and installationsAccumulated acquisition values Carrying amount, 1 January 2009 0.9New acquisitions 0.1Carrying amount, 31 December 2009 1.0 Carrying amount, 1 January 2010 1.0New acquisitions 0.0 Disposals and retirements –0.3Carrying amount, 31 December 2010 0.7 Accumulated depreciation Carrying amount, 1 January 2009 –0.4Depreciation for the year –0.2Carrying amount, 31 December 2009 –0.6 Carrying amount, 1 January 2010 –0.6Depreciation for the year –0.1 Disposals and retirements 0.2Carrying amount, 31 December 2010 –0.5 Carrying amounts 1 January 2009 0.531 December 2009 0.4 1 January 2010 0.431 December 2010 0.2

Depreciation is distributed over the following lines in the income statement.

Group 2010 2009Cost of goods sold –11.4 –11.6Cost of sales –1.2 –1.4Administrative expenses –1.9 –3.1 –14.5 –16.1

Parent Company 2010 2009Administrative expenses –0.1 –0.2

FINANCIAL LEASING Group Equipment held under financial lease contracts is accounted for at a carrying amount of SEK 4.6 m (2.6). The Group leases production and IT equipment under a large number of separate financial lease contracts. Index-linking clauses occur in these lease contracts. The leased assets serve as collateral for the lease liabilities. The lease contracts include restrictions as regards the possibilities of paying dividend, raising new loans and entering into new lease contracts.


NOTE 14. PARTICIPATIONS IN JOINT VENTURES

Group 2010 2009Income 15.9 16.0Expenses –15.6 –15.0Profit 0.3 1.0

Non-current assets 0.2 0.1Current assets 4.5 6.1Total assets 4.7 6.2

Long-term liabilities 0.2 0.3Current liabilities 2.2 3.0Total liabilities 2.4 3.3Net assets 2.3 2.9 The Group has a 50% stake in the joint venture company BS Euro-bib AS. The company's principal operations consist of the sale of library interiors. Its registered office is in Oslo, Norway. The share-holding is recognised using the proportional method of accounting, as this provides a more accurate picture of the Group's share of the company's operations.

NOTE 15. FINANCIAL INVESTMENTS

Group 31/12/2010 31/12/2009Accumulated acquisition values At beginning of the year 4.1 4.1 Purchasing 0.3 -Exchange rate differences –0.5 -Carrying amount at end of period 3.9 4.1

NOTE 16. INVENTORIES

Group 31/12/2010 31/12/2009Raw materials and consumables 52.3 47.5Work in progress 16.8 18.5Finished products and goods for resale 75.0 81.8Carrying amount at end of period 144.1 147.8

NOTE 17. TRADE RECEIVABLES Trade receivables are recognised after taking account of bad debt losses incurred during the year, which totalled SEK 1.9 m (3.0) in the Group. No bad debt losses were incurred by the Parent Company.

NOTE 18. CASH AND CASH EQUIVALENTS

Group 31/12/2010 31/12/2009Cash and cash equivalents are made up of the following items: Cash and bank balances 47.2 60.4Balance on Group account with Parent Company 26.2 9.8Total as per Statement of Financial Position and Statement of Cash Flows 73.4 70.2


NOTE 19. EQUITY DIVIDENDAfter the balance sheet date the Board of Directors proposed the following dividend. The dividend will be submitted to the AGM for approval on 28 April 2011.

2010 2009Total dividend, SEK m 8.4 12.7Recognised dividend per share, SEK 1.00 1.50

EQUITY MANAGEMENTThe Group's financial objective is to maintain a sound capital structure and financial stability that maintains the confidence of investors, lenders and the market and establishes a foundation for continued development of its business operations. Against that back-ground, the Group's goals for debt/equity ratio have been set at the range of 0.7-1.0 and for equity/assets ratio at no less than 35%. The outcomes on 31/12/2010 were 0.56 (0.47) for the debt/equity ratio and 49.6% (52.4) for the equity/assets ratio. Equity is defined as the sum of shareholders' equity. The Group's equity totalled SEK 369.3 m (395.1) and the Parent Company's equity SEK 266.5 million (256.6).

The Board of Directors' ambition is to maintain a balance between high yield, which can be achieved through higher borrowing, and the benefits and security offered by a sound capital structure. The financial goal of the Group over an economic cycle is to obtain a return of no less than 20% on capital employed. In 2010, the return on capital employed was 4.7% (8.0).

The Group's policy is to pay a dividend, taking into account the long-term capital requirement, totalling approximately 40% of profit after tax. The Board of Directors proposes a dividend of SEK 1.00 per share, corresponding to 61% of profit after tax, to the 2011 AGM. Over the past five years, the total dividend has averaged 51% of profit after tax. The Group will also pay an additional dividend when the capital structure and operational financing requirements allow. Decisions on additional dividend reflect an ambition to dis-tribute to the shareholders funds that are not deemed necessary for the Group’s development. The Group has paid additional dividends over and above ordinary dividends on two occasions – in 2006 and 2007.

As in the preceding year, the Board of Directors proposes that the AGM should approve the issue of eight hundred thousand new shares to finance future acquisitions.

No changes took place during the year with regard to the Group’s equity management. Neither the Parent Company nor any of the subsidiaries are subject to external equity require-ments.

NOTE 20. EARNINGS PER SHARE

2010 2009Earnings per share Profit for the period 13.9 27.2Weighted number of ordinary shares outstanding 8.4 8.4Earnings per share before and after dilution 1.65 3.22

INSTRUMENTS THAT MAY RESULT IN FUTURE DILUTIONIn 2009, the Company launched a warrant programme compris-ing 35,000 warrants. In the programme, each warrant entitles the holder to subscribe one new class B share, of which share the redemption price (SEK 50.00 per share) exceeded the average price for ordinary shares. These warrants therefore do not rep-resent any potential dilution effect and have been omitted from the calculation of earnings per share after dilution. If the market price should in future rise to a level above the redemption price, these warrants will result in dilution.

NOTE 21. INTEREST–BEARING LIABILITIES This note provides information about the Company's contractual conditions regarding interest-bearing liabilities. For further information about the Company's exposure to interest risk and the risk of exchange rate fluctuations, see Note 26.

Group 31/12/2010 31/12/2009Non-current liabilities Bank loans with maturity 1-5 years from balance sheet date 56.4 58.5Bank loans with maturity date more than 5 years from the balance sheet date 32.4 34.0 88.8 92.5Current liabilities Bank overdraft facility 99.7 62.2Current portion of bank loans 20.1 31.7 119.8 93.9Total interest-bearing liabilities 208.6 186.4

FINANCIAL LEASING LIABILITIESThe Group's liabilities under financial lease contracts total SEK 4.6 m (2.6). Liabilities under financial lease contracts in the Group consist of future leasing charges arising from contracts under financial leasing. Leasing charges that are due within one year are recognised as current liabilities.


NOTE 22. LIABILITIES TO CREDIT INSTITUTIONS

Parent Company 31/12/2010 31/12/2009Non-current liabilities Bank loans with maturity 1–5 years from balance sheet date 12.4 25.6 Current liabilities Bank overdraft facility 91.5 62.2Current portion of bank loans 13.3 17.4 104.8 79.6

NOTE 23. PENSIONS DEFINED-BENEFIT PENSION PLANSPart of Scandinavian Eyewear’s and Ire Möbel’s retirement pension and family pension commitments have been secured through pension provisions on the balance sheet that are insured with FPG/PRI. This is a defined-benefit pension plan and the provision at the end of 2010 amounted to SEK 2.6 m (2.5) and SEK 0.4 m (0.4), respectively. Commitments for retirement pensions and family pensions for other salaried employees in Sweden are secured through an insurance policy with Alecta. According to a state-ment (UFR 3) from the Swedish Financial Reporting Board, this is a defined-benefit plan jointly operated by several employers. For the 2010 financial year, the Company has not had access to the information required to enable it to account for this plan as a defined-benefit plan. As a result, the pension plan under the ITP (Supplementary Pension for Salaried Employees in Industry and Commerce) scheme, secured through an insurance policy with Alecta, is reported as a defined-contribution plan. The year's charges for pension insurance policies contracted with Alecta amount to SEK 3.9 m (3.9). Surpluses at Alecta may be allocated to policyholders and/or the insured. At the end of 2010, Alecta's surplus, expressed as the collective consolidation ratio, amounted to 146% (141). The collective consolidation ratio is made up of the market value of Alecta's assets as a percentage of the insurance commitments, calculated on the basis of Alecta's actuarial assumptions, which do not correspond to IAS 19.

DEFINED-CONTRIBUTION PENSION PLANSIn Sweden, the Group operates defined-contribution pension plans for its employees; the plans are paid for entirely by the companies concerned. Outside Sweden, defined-contribution pension plans are operated, paid for partly by the subsidiaries and partly by charges paid by the employees. Payment into these plans is made on an ongoing basis as required by the rules apply-ing to the particular plan.

Group Parent Company 2010 2009 2010 2009Costs of defined-contribution pension plans 12.0 13.0 1.1 1.1

PENSION OBLIGATIONSBC Interieur SARL, France, is subject to a pension obligation for which the company, under GAAP France, does not make provision. The pension obligation comes into force only if the employees are still with the company at the age of 65 years. According to IFRS, provision is required to be made on the basis of an assessment of the probability that the pension obliga-tion will come into effect. The Group has made provision for its pension commitment in the amount of SEK 0.6 m (0.0). NOTE 24. OTHER PROVISIONS

Group 31/12/2010 31/12/2009Guarantee commitments at Lammhults Möbel AB, Sweden 0.3 0.3Severance payment at Seven S.R.L., Italy 3.7 3.8 Claims at Borks Patenttavler A/S, Denmark 1.4 - 5.4 4.1

NOTE 25. ACCRUED EXPENSES AND DEFERRED INCOME

Group Parent Company 31/12/2010 31/12/2009 31/12/2010 31/12/2009Accrued personnel- related costs 22.8 23.6 2.2 2.1Other items 10.4 20.7 1.8 2.2 33.2 44.3 4.0 4.3


NOTE 26. FINANCIAL RISKS AND FINANCIAL POLICIES

By the nature of its business operations, the Lammhults Design Group is exposed to various kinds of financial risks. Financial risks refer to fluctuations in the Company’s profits and cash flow as a result of fluctuations in exchange rates and changes in interest rate, refinancing and credit risks. The Group's policies and guide-lines for management of financial risks have been prepared by the Board of Directors and constitute a framework for its financial operations. The responsibility for the Group's financial transactions and risks is managed centrally by the Group's management team. The overall objective is to provide cost-efficient financing and to minimise negative impact on the Group's results through market fluctuations.

LIQUIDITY RISKSLiquidity risk refers to the risk of the Group encountering prob-lems with fulfilling its obligations relating to financial liabilities. The aim is that the Group should be capable of meeting its fin-ancial commitments both during upturns and downturns with-out major unforeseen costs and without jeopardising the Group's reputation. According to a resolution by the Board of Directors, the Group's liquidity margin, in the form of cash and cash equivalents and unused bank overdraft facilities, must represent no less than 10% of total assets. At year-end, the Group’s liquidity margin was 14.1% (16.0). The Group strives to minimise its borrowing re-quirement by employing excess liquidity in the Group via cash pools set up by the Parent Company's financial control function. Cash pools are operated in the following currencies: SEK, EUR, DKK, USD and NOK. Liquidity risks are managed centrally, on behalf of the entire Group, by the Parent Company's financial control function.

The maturity structure of financial liabilities included in net financial debt is illustrated in the table below. The table shows carrying amounts where anticipated interest payments are not included.

FINANCIAL LIABILITIES

Group 2011 2012 2013 2014 2015– TotalBank loans 20.1 22.4 12.1 7.5 7.5 69.6Overdraft facilities 99.7 - - - - 99.7Total financial liabilities 119.8 22.4 12.1 7.5 7.5 169.3

CREDIT RISKSCommercial credit risk covers customers' payment capacity, and is managed by the respective subsidiary through careful monitoring of payment reliability, by following up customers' financial reports and via continuous communication. Customers' creditworthiness is checked by collecting information about their financial position from various credit agencies. To minimise credit risks, the Group's companies use letters of credit, bank guarantees, credit insurance and advance payments from customers. In the case

of major projects, payment flows prior to delivery are hedged. There was no significant concentration of credit exposure on the balance sheet date. MARKET RISKSMarket risk is defined as the risk that the fair value of, or future cash flows from, a financial instrument may vary as a result of changes in market prices. IFRS classifies market risks into three categories: currency risk, interest risk and other price risks. The principal market risks that affect the Group are interest risks and currency risks.

INTEREST RISKSInterest risk is the risk that the value of a financial instrument may vary as a result of changes in market interest rates. The Group's net financial items and results are affected by fluctuations in interest rates. The Group is also indirectly affected by the influence of interest rates on the economy in general. The Lammhults Design Group believes that short-term fixing of interest rates is compatible with the Group's operations, from a risk per-spective. On that basis, the majority of the Group's loans are taken up at variable interest rates. Variable rates of interest have also often been lower than long-term rates in recent years, which has had a positive effect on the Group's profit. Management of the Group's exposure to interest rates is centralised, i.e. the Group's management is charged with identifying and handling such exposure. The Company's interest-bearing liabilities amounted to SEK 208.6 m (186.4) at year-end. Of these interest-bearing liabilities, SEK 207.1 m (186.0) has a variable rate of interest and SEK 1.5 m (0.4) a fixed rate of interest. An EUR loan to finance the acquisition of Schulz Speyer (add-on purchase consideration) amounted at year-end to SEK 11.2 m (15.7) and is a variable-rate loan. The loan is capped at 5.5% and has a minimum rate of 3.4%. The Group also has a variable rate EUR loan, to finance a building, amounting to SEK 7.9 m (10.4) at year-end. The loan has an interest rate cap ensuring that the interest will never exceed 5.0%.

CURRENCY RISKSThe risk that fair values and cash flows relating to financial instru-ments may fluctuate when the value of foreign currencies changes is known as currency risk. The Group is exposed to various types of currency risks. The primary exposure concerns purchases and sales in foreign currencies, where the risk may consist partly of fluctuations in the currency of a financial instrument or customer or supplier invoice, and partly of the currency risk in anticipated or contracted payment flows; this is known as transaction exposure. Currency risk fluctuations also exist in the translation of the assets and liabilities of foreign subsidiaries to the Parent Company's functional currency; this is known as translation exposure. Another area that is vulnerable to currency risks is that represented by payment flows in loans and investments in foreign currencies.

TRANSACTION EXPOSUREThe Group's invoicing to markets outside Sweden amounted to SEK 504.6 m (535.6) during the year. Invoicing in foreign cur-rencies totalled SEK 467.2 m (525.0), as set out below.


INVOICING IN FOREIGN CURRENCIES (TRANSLATED TO SEK)

2010 2009Currency Amount % Amount %EUR 277.9 60 315.7 60DKK 79.8 17 104.8 20NOK 62.6 13 70.3 13USD 12.0 3 9.9 2Other foreign currencies 34.9 7 24.3 5Total 467.2 100 525.0 100

The Group's purchases in foreign currencies totalled SEK 235.4 m (278.1), as set out below. PURCHASES IN FOREIGN CURRENCIES (TRANSLATED TO SEK)

2010 2009Currency Amount % Amount %EUR 140.6 60 143.8 52USD 39.3 16 26.7 10DKK 29.8 13 66.0 24NOK 17.0 7 17.6 6Other foreign currencies 8.7 4 24.0 8Total 235.4 100 278.1 100

The Group's aim is, by use of forward contracts, to limit the currency risks to which it is exposed in connection with future payment flows. Using the best possible information regarding future flows, ap-proximately 50% of anticipated net flows for the next 12 months are hedged. The Group has applied IAS 39 since 1 January 2005. The forward contracts that the Group uses to hedge forecast transactions are classified as cash flow hedges. Changes in the fair value of forward contracts are therefore recognised in equity. At year-end 2010, forward contracts showed a surplus of SEK 1.0 m, compared to a deficit of SEK 0.2 m at the preceding year-end.

TRANSLATION EXPOSUREIn normal circumstances, the Group does not seek protection for its translation exposures in foreign currencies. However, for the ac-quisitions of the shares outstanding in Lammhults Biblioteksdesign A/S (formerly BCI) in 2002, in Schulz Speyer in 2006 and in Borks Patenttavler in 2010, the Parent Company raised loans in DKK and EUR, respectively, to hedge its currency exposures. The currency difference on these loans for the year amounts to SEK 6.0 m (4.4) and has been taken directly to equity. For more on how translation exposure is treated in the accounts, see Note 1 Accounting policies, Hedging of net investments in a foreign operation.

SENSITIVITY ANALYSISIn order to manage interest and currency risks, the Group’s aim is to minimise the effects of short-term fluctuations in the Group’s results. In the long term, however, lasting changes in exchange rates and interest rates will impact on the consolidated profit/loss. As per 31 December 2010, it is estimated that a general rise of 1% in inter-est rates will reduce the Group's profit before tax by approximately SEK 1.4 m (1.2). It is estimated that a general rise of 1% of the SEK

against other currencies in 2010 reduced the Group's gross profit by approximately SEK 2.3 m (2.5) and pre-tax profit by around SEK 1.2 m (1.4). Changes in the value of currency forward contracts are dis-regarded in this estimate. NOTE 27. MEASUREMENT OF FINANCIAL ASSETS

AND LIABILITIES AT FAIR VALUE FAIR VALUEFair value is the amount at which an asset could be transferred or a liability settled between knowledgeable parties who are inde-pendent of each other and who have an interest in the transaction being carried out.

Fair value and recognised value are shown in the statement of financial position below:

Carrying Fair Carrying Fair amount value amount value Group 2010 2010 2009 2009Currency forward contracts (receivables) 1.3 1.3 - -Financial investments 3.9 3.9 4.1 4.1Accounts receivable 147.3 147.3 165.0 165.0Other receivables 11.5 11.5 9.1 9.1Cash and cash equivalents 73.4 73.4 70.2 70.2 Currency forward contracts (liabilities) - - 0.2 0.2Bank loans 108.9 108.9 124.2 124.2Bank overdraft facility 99.7 99.7 62.2 62.2Trade payables 61.4 61.4 58.4 58.4Other liabilities 41.4 41.4 37.8 37.8

Carrying Fair Carrying Fair amount value amount value Parent Company 2010 2010 2009 2009Other receivables 0.1 0.1 0.1 0.1Cash and cash equivalents 26.3 26.3 9.9 9.9Bank loans 25.7 24.8 43.0 50.2Bank overdraft facility 91.5 91.5 62.2 62.2Trade payables 0.7 0.7 0.7 0.7Other liabilities 0.1 0.1 0.1 0.1

Investments in foreign subsidiaries have to a certain extent been hedged by the raising of foreign currency loans and the use of overdraft facilities in foreign currency. At year-end, these loans are recognised in the Group at the exchange rate prevailing on the balance sheet date, other than in the Parent Company's accounts, where the loans are recognised at the acquisition exchange rate for loans and overdraft facilities in foreign cur-rencies for the purchase of participations in Group companies.


NOTE 28. OPERATIONAL LEASING LEASE CONTRACTS WHERE THE COMPANY IS LESSEETotal lease payments without right of early termination:

Group Parent Company 31/12/2010 31/12/2009 31/12/2010 31/12/2009Lease charges for the year 5.1 5.1 - -Within a year 4.1 3.5 - -Between one and five years 5.8 5.3 - -

No lease contracts of significance to operations were entered into during the 2010 financial year. No onward leasing took place.

NOTE 29. PLEDGED ASSETS AND CONTINGENT LIABILITIES

Group Parent Company 31/12/2010 31/12/2009 31/12/2010 31/12/2009Pledged assets For own liabilities and provisions Real estate mortgages 71.9 60.0 - -Chattel mortgages 70.2 59.2 - - Net assets in subsidiaries 446.5 492.0 - -Other securities 2.4 1.1 - -Shares in subsidiaries - - 203.6 203.6Total pledged assets 591.0 612.3 203.6 203.6 A restrictive clause applies to the shares held in the subsidiary Schulz Speyer (SEK 65.4 m), according to which the Group is not permitted to pledge or assign the shares without the bank’s consent. Contingent liabilities Sundry surety bonds 3.6 3.8 3.6 3.8Warranties 1.7 1.6 - - Other contingent liabilities 0.2 0.2 - - Total contingent liabilities 5.5 5.6 3.6 3.8

Scandinavian Eyewear AB provides the major share of financing for its Scandinavian Eyewear AS subsidiary. The company has supplied a guarantee to the subsidiary’s other creditors to the effect that they will be paid before the parent company. The Parent Company has also provided a general, unconditional and absolute guarantee to the borrower Lammhults Home AB.

NOTE 30. CLOSELY RELATED PARTIES SUMMARY OF TRANSACTIONS WITH CLOSELY RELATED PARTIESOf the Parent Company's total purchases and sales measured in SEK, 4% (5) of the purchases and 100% (100) of sales pertain to other companies within the overall group of which the Company is part. The Parent Company has a close relationship with the subsidiaries stated in Note 31 and joint venture companies list-ed in Note 14. Substantial financial receivables and liabilities ex-ist between Parent Company and subsidiaries. No transactions or outstanding balances exist with the joint venture company. Trans-actions with closely related parties are priced in accordance with generally accepted market conditions.

TRANSACTIONS WITH KEY PEOPLE IN SENIOR POSITIONSThe Company’s Board Members, along with close family mem-bers and wholly- or partly-owned companies, control 42% (42) of the voting rights in the Company. Yngve Conradsson controls 25.8% (25.8) of the voting rights through a 50%-owned company and Jerry Fredriksson and company control 16.3% (16.3) of the voting rights.

Three senior executives, who are members of Group manage-ment, are participating in the Group's warrant programme. For more information on salaries and remuneration to the Board Members and senior executives, see Note 6.

NOTE 31. PARTICIPATIONS IN GROUP COMPANIES

Parent Company 31/12/2010 31/12/2009Accumulated acquisition values At beginning of year 383.6 383.6 Accumulated impairment losses At beginning and end of the year –33.9 –33.9Carrying amount, 31 December 349.7 349.7

Any impairment losses are recognised in the income statement on the line “Result from participations in Group companies”.


SPECIFICATION OF PARENT COMPANY’S AND GROUP’S PARTICIPATIONS IN GROUP COMPANIES

31/12/2010 31/12/2009 Subsidiary/Company Reg. No./Reg. office No. of shares Proportion, % Carrying amount Carrying amountLammhults Möbel AB / 556058-2602 / Växjö 30 000 100 34.3 34.3 Borks Patenttavler A/S / 20 95 95 09 / Bjert, DenmarkLammhults Biblioteksdesign AB / 556038-8851 / Lund 50 000 100 39.8 39.8 Eurobib NV / 298997 / Schelle, Belgium Lammhults Biblioteksdesign A/S / 87 71 97 15 / Holsted, Denmark 50 000 100 73.9 73.9 BC Interieur SARL / 33058132300046 / Paris, France Bibliotecas BCI SA / ESA60923596 / Barcelona, Spain Thedesignconcept Ltd / 06482850 / Bellshill, Glasgow, United Kingdom NBLC Systemen BV / 091930810000 / Ede, Netherlands IFBD GmbH / HRB 61159 / Römerberg, GermanySchulz Speyer Bibliothekstechnik AG / HRB 2951SP / Speyer, Germany 11 250 100 65.4 65.4 Schulz Benelux BVBA / BE421869331 / Rotselaar, Belgium Schulz Österreich GmbH / FN 329275d / Vienna, Austria Harmonie Projects Srl / 02653490215 / Merano, ItalyLammhults Home AB / 556541-0700 / Jönköping 10 000 100 40.7 40.7 Ire Möbel AB / 556065-2710 / TibroExpanda Invest AB / 556535-2290 / Växjö 300 000 100 94.3 94.3 Abstracta AB / 556046-3852 / Växjö Abstracta Interiör AS / 934471881 / Oslo, Norway Scandinavian Eyewear AB / 556052-8514 / Jönköping Scandinavian Eyewear OY / 0827233-4 / Helsinki, Finland Scandinavian Eyewear AS / 982 186 625 / Oslo, Norway Scandinavian Eyewear LLC / 83-0513661 / Lakewood Colorado, USA Seven Srl / TV-0217751 / Pederobba, ItalyAtran AB / 556035-8508 / Falkenberg 6 000 100 1.1 1.1Sydostinvest AB / 556210-3498 / Växjö 1 000 100 0.2 0.2 349.7 349.7


NOTE 32. CONSOLIDATED STATEMENT OF CASH FLOWS INTEREST PAID AND DIVIDEND RECEIVED

Group Parent Company 2010 2009 2010 2009Interest received 0.8 2.0 1.3 1.6Interest paid –3.4 –7.6 –1.1 –5.5Dividend received - - 19.1 -

ADJUSTMENTS FOR NON-CASH ITEMS

Group Parent Company 2010 2009 2010 2009Depreciation 14.5 16.1 0.1 0.2Unrealised exchange differences –7.1 –4.6 2.1 1.4Profit/loss on sale of non- current assets –0.2 0.2 - -Provisions for pensions 0.4 –0.3 - -Other provisions –0.2 –0.2 - - Dividends from Group companies - - –19.1 - 7.4 11.2 –16.9 1.6

ACQUISITIONS OF SUBSIDIARIES

Group Parent Company 2010 2009 2010 2009Assets and liabilities acquired Intangible non-current assets 13.2 5.7 - -Property, plant and equipment 16.0 0.5 - -Deferred income tax assets 0.2 - - -Inventories 8.8 2.3 - -Operating receivables 6.1 3.6 - -Cash and cash equivalents 0.1 2.7 - -Total assets 44.4 14.8 - -

Pension provisions 0.4 - - -Interest-bearing liabilities 13.3 - - -Deferred tax liabilities 0.8 - - -Total provisions and liabilities 10.3 3.7 - -Total provisions and liabilities 24.8 3.7 - - Purchase consideration: Purchase consideration paid –24.1 –11.1 - -Less: Estimated conditional purchase consideration 1.2 1.1 - -Less: Cash and cash equivalents in the acquired operation 0.1 2.7 - -Effect on cash and cash equivalents –22.8 –7.3 - -

CREDITS NOT USED

Group Parent Company 2010 2009 2010 2009Total, credits not used 31.5 50.2 20.5 39.8

NOTE 33. IMPORTANT ESTIMATES AND ASSESSMENTS

The Company's management has discussed with the audit com-mittee the development, choice and disclosures relating to the Group's significant accounting policies and assessments, and the application of these policies and assessments.

SIGNIFICANT SOURCES OF UNCERTAINTIES IN ASSESSMENTS

Impairment tests for goodwillWhen computing the recovery value of cash-generating units to assess any impairment loss for goodwill, several assumptions as to future circumstances and estimates of parameters have been made. An account of these assumptions and estimates is provided in Note 12. As will be seen from this note, changes in the precon-ditions for these assumptions and estimates during 2011 could have a significant effect on the value of goodwill. However, the view is taken that no significant risk exists of any major adjust-ment of goodwill during the coming year.

Income taxesExtensive assessments are made to determine current and de-ferred tax liabilities/assets, and in particular the value of de-ferred tax assets. In this process, the Lammhults Design Group must assess the likelihood of the deferred tax assets being offset against future taxable profits. The actual outcome may differ from these assessments, for example, because of a change in the future business climate, amended tax regulations or because of the eventual result of a tax authority's or a fiscal court's as yet uncompleted examination of tax returns submitted. For more information, see Note 10.


Torbjörn BjörstrandChairman

Lotta Lundén Board member

Anders Pålsson Board member

Anders RothsteinPresident

Lammhult, 14 March 2011

Our Audit report was submitted on 14 March 2011KPMG AB

Yngve Conradsson Board member

Jerry Fredriksson Board member

Erika Lagerbielke Board member


NOTE 34. INFORMATION ABOUT THE PARENT COMPANY

Lammhults Design Group AB is a Swedish company with limited liability (Swedish: aktiebolag). Its registered office is in Växjö, Sweden. The Parent Company's Class B shares are listed on the Nordic Small Cap list of the Nasdaq OMX Nordic Exchange Stockholm. The address of the head office is Lammhults Design Group AB, Box 75, SE-360 30 Lammhult, Sweden. The consoli-dated accounts for 2010 are for the Parent Company and its sub-sidiaries, which form the Group. The Group also includes share-holdings in joint venture companies.

CERTIFICATION BY THE BOARD OF DIRECTORSThe Board of Directors and the President hereby certify that the annual accounts have been prepared in accordance with generally accepted accounting practices in Sweden, and that the consolidated accounts have been prepared in accordance with the international

accounting standards referred to in the European Parliament and Council's (EU) Directive No. 1 1606/2002 of 19 July 2002 on the application of International Accounting Standards. The an-nual accounts and the consolidated accounts provide a true and fair view of the Group's and Parent Company's position and re-sults. The Report of the Board of Directors for the Parent Com-pany and Group provides a true and fair overview of the Parent Company's and Group's operations, position and results, as well as significant risks and factors of uncertainty to which the Parent Company and the companies included in the Group may be exposed.

The annual accounts and consolidated accounts were, as indi-cated above, approved for issue by the Board of Directors on 14 March 2011.


We have audited the annual accounts, the consolidated accounts, the accounting records and the administration by the Board of Directors and the President of Lammhults Design Group AB (publ) for the year 2010. The Company's annual accounts and consolidated financial statements are included in the printed version of this document, on pages 61-103. These accounts and the administration of the company are the responsibility of the Board of Directors and the President, who shall also ensure that the Annual Accounts Act be applied when preparing the annual accounts and that the International Financial Reporting Standards (IFRS), as adopted by the European Union, and the Annual accounts. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on our audit. The audit was carried out in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain high but not absolute assurance that the annual accounts and the consolidated accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the Board of Directors and the President and significant estimates made by the Board of Directors and the President when preparing the annual accounts and the consolidated accounts as well as evaluating the overall presentation of information in the annual accounts and the consolidated accounts. As a basis for our opinion concerning dis-

charge from liability, we examined significant decisions, actions taken and the circumstances of the Company in order to be able to determine the liability, if any, to the company of any Board member or the President. We also examined whether any board member or the President has, in any other way, acted in contra-vention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that our audit gives us reason-able grounds for the following statements. The annual accounts have been prepared in accordance with the Annual Accounts Act and, thereby, give a true and fair view of the company's financial position and results of operations in accordance with generally accepted accounting principles in Sweden. The consolidated accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union, and the Annual Accounts Act, and give a true and fair view of the Group's financial position and results of operations. The report is consistent with the other parts of the annual accounts and the consolidated accounts. We recommend to the Annual General Meeting of Sharehold-ers that the income statement and balance sheets of the Parent Company and the income statement and the statement of finan-cial position of the Group be adopted, that the profit be dealt with in the Parent Company in accordance with the proposal in the Report of the Board of Directors and that the members of the Board of Directors and the President be discharged from liability for the financial year.

AUDITOR’S REPORT

Växjö, 14 March 2011KPMG AB


To the Annual General Meeting of Shareholders in Lammhults Design Group AB (publ) Corp. Reg. No. 556541-2094

LAMMHULTS DESIGN GROUP ABLammengatan 2, Box 75SE-360 75 LammhultSWEDEN

Tel: +46 (0)472 26 96 70 Fax: +46 (0)472 26 96 73

www.lammhultsdesigngroup.com

DESIGN AND PRODUCT ION GRAND PUBLIC

Photo: Marcel Pabst, Patrik Johäll, Pelle Wahlgren, Sam Sylvén a n d others. Reprographics and printing: Vettertryck AB, Jönköping 2011

LAMMHULTS OFFICE

LAMMHULTS MÖBEL AB Växjövägen 41SE-360 75 LammhultSWEDEN

Tel: +46 (0)472 26 95 00Fax: +46 (0)472 26 05 70 www.lammhults.sewww.abstracta.se

BORKS PATENTTAVLER ASSkartved Vestervej 1DK-6091 BjertDENMARK

Tel: +45 75 52 40 00Fax: +45 75 53 04 21

www.borks.dk

LAMMHULTS HOME

LAMMHULTS HOME AB Betavägen 17SE-556 52 Jönköping SWEDEN

Tel: +46 (0)36 31 83 00Fax: +46 (0)36 31 83 05

www.voice.eu

IRE MÖBEL ABFabriksgatan 5SE–543 50 TibroSWEDEN Tel: +46 (0)504 191 00Fax: +46 (0)504 156 75

www.iremobel.se

LAMMHULTS LIBRARY

LAMMHULTS BIBLIOTEKSDESIGN AB Åkergränden 7SE–226 60 LundSWEDEN

Tel: +46 (0)46 31 18 00Fax: +46 (0)46 32 05 29

www.lammhultsbiblioteksdesign.se

LAMMHULTS BIBLIOTEKSDESIGN A/SDalbækvej 1DK-6670 HolstedDENMARK

Tel: +45 76 78 26 11 Fax: +45 76 78 26 22

www.lammhultsbiblioteksdesign.dk

SCHULZ SPEYER BIBLIOTHEKSTECHNIK AGFriedrich-Ebert-Strasse 2aDE-67346 SpeyerGERMANY

Tel: +49 6232 3181 0Fax: +49 6232 3181 700

www.schulzspeyer.de

HARMONIE PROJECT GMBH-SRLVia Armonia 24I-39012 Meran/Merano (BZ) ITALYTel.: +39 473 21 24 24Fax: +39 473 21 24 48

www.harmonie.it

SCANDINAVIAN EYEWEAR

SCANDINAVIAN EYEWEAR AB Soldattorpsgatan 3SE-554 74 Jönköping SWEDEN

Tel: +46 (0)36 30 53 00Fax: +46 (0)36 30 53 10

www.scandinavianeyewear.se

SEVEN SRLVia Cal Lusent 61I-31040 Pederobba (TV)ITALY

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www.lammhultsdesigngroup.com

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LAMMHULTS OFFICE LAMMHULTS LIBRARY - Lammhults Design … · Mobi Abstracta. Design: Andrea Ruggiero. 4 LAMMHULTS DESIGN GROUP SEK 39 million higher and the proﬁt after ﬁnancial