INTERNATIONAL OFFERING MEMORANDUM CONFIDENTIAL

NOBINA AB (PUBL)

(a Swedish public limited liability company)

Offering of up to 61,821,582 ordinary shares

is o#ering memorandum relates to the initial public o#ering between $%,%&',()( and (%,*+%,$*+ common shares, each with a quota value of SEK -.() (the “ O er ”) of Nobina AB (publ) (the “ Company ”). e Company is o#ering such number of new common shares, not to exceed +$,1$1,$1( (the “ New Shares ”), as will raise gross proceeds of SEK *$) million, and the selling shareholders, including funds advised by Sothic Capital Management LLP (“ Sothic Capital ”), BlueMountain Capital Management, LLC, Invesco Senior Secured Management Inc (“ Invesco ”), Anchorage Capital Group, L.L.C. (“ Anchorage ”), BlueCrest Multi Strategy Credit Master Fund Limited, Ironshield Capital Management LLP, Gladwyne Investments LLP, Kite Lake Capital Management (UK) LLP and Magnolia Road Capital LP (collectively, the “ Selling Shareholders ”) are o#ering between +',*'',()( and -(,)(&,))( existing common shares (the “ Existing Shares ” and, together with the New Shares, the “ Firm Shares ”). Sothic Capital, Anchorage and Invesco have granted the Joint Global Coordinators, on behalf of the Joint Bookrunners (as de2ned herein) an option (the “ Over-Allotment Option ”), exercisable in whole or in part for -) calendar days following the date on which the shares commence trading on Nasdaq Stockholm, to purchase up to 1,&%*,$') additional existing common shares (the “ Option Shares ”) at the o#er price, to cover potential over-allotments or short positions, if any, incurred in connection with the O#er. See “ e O#ering .” e Firm Shares and, if any are sold pursuant to the Over-Allotment Option, the Option Shares, shall be referred to as the “ O er Shares ” and the term “ shares ” shall refer to all outstanding shares of the Company at any given time. is O#er consists of: (i) an o#er to the public in the Kingdom of Sweden; and (ii) private placements to institutional investors in various jurisdictions, including a private placement in the United States to persons who are “quali2ed institutional buyers” or “ QIBs ” as de2ned in, and in reliance on, Rule %&&A (“ Rule #$$A ”) or another available exemption from the registration requirements under the U.S. Securities Act of %'--, as amended (the “ Securities Act ”). All o#ers and sales outside the United States will be made in compliance with Regulation S (“ Regulation S ”) under the Securities Act. Prior to the O#er, there has been no public market for the shares. Application has been made for the shares to be admitted to trading and listing on Nasdaq Stockholm under the trading symbol “NOBINA”. e 2rst day of trading in, and the listing of, the shares is expected to be %* June +)%$. Investing in the Offer Shares involves risks. See Risk Factors beginning on page  for a discussion of certain risks prospective investors should consider before investing in the Offer Shares. e o#er price is expected to be set within the range set forth below. e o#er price is expected to be announced publicly on or around %* June +)%$.

O er Price Range: SEK %% to SEK $& per O er Share

'is O ering Memorandum does not constitute an o er to sell, or the solicitation of an o er to purchase, any of the O er Shares in any jurisdiction from any person to whom it would be unlawful to make such an o er in such a jurisdiction. 'e O er Shares have not been and will not be registered under the Securities Act or any securities laws of any state within the United States, and may be o ered and sold in the United States only to QIBs in reliance on Rule #$$A or pursuant to another available exemption from, or a transaction not subject to, the registration requirements under the Securities Act, and o ered and sold outside the United States only in compliance with Regulation S under the Securities Act. Prospective investors are hereby noti(ed that sellers of the Company’s shares may be relying on the exemption from the registration requirements of the Securities Act provided by Rule #$$A. For a description of certain restrictions on o ers or sales, and on resale or transfer of the Company’s shares, see “ Transfer Restrictions” and “Plan of distribution—Selling restrictions .” e Joint Bookrunners expect to deliver the O#er Shares on or about +- June +)%$ through the facilities of Euroclear Sweden AB (“Euroclear Sweden ”), against payment for the O#er Shares in immediately available funds. e shares will be eligible for clearing through Euroclear Sweden.

Joint Global Coordinators and Joint Bookrunners

Joint Bookrunner

- June +)%$ is O#ering Memorandum is con2dential and is being furnished by the Company and the Selling Shareholders in connection with an o#ering exempt from registration under the Securities Act, solely for the purpose of enabling prospective investors to consider the purchase of the O#er Shares described herein. e information contained in this O#ering Memorandum has been provided by the Company and other sources identi2ed herein. No representation or warranty, express or implied, is made by the Joint Bookrunners (as de2ned below) as to the accuracy or completeness of such information, and nothing contained in this O#ering Memorandum is, or shall be relied upon as, a promise or representation by the Joint Bookrunners. e Joint Bookrunners assume no responsibility for its accuracy, completeness or veri2cation and accordingly disclaim, to the fullest extent permitted by applicable law, any and all liability whether arising in tort, contract or otherwise that they might otherwise be found to have in respect of this document or any such statement. Any reproduction or distribution of this O#ering Memorandum, in whole or in part, and any disclosure of its contents or use of any information herein for any purpose other than considering an investment in the O#er Shares hereby is prohibited. Investors agree with the Company, the Selling Shareholders and the Joint Bookrunners that each of the investors or the Company, the Selling Shareholders and the Joint Bookrunners (and each employee, representative, or other agent of the investors or the Company, the Selling Shareholders and the Joint Bookrunners) may disclose to any and all persons, without limitation of any kind, the U.S. federal tax treatment and U.S. federal tax structure of the transactions contemplated by this O#ering Memorandum. Each o#eree of the O#er Shares, by accepting delivery of this O#ering Memorandum, agrees to the foregoing. No representation or warranty, express or implied, is made by Carnegie Investment Bank AB (“ Carnegie ”), Danske Bank A/S, Danmark, Sverige Filial (“ Danske ”) (together, the “ Joint Global Coordinators ”) and Pareto Securities AB (“ Pareto ” and, together with the Joint Global Coordinators, the “ Joint Bookrunners ”), acting as Joint Bookrunners, as to the accuracy or completeness of any information contained in this O#ering Memorandum. In making an investment decision, investors must rely on their own assessment of the Company and the terms of this O#er, including the merits and risks involved. No person is or has been authorised to give any information or make any representation in connection with the o#er or sale of the O#er Shares other than those contained in this O#ering Memorandum and, if given or made, such information or representation must not be relied upon as having been authorised by the Company, the Selling Shareholders or the Joint Bookrunners and none of them accept any liability with respect to any such information or representation. Neither the delivery of this O#ering Memorandum nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the a#airs of the Company since the date of this O#ering Memorandum or that the information contained herein is correct as of any time subsequent to its date. In the event of any changes to the information in this O#ering Memorandum that may a#ect the valuation of the O#er Shares during the period from the date of announcement to the 2rst day of trading, such changes will be announced in accordance with the provisions of Chapter +, Section -& of the Swedish Financial Instruments Trading Act (%''%:'*)) (Sw. lagen ($%%$:%&') om handel med *nansiella instrument ) (the “ Trading Act ”), which, among other things, governs the publication of prospectus supplements. e distribution of this O#ering Memorandum and the o#er and sale of the O#er Shares to which it relates may be restricted by law in certain jurisdictions. No action has been or will be taken in any jurisdiction other than the Kingdom of Sweden that would permit a public o#ering of the O#er Shares, or the possession, circulation or distribution of this O#ering Memorandum or any other material relating to the Company or the O#er Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this O#ering Memorandum comes are required by the Company, the Selling Shareholders and the Joint Bookrunners to inform themselves about and to observe any such restrictions. is O#ering Memorandum does not constitute an o#er of, or an invitation to purchase, any of the O#er Shares in any jurisdiction in which such o#er or invitation would be unlawful. None of the Company, the Selling Shareholders nor the Joint Bookrunners accepts any legal responsibility for any violation by any person, whether or not a prospective investor, of any such restrictions. For a further description with regard to restrictions on o#ers and sales of the O#er Shares and the distribution of this O#ering Memorandum, see “ Transfer Restrictions ” and “ Plan of distribution— Selling restrictions .” Investors agree to the foregoing by accepting delivery of this O#ering Memorandum. IN CONNECTION WITH THIS OFFER, DANSKE, AS THE STABILISING MANAGER, OR ITS AGENTS, ON BEHALF OF THE JOINT BOOKRUNNERS, MAY ENGAGE IN TRANSACTIONS THAT STABILISE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SHARES FOR UP TO -) DAYS FROM THE FIRST DAY OF TRADING IN AND LISTING OF THE OFFER SHARES ON NASDAQ STOCKHOLM. SPECIFICALLY, THE JOINT BOOKRUNNERS MAY OVER-ALLOT SHARES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE SHARES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. THE STABILISING MANAGER AND ITS AGENTS ARE NOT REQUIRED TO ENGAGE IN ANY OF THESE ACTIVITIES AND, AS SUCH, THERE IS NO ASSURANCE THAT THESE ACTIVITIES WILL BE UNDERTAKEN; IF UNDERTAKEN, THE STABILISING MANAGER OR ITS AGENTS MAY END ANY OF THESE ACTIVITIES AT ANY TIME AND THEY MUST BE BROUGHT TO AN END AT THE END OF THE -)-DAY PERIOD MENTIONED ABOVE. SAVE AS REQUIRED BY LAW OR REGULATION, THE STABILISING MANAGER DOES NOT INTEND TO DISCLOSE THE EXTENT OF ANY STABILISATION TRANSACTIONS UNDER THE OFFER. SEE “ PLAN OF DISTRIBUTION—STABILISATION .” e Joint Bookrunners are acting for the Company and the Selling Shareholders and no one else in relation to the O#er. e Joint Bookrunners will not be responsible to anyone other than the Company and the Selling Shareholders for providing the protections a#orded to their respective clients nor for providing advice in relation to the O#er. Any o#er or sale of O#er Shares in connection with the O#er in the United States will be made by one or more broker dealers registered as such under the U.S. Securities Exchange Act of %'-&, as amended (the “ Exchange Act ”). Investors hereby acknowledge that: (i) they have not relied on the Joint Bookrunners or any person a5liated with the Joint Bookrunners in connection with any investigation of the accuracy of any information contained in this O#ering Memorandum or their investment decision; and (ii) they have relied only on the information contained in this document, and that no person has been authorised to give any information or to make any representation concerning the Company, its subsidiaries, the O#er Shares (other than as contained in this document) and, if given or made, any such other information or representation should not be relied upon as having been authorised by the Company, the Selling Shareholders or the Joint Bookrunners.

i NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED STATES e shares have not been recommended by any United States federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not con2rmed the accuracy or determined the adequacy of this O#ering Memorandum. Any representation to the contrary is a criminal o#ense in the United States. e O#er Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States, and may not be o#ered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable state securities laws. Accordingly, the O#er Shares are being: (i) o#ered and sold in the United States only to QIBs in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule %&&A or another available exemption from the registration requirements of the Securities Act; and (ii) o#ered and sold outside the United States in compliance with Regulation S under the Securities Act. For certain restrictions on the sale and transfer of the O#er Shares, see “ Transfer Restrictions” and “Plan of distribution—Selling restrictions .” In the United States, this O#ering Memorandum is being furnished on a con2dential basis solely for the purpose of enabling a prospective investor to consider purchasing the particular securities described herein. e information contained in this O#ering Memorandum has been provided by the Company and other sources identi2ed herein. Distribution of this O#ering Memorandum to any person other than the o#eree speci2ed by the Joint Bookrunners or their representatives, and those persons, if any, retained to advise such o#eree with respect thereto, is unauthorised, and any disclosure of its contents, without the Company’s prior written consent, is prohibited. Any reproduction or distribution of this O#ering Memorandum in the United States, in whole or in part, and any disclosure of its contents to any other person is prohibited. is O#ering Memorandum is personal to each o#eree and does not constitute an o#er to any other person or to the public generally to subscribe for, or otherwise acquire, the O#er Shares.

NOTICE TO NEW HAMPSHIRE RESIDENTS NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER $*#-B OF THE NEW HAMPSHIRE REVISED STATUTES (“RSA”) WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA $*#-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

NOTICE TO PROSPECTIVE INVESTORS IN THE EUROPEAN ECONOMIC AREA In any Member State of the European Economic Area (“ EEA ”) other than Sweden that has implemented the Prospectus Directive, this O#ering Memorandum is only addressed to, and is only directed at, investors in that EEA Member State who ful2l the criteria for exemption from the obligation to publish a prospectus, including quali2ed investors, within the meaning of the Prospectus Directive as implemented in each such EEA Member State. is O#ering Memorandum has been prepared on the basis that all o#ers of O#er Shares, other than the o#er contemplated in Sweden, will be made pursuant to an exemption under the Prospectus Directive, as implemented in Member States of the EEA, from the requirement to produce a prospectus for o#ers of O#er Shares. Accordingly any person making or intending to make any o#er within the EEA of O#er Shares which is the subject of the placement contemplated in this O#ering Memorandum should only do so in circumstances in which no obligation arises for the Company, the Selling Shareholders or any of the Joint Bookrunners to produce a prospectus for such o#er. Neither the Company, the Selling Shareholders nor the Joint Bookrunners have authorised, nor do they authorise, the making of any o#er of O#er Shares through any 2nancial intermediary, other than o#ers made by Joint Bookrunners which constitute the 2nal placement of O#er Shares contemplated in this O#ering Memorandum. e O#er Shares have not been, and will not be, o#ered to the public in any Member State of the EEA that has implemented the Prospectus Directive, excluding Sweden (each, a “ Relevant Member State ”). Notwithstanding the foregoing, an o#ering of the O#er Shares may be made in a Relevant Member State: t
UP
BOZ
MFHBM
FOUJUZ
UIBU
JT
B
RVBMJëFE
JOWFTUPS
BT
EFëOFE
JO
UIF
1SPTQFDUVT
%JSFDUJWF t

UP
GFXFS
UIBO
Ųűű
PS
JG
UIF
3FMFWBOU
.FNCFS
4UBUF
IBT
JNQMFNFOUFE
UIF
SFMFWBOU
QSPWJTJPO
PG
UIF
ųűŲű
1%
"NFOEJOH
%JSFDUJWF
ŲŶű
OBUVSBM
or legal persons (other than quali2ed investors as de2ned in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the Joint Bookrunners for any such o#er; or t
JO
BOZ
PUIFS
DJSDVNTUBODFT
GBMMJOH
XJUIJO
"SUJDMF
Ŵ ų
PG
UIF
1SPTQFDUVT
%JSFDUJWF
provided that no such o#er of O#er Shares shall result in a requirement for the publication by the Company, the Selling Shareholders or any Manager of a prospectus pursuant to Article - of the Prospectus Directive. For the purposes of this provision, the expression an “o#er to the public” in relation to any O#er Shares in any Relevant Member State means the communication in any form and by any means of su5cient information on the terms of the O#er and the O#er Shares so as to enable an investor to decide to purchase O#er Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, the expression “Prospectus Directive” means Directive +))-/1%/EC (and amendments thereto, including the +)%) PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “+)%) PD Amending Directive” means Directive +)%)/1-/EU.

ii NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED KINGDOM Any o#er or sale of the O#er Shares pursuant to the O#er are only being made to persons in the United Kingdom who are “quali2ed investors” as de2ned in section *((1) of the UK Financial Services and Markets Act +))) (“FSMA”) or otherwise in circumstances which do not require publication by the Company of a prospectus pursuant to section *$(%) of the FSMA. Any investment or investment activity to which this O#ering Memorandum relates is available only to, and will be engaged in only with persons who: (i) are investment professionals falling within Article %'($); or (ii) fall within Article &'(+)(a) to (d) (“high net worth companies, unincorporated associations, etc.”), of the UK Financial Services and Markets Act +))) (Financial Promotion) Order +))$, as amended (the “Order”), or other persons to whom such investment or investment activity may lawfully be made available (together, “relevant persons”). is O#ering Memorandum is directed only at relevant persons. Any person who is not a relevant person should not take any action on the basis of this O#ering Memorandum and should not act or rely on it.

ENFORCEMENT OF CIVIL LIABILITIES e Company is a company limited by shares organised under the laws of Sweden and its assets are located entirely outside the United States. In addition, none of the Company’s o5cers and other executives are residents or citizens of the United States. As a result, it may not be possible for investors to e#ect service of process within the United States upon the Company or such persons, or to enforce against them or the Company judgments of courts of the United States, whether predicated upon the civil liability provisions of the federal or state securities laws of the United States or otherwise. e United States and Sweden do not currently have a treaty providing for reciprocal recognition and enforcement of judgments in civil and commercial matters. As a result, a 2nal judgment for payment of damages based on civil liability rendered by a federal or state court in the United States, whether or not predicated solely upon federal securities laws of the United States, may not be enforceable, either in whole or in part, in Sweden. If the party in whose favour such 2nal judgment is rendered brings a new suit in a competent court in Sweden, such party may submit to the Swedish court the 2nal judgment that has been rendered in the United States. Such judgment will only be regarded by a Swedish court as evidence of the outcome of the dispute to which such judgment relates, and a Swedish court may choose to re-hear the dispute ab initio. In addition, awards of punitive damages in actions brought in the United States or elsewhere are under all circumstances unenforceable in Sweden.

ADDITIONAL INFORMATION e Company has agreed that it will, during any period in which it is neither subject to the reporting requirements of Section %- or %$(d) of the Exchange Act, nor exempt from such reporting requirements pursuant to Rule %+g--+(b) thereunder, furnish, upon request, to any holder or bene2cial owner of the shares, or any prospective investor designated by any such holder or bene2cial owner, information required to be provided by Rule %&&A(d)(&) under the Securities Act. e Company is not currently subject to the periodic reporting and other information requirements of the Exchange Act.

FORWARD-LOOKING STATEMENTS is O#ering Memorandum contains various forward-looking statements that re7ect management’s current views with respect to future events and anticipated 2nancial and operational performance. Forward-looking statements as a general matter are all statements other than statements as to historical facts or present facts or circumstances. e words “believe,” “expect,” “anticipate,” “intend,” “may,” “plan,” “estimate,” “will,” “should,” “could,” “aim” or “might,” or, in each case, their negative, or similar expressions, identify certain of these forward-looking statements. Other forward-looking statements can be identi2ed in the context in which the statements are made. Forward-looking statements appear in a number of places in this O#ering Memorandum, including, without limitation, in the sections entitled “Summary,” “Risk factors,” “Share capital and ownership structure—Dividends—Dividend policy,” “Operational and 2nancial review,” “Market overview,” and “Business description.” For further information, see “Forward-looking statements and presentation of 2nancial and other information—Forward-looking statements.”

PRESENTATION OF FINANCIAL AND OTHER INFORMATION Financial Information e 2nancial statements for the Company, which are included in this O#ering Memorandum, as of and for the years ended +* February +)%$ (“ FY#$/#1 ”), +* February +)%& (“ FY#%/#$ ”) and +* February +)%- (“ FY#*/#% ”) have been prepared in accordance with IFRS as adopted by the European Union (“ IFRS ”). e FY%&/%$ 2nancial statements have been audited by the Company’s independent auditors, PricewaterhouseCoopers AB (“ PwC ”), as set forth in their audit report included elsewhere herein. e FY %-/%& and FY%+/%- 2nancial statements have been audited by the Company’s previous independent auditors, Ernst & Young AB (“ EY ”), as set forth in their audit report included elsewhere herein. For additional information on the presentation of 2nancial information in this O#ering Memorandum, see “ Forward-looking statements and presentation of *nancial and other information—Presentation of *nancial and other information ,” “ Selected consolidated historical *nancial and other information ” and “ Operational and *nancial review .”

Currency For information on the currency information in this O#ering Memorandum, see “ Forward-looking statements and presentation of *nancial and other information—Presentation of *nancial and other information ” and “ Operational and *nancial review .”

No Incorporation by Reference Any references in this O#ering Memorandum to documents or other information available on a website are for convenience only, and none of the documents or other information available on such websites is incorporated by reference herein.

iii EXCHANGE RATE INFORMATION AND REGULATION Fluctuations in the exchange rate between the SEK and the U.S. dollar and EUR will a#ect the U.S. dollar and EUR amounts received by owners of O#er Shares in the Company on conversion of dividends, if any, paid in SEK on the O#er Shares. Investors with a reference currency other than the SEK may become subject to certain foreign exchange risks when investing in the O#er Shares. e Company’s equity capital is denominated in SEK, and any returns will primarily be distributed in SEK. e O#er Shares will be denominated and traded in SEK on Nasdaq Stockholm. Investors whose reference currency is a currency other than the SEK may be adversely a#ected by any reduction in the value of the SEK relative to the respective investor’s reference currency. In addition, such investors could incur additional transaction costs in converting SEK into another currency. Investors whose reference currency is a currency other than the SEK are therefore urged to consult their 2nancial advisors with a view to determining whether they should enter into hedging transactions to o#set these currency risks. e following table sets forth, for the periods indicated, certain information regarding the noon buying rate in New York for cable transfers for SEK, expressed in SEK per U.S. dollar. e noon buying rates are certi2ed by the Federal Reserve Bank of New York for customs purposes and for cable transfers payable in foreign currencies. e average rate for a year means the average of the noon buying rates on the last day of each month during a year. e average rate for a month, or for any shorter period, means the average of the daily noon buying rates during that month, or a shorter period, as the case may be. e rates below may di#er from the actual rates used in the preparation of the Company’s consolidated 2nancial statements and other 2nancial information appearing in this O#ering Memorandum. e inclusion of the exchange rate information below is not meant to suggest that the SEK amounts actually represent such U.S. dollar amounts or that such amounts could have been converted into U.S. dollars at the rates indicated or at any other rate.

Exchange Rate SEK per U.S. Dollar Year: High Low Period end Average 2344 5.3378 7.99:; :.;5<5 :.8;5; 2342 5.2:77 :.734; :.7358 :.5524 234< :.;454 :.2;;3 :.8278 :.7428 2348 5.;287 :.<<98 5.;287 :.;75:

Month: January 2347 ;.25<2 5.;;85 ;.25<2 ;.44<4 February 2347 ;.849< ;.22:7 ;.<777 ;.<7<5 March 2347 ;.5737 ;.2:42 ;.:2:; ;.7<:< April 2347 ;.;4;3 ;.<372 ;.<55; ;.::42 May 2347 (through May 29) ;.7287 ;.23;7 ;.7287 ;.<84;

On May +', +)%$, the noon buying rate as certi2ed by the Federal Reserve Bank of New York for customs purposes, SEK per U.S. Dollar, was SEK *.$+&$ per 9%.)). e following table sets forth, for the periods indicated, certain information concerning the European Central Bank (the “ ECB ”) daily reference rate published by the ECB (the “ ECB Daily Reference Rate ”) for EUR, expressed in SEK per EUR. e average rate for a year means the average of the daily mid-rates on the last day of each month during a year. e average rate for a month, or for any shorter period, means the average of the daily mid-rates during that month, or a shorter period, as the case may be. e period end rate represents the mid-rate on the last business day of each applicable period. ese exchange rates are provided only for the convenience of the reader. No representation is made that amounts in SEK have been, could have been, or could be converted into EUR, or vice versa, at the mid-rate or at any other rate.

Exchange Rate SEK per EUR Year: High Low Period end Average 2344 9.<425 ;.5393 ;.9423 9.329; 2342 9.4<7: ;.2355 ;.7;23 ;.5384 234< 9.3:38 ;.29<4 ;.;794 ;.:747 2348 9.:2<8 ;.5::4 9.<9<3 9.39;7

Month: January 2347 9.7843 9.2;97 9.<:42 9.84:5 February 2347 9.:29; 9.<:52 9.<:9< 9.8934 March 2347 9.<8<: 9.4484 9.2934 9.2889 April 2347 9.<;4: 9.2784 9.<2:4 9.<278 May 2347 (through May 29) 9.825< 9.4;:3 9.<252 9.<3<5

On May +', +)%$, the ECB Daily Reference Rate for SEK per EUR, was SEK '.-+1+ per EUR %.)). Figures reported in the O#ering Memorandum are presented in Euro (“ EUR ”) unless otherwise speci2ed. While the Company’s audited accounts are denominated in EUR, certain other 2gures in the O#ering Memorandum have been converted from Swedish Krona (“ SEK ”) to EUR, such as net proceeds from the O#er and Swedish legal costs incurred in connection with the O#er. In all such instances where SEK 2gures are converted into EUR, the exchange rate used is SEK '.-+1+ = EUR %.)).

iv Exchange Control Regulations in Sweden ere are currently no foreign exchange control restrictions in Sweden, other than in certain national crisis situations, that would restrict the payment of dividends to a shareholder outside Sweden, and there are currently no restrictions that would a#ect the right of shareholders who are not residents of Sweden to dispose of their shares and receive the proceeds from a disposal outside Sweden. ere is no maximum transferable amount either to or from Sweden, although transferring banks are required to report to the Swedish tax authorities any payments to or from Sweden exceeding SEK %$),))), or the foreign currency equivalent thereof. Such information may also be forwarded to authorities in the countries where the holders of the shares are resident.

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS e following discussion describes certain U.S. federal income tax consequences to U.S. Holders (de2ned below) under present law of an investment in the O#er Shares. is summary applies only to U.S. Holders that acquire O#er Shares in the O#er, hold O#er Shares as capital assets within the meaning of Section %++% of the Code (as de2ned below) and that have the U.S. dollar as their functional currency. is discussion is based on the tax laws of the United States as in e#ect on the date of this O#ering Memorandum, including the Internal Revenue Code of %'*(, as amended (the “ Code ”), and on U.S. Treasury regulations in e#ect or, in some cases, proposed, as of the date of this O#ering Memorandum, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change; such change could apply retroactively and could a#ect the tax consequences described below. is summary does not address any estate or gift tax consequences or any state, local, or non-U.S. tax consequences. e following discussion does not deal with the tax consequences to any particular investor or to persons in special tax situations such as: t
CBOLT t
DFSUBJO
ëOBODJBM
JOTUJUVUJPOT t
SFHVMBUFE
JOWFTUNFOU
DPNQBOJFT t
SFBM
FTUBUF
JOWFTUNFOU
USVTUT t
JOTVSBODF
DPNQBOJFT t
CSPLFSEFBMFST t
USBEFST
UIBU
FMFDU
UP
NBSL
UP
NBSLFU t
UBYFYFNQU
FOUJUJFT t
QFSTPOT
MJBCMF
GPS
BMUFSOBUJWF
NJOJNVN
UBY t
64
FYQBUSJBUFT t
QFSTPOT
IPMEJOH
UIF
0êFS
4IBSFT
BT
QBSU
PG
B
TUSBEEMF
IFEHJOH
DPOTUSVDUJWF
TBMF
DPOWFSTJPO
PS
JOUFHSBUFE
USBOTBDUJPO t
QFSTPOT
UIBU
BDUVBMMZ
PS
DPOTUSVDUJWFMZ
PXO
Ųű
QFSDFOU
PS
NPSF
PG
UIF
$PNQBOZT
WPUJOH
TUPDL
t
QFSTPOT
UIBU
BSF
SFTJEFOU
PS
PSEJOBSJMZ
SFTJEFOU
JO
PS
IBWF
B
QFSNBOFOU
FTUBCMJTINFOU
JO
B
KVSJTEJDUJPO
PVUTJEF
UIF
64 t
QFSTPOT
XIP
BDRVJSFE
UIF
0êFS
4IBSFT
QVSTVBOU
UP
UIF
FYFSDJTF
PG
BOZ
FNQMPZFF
TIBSF
PQUJPO
PS
PUIFSXJTF
BT
DPNQFOTBUJPO
PS t
QFSTPOT
IPMEJOH
UIF
0êFS
4IBSFT
UISPVHI
QBSUOFSTIJQT
PS
PUIFS
QBTTUISPVHI
FOUJUJFT

PROSPECTIVE PURCHASERS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE OFFER SHARES. e discussion below of the U.S. federal income tax consequences to “U.S. Holders” applies to a holder that is a bene2cial owner of the O#er Shares and is, for U.S. federal income tax purposes, t
BO
JOEJWJEVBM
XIP
JT
B
DJUJ[FO
PS
SFTJEFOU
PG
UIF
6OJUFE
4UBUFT t

B
DPSQPSBUJPO
PS
PUIFS
FOUJUZ
UBYBCMF
BT
B
DPSQPSBUJPO
GPS
64
GFEFSBM
JODPNF
UBY
QVSQPTFT
DSFBUFE
PS
PSHBOJTFE
VOEFS
UIF
MBXT
PG
UIF
United States, any State or the District of Columbia; t
BO
FTUBUF
XIPTF
JODPNF
JT
TVCKFDU
UP
64
GFEFSBM
JODPNF
UBYBUJPO
SFHBSEMFTT
PG
JUT
TPVSDF
PS t

B
USVTU
UIBU
Ų
JT
TVCKFDU
UP
UIF
TVQFSWJTJPO
PG
B
DPVSU
XJUIJO
UIF
6OJUFE
4UBUFT
BOE
UIF
DPOUSPM
PG
POF
PS
NPSF
64
QFSTPOT
PS
ų
IBT
B
WBMJE
election in e#ect under applicable U.S. Treasury regulations to be treated as a U.S. person. e tax treatment of a partner in an entity taxable as a partnership for U.S. federal income tax purposes that holds the O#er Shares generally will depend on such partner’s status and the activities of the partnership. A U.S. Holder that is a partner in such partnership should consult its tax advisor.

Taxation of Distributions Subject to the passive foreign investment company rules discussed below, the gross amount of distributions made by the Company with respect to the O#er Shares (including the amount of any non-U.S. taxes withheld therefrom, if any) generally will be includable in a U.S. Holder’s gross income in the year received as dividend income, but only to the extent that such distributions are paid out of the Company’s current or accumulated earnings and pro2ts as determined under U.S. federal income tax principles. e Company does not maintain calculations of its earnings and

v pro2ts under U.S. federal income tax principles, and, accordingly, a U.S. Holder should therefore expect to treat all cash distributions as dividends for U.S federal income tax purposes. e dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations. Dividends received by non-corporate U.S. Holders may be “quali2ed dividend income”, which is taxed at the lower applicable capital gains rate, provided that (%) the Company is eligible for the bene2ts of the tax treaty between the United States and Sweden (the “ Treaty ”), (+) the Company is not a passive foreign investment company (as discussed below) for either the taxable year in which the dividend was paid or the preceding taxable year, (-) the U.S. Holder satis2es certain holding period requirements and (&) the U.S. Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property. U.S. Holders should consult their own tax advisors regarding the availability of the lower rate for dividends paid with respect to the O#er Shares. e amount of any distribution paid in foreign currency will be equal to the U.S. dollar value of such currency on the date such distribution is includible in income by the recipient, regardless of whether the payment is in fact converted into U.S. dollars at that time. Any gain or loss on a subsequent conversion of the currency for a di#erent U.S. dollar amount will be U.S. source ordinary income or loss. e amount of any distribution of property other than cash will be the fair market value of such property on the date of distribution. Dividends on the common shares generally will constitute foreign source income for foreign tax credit limitation purposes. Subject to certain conditions and limitations, Swedish taxes withheld from a distribution may be eligible for a credit against, or a deduction in computing, a U.S. Holder’s federal income tax liability. If a refund of the tax withheld is available under the laws of Sweden or under the Treaty, the amount of tax withheld that is refundable will not be eligible for such credit or deduction against a U.S. Holder’s U.S. federal income tax liability. If the dividends are quali2ed dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. e limitation on foreign taxes eligible for credit is calculated separately with respect to speci2c classes of income. For this purpose, dividends distributed by the Company with respect to shares will generally constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income.” e rules relating to the determination of the U.S. foreign tax credit are complex, and U.S. Holders should consult their tax advisors to determine the availability of a foreign tax credit in their particular circumstances. A U.S. Holder who does not elect to claim a foreign tax credit with respect to any foreign taxes for a given taxable year may instead claim an itemised deduction for all foreign taxes paid in that taxable year.

Sale or Other Disposition of O"er Shares Subject to the passive foreign investment company rules discussed below, upon a sale or other disposition of the O#er Shares, a U.S. Holder will recognise a capital gain or loss for U.S. federal income tax purposes in an amount equal to the di#erence between the amount realised and the U.S. Holder’s tax basis in such O#er Shares. Any such gain or loss generally will be U.S. source gain or loss and will be treated as long term capital gain or loss if the U.S. Holder’s holding period in the O#er Shares exceeds one year. Non-corporate U.S. Holders (including individuals) generally will be subject to U.S. federal income tax on long-term capital gain at preferential rates. e deductibility of capital losses is subject to signi2cant limitations. Gain, if any, realised by a U.S. Holder on the sale or other disposition of the O#er Shares generally will be treated as U.S. source income for U.S. foreign tax credit purposes. If the consideration received upon the sale or other disposition the O#er Shares is paid in foreign currency, the amount realised will be the U.S. dollar value of the payment received, determined by reference to the spot rate of exchange on the date of the sale or other disposition. If the O#er Shares are treated as traded on an established securities market and the relevant holder is either a cash basis taxpayer or an accrual basis taxpayer who has made a special election (which must be applied consistently from year to year and cannot be changed without the consent of the Internal Revenue Service), such holder will determine the U.S. dollar value of the amount realised in a foreign currency by translating the amount received at the spot rate of exchange on the settlement date of the sale. If a U.S. Holder is an accrual basis taxpayer that is not eligible to or does not elect to determine the amount realised using the spot rate on the settlement date, it will recognise foreign currency gain or loss to the extent of any di#erence between the U.S. dollar amount realised on the date of sale or disposition and the U.S. dollar value of the currency received at the spot rate on the settlement date. A U.S. Holder’s initial tax basis in the O#er Shares generally will equal the cost of such O#er Shares. If a U.S. Holder used foreign currency to purchase the O#er Shares, the cost of the O#er Shares will be the U.S. dollar value of the foreign currency purchase price on the date of purchase, determined by reference to the spot rate of exchange on that date. If the O#er Shares are treated as traded on an established securities market and the relevant U.S. Holder is either a cash basis taxpayer or an accrual basis taxpayer who has made the special election described above, such holder will determine the U.S. dollar value of the cost of such O#er Shares by translating the amount paid at the spot rate of exchange on the settlement date of the purchase.

Passive Foreign Investment Company Rules e Company would be classi2ed as a passive foreign investment company (a “ PFIC ”), for any taxable year if either: (a) at least 1$ percent of its gross income is “passive income” for purposes of the PFIC rules, or (b) at least $) percent of the value of its assets (determined on the basis of a quarterly average) produce or are held for the production of passive income. For this purpose, the Company will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other corporation in which it owns, directly or indirectly, +$ percent or more (by value) of the stock. Under the PFIC rules, if the Company were considered a PFIC at any time that a U.S. Holder holds the O#er Shares, the Company would continue to be treated as a PFIC with respect to such holder’s investment unless (i) the Company ceases to be a PFIC and (ii) the U.S. Holder has made a “deemed sale” election under the PFIC rules. Based on the anticipated market price of the O#er Shares in the O#er and the expected market price of the O#er Shares following the O#er, and the composition of the Company’s income, assets and operations, the Company does not expect to be treated as a PFIC for U.S. federal income tax purposes for the taxable year ended December -%, +)%$ or in the foreseeable future. is is a factual determination, however, that depends on the composition of a company’s income and assets and the market value of its assets from time to time and which may be determined by reference to the market value of the Company’s shares, and thus must be made annually after the close of each taxable year. erefore there can be no assurance that the Company will not be classi2ed as a PFIC for the current taxable year or for any future taxable year.

vi If the Company is considered a PFIC at any time that a U.S. Holder holds O#er Shares, any gain recognised by the U.S. Holder on a sale or other disposition of the O#er Shares, as well as the amount of any “excess distribution” (de2ned below) received by the U.S. Holder, would be allocated rateably over the U.S. Holder’s holding period for the O#er Shares. e amounts allocated to the taxable year of the sale or other disposition (or the taxable year of receipt, in the case of an excess distribution) and to any year before the Company became a PFIC would be taxed as ordinary income. e amount allocated to each other taxable year would be subject to tax at the highest rate in e#ect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed. For the purposes of these rules, an excess distribution is the amount by which any distribution received by a U.S. Holder on its O#er Shares exceeds %+$ percent of the average of the annual distributions on the O#er Shares received during the preceding three years or the U.S. Holder’s holding period, whichever is shorter. Certain elections may be available that would result in alternative treatments (such as mark-to-market treatment) of the O#er Shares. If the Company is treated as a PFIC with respect to a U.S. Holder for any taxable year, the U.S. Holder will be deemed to own shares in any of our subsidiaries that are also PFICs. However, an election for mark-to-market treatment would likely not be available with respect to any such subsidiaries. If the Company is considered a PFIC, a U.S. Holder will also be subject to annual information reporting requirements. U.S. Holders should consult their own tax advisors about the potential application of the PFIC rules to an investment in the O#er Shares.

Information Reporting and Backup Withholding Dividend payments with respect to the O#er Shares and proceeds from the sale or other disposition of the O#er Shares may be subject to information reporting to the Internal Revenue Service and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identi2cation number and makes any other required certi2cation or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status may be required to provide such certi2cation on Internal Revenue Service Form W '. U.S. Holders should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules. Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s U.S. federal income tax liability, and such holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely 2ling the appropriate claim for refund with the Internal Revenue Service and furnishing any required information.

Information with respect to foreign #nancial assets Certain U.S. Holders who are individuals may be required to report information relating to an interest in our O#er Shares, subject to certain exceptions (including an exception for O#er Shares held in accounts maintained by certain U.S. 2nancial institutions). U.S. Holders should consult their tax advisors regarding the e#ect, if any, of this legislation on their ownership and disposition of the O#er Shares. Under certain circumstances, an entity may be treated as an individual for purposes of these rules. THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE IMPORTANT TO YOU. EACH PROSPECTIVE PURCHASER SHOULD CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES OF AN INVESTMENT IN THE OFFER SHARES UNDER THE INVESTOR’S OWN CIRCUMSTANCES.

THE SWEDISH SECURITIES MARKET NASDAQ FIRST NORTH e following is a description of Nasdaq Stockholm, including a brief summary of certain provisions of the Nasdaq Stockholm rules. e summary is not intended to provide a comprehensive description of all such rules and should not be considered exhaustive. Moreover, the rules and procedures summarised below may be amended or reinterpreted.

Nasdaq Stockholm Nasdaq Stockholm (“ Nasdaq Stockholm ”) is the principal market on which shares, bonds, derivatives and other securities are traded in Sweden. Nasdaq Stockholm is a part of the NASDAQ OMX Group, Inc. (“ NASDAQ OMX ”). NASDAQ OMX o#ers trading across multiple asset classes and its technology supports the operations of over 1) exchanges in $) countries. NASDAQ OMX also owns and maintains the exchanges in Helsinki, Copenhagen, Riga, Reykjavik, Tallinn and Vilnius. Each country has its own o5cial list and country-speci2c listing requirements. NASDAQ OMX’s Nordic List was launched in +))( and it consists of shares listed on the exchanges in Stockholm, Helsinki and Copenhagen. Companies on the Nordic List are divided into three segments: Large Cap, Mid Cap and Small Cap. Companies with a market capitalisation in excess of <% billion are included in the Large Cap segment. Companies with a market capitalisation between <%$) million and % billion are included in the Mid Cap segment, while companies with a market capitalisation below <%$) million are included in the Small Cap segment. e segments are normally revised at year-end and the segments are re-set, e#ective on January % and July %, based on weighted average prices for May and November the year before. Companies with a market capitalisation of more than $)> of the minimum or maximum threshold of a segment will be transferred into a new segment with immediate e#ect. Companies with a market capitalisation of less than $)> of the minimum or maximum segment threshold will have a transitional period until the next forthcoming review (or at least %+ months), and thus be subject to one more review before transferring into a new segment. Furthermore, companies are sorted by their industry sector according to the ICB Company Classi2cation Standard (prior to February %, +)%+, the Global Industry Classi2cation Standard (GICS) was applied). Companies belonging to the same industry sector are placed in the same industry sector segment in alphabetical order.

Trading in Securities on Nasdaq Stockholm Trading in and clearing of securities on Nasdaq Stockholm takes place in SEK, with prices quoted in minimum increments of ).)% SEK. All price information is produced and published only in SEK. Trading on Nasdaq Stockholm is conducted on behalf of customers by duly authorised Swedish and foreign banks and other securities brokers, as well as the Swedish Central Bank. While banks and brokers are permitted to act as principals in trading both on and o# Nasdaq Stockholm, they generally engage in transactions as agents. Settlement of trades take place through an electronic account based security system administered by Euroclear Sweden. See “ —Securities Registration .”

vii Nasdaq Stockholm uses the trading platform INET. In INET, bids and o#ers are entered in the relevant order book and automatically matched to trades when price, volume and other order conditions are met. INET continuously broadcasts all trading information. e information is displayed in real time in the form of order books, market summaries, concluded trades, index information and di#erent kinds of reports. e round lot for all shares traded on Nasdaq Stockholm is one share. A two-day settlement schedule currently applies to share trading. Nasdaq Stockholm has three principal trading periods: pre-trading, trading and post-trading. For shares, pre-trading begins at *:)) CET and ends at *:&$ CET. Opening call begins at *:&$ CET and ends at ':)) CET. Continuous trading begins sequentially after the opening call ends at ':)) CET when the 2rst share is assigned its opening price and it then becomes subject to continuous trading. Continuous trading takes place from ':)) CET to %1:+$ CET when the closing call is initiated. e closing call ends at approximately %1:-) CET when the closing prices are determined. Post-trading, during which contract transactions for shares can be registered as dealings after trading hours mainly within the price limits based on the trading day, takes place from %1:-) CET to %*:)) CET. In addition to o5cial trading on Nasdaq Stockholm through automatic order matching in INET, shares may also be traded o# Nasdaq Stockholm, i.e., outside INET, during, as well as after, the o5cial trading hours (through “manual trading”). Manual trades during trading hours must normally be entered into at a price within the volume weighted average spread reported in INET at the time of the trade or, as regards manual trades during the closing call, at the time prior to the closing call auction. Outside the trading hours, manual trades must normally be a#ected at a price within the volume weighted average spread reported in INET at the close of trading hours. However, in the absence of a spread and in situations where there is a change in the market conditions during the closing call or after the close of trading hours, as the case may be, manual trades must take place at a price that takes into account the market situation at the time of the trade. Manual trades which qualify as large scale (<$),))) – <$)),))), depending on the average daily turnover in the relevant share) may be e#ected without regard to any spread. Trading on Nasdaq Stockholm tends to involve a higher percentage of retail clients while trading o# Nasdaq Stockholm, whether directly or through intermediaries, often involves larger Swedish institutions, banks arbitraging between the Swedish market and foreign markets, and foreign buyers and sellers purchasing shares from, or selling shares to, Swedish institutions. All manual trades must normally be reported in INET within three minutes from the time of the trade, although trades outside the o5cial trading hours must be reported during the pre-trading session on the following exchange day and not later than %$ minutes prior to the opening of the trading hours.

Securities Market Regulations e Nordic List is regulated under EU directives, primarily Directive +))&/-'/EC on Markets in Financial Instruments (“ MiFID ”), which has been implemented through the Swedish Securities Market Act of +))1 (Sw. lagen (+'',:.+&) om värdepappersmarknaden ) (the “ Securities Market Act ”). NASDAQ OMX Stockholm Aktiebolag is authorised pursuant to the Securities Market Act to operate a regulated market under the supervision of the SFSA. e SFSA is a governmental agency responsible for, among other things, supervising and monitoring the Swedish securities market and market participants. e SFSA also issues regulations that supplement Swedish securities market laws. Furthermore, pursuant to the Swedish Securities Market Act, Nasdaq Stockholm is required to have rules of its own, governing the trading on Nasdaq Stockholm. e Rule Book for Issuers of Nasdaq Stockholm, based on European standards and EU directives such as MiFID and Directive +))&/%)'/EC (the “ Transparency Directive ”), sets forth listing requirements and disclosure rules for companies listed on Nasdaq Stockholm. e objective of the regulatory system governing trading on and o# Nasdaq Stockholm is to achieve transparency and equality of treatment among market participants. Nasdaq Stockholm records information as to the banks and brokers involved, the issuer, the number of shares, the price and the time of each transaction. Each bank or broker is required to maintain records indicating trades carried out as agent or as principal. All trading information reported in INET is publicly available. Nasdaq Stockholm also maintains a market supervision unit (“ Trading Surveillance ”) that monitors trading on a “real time” basis, as described below. Trading Surveillance monitors trading data for indications of unusual market activity and trading behaviour, and continuously examines information disseminated by listed companies, such as earnings reports, acquisition and other investment plans and changes in ownership structure on a daily basis. When Trading Surveillance becomes aware of non-public price sensitive information, it monitors trading in the shares concerned to identify unusual trading activity indicating that persons may be trading on that information. e Swedish Market Abuse Penal Act of +))$ (Sw. lagen (+''.:0,,) om stra# för marknadsmissbruk vid handel med *nansiella instrument ) (the “Market Abuse Act ”), implementing in part Directive (+))-/(/EC) (the “ Market Abuse Directive ”), provides sanctions for insider trading and unlawful disclosure of insider information. e Market Abuse Act also contains provisions prohibiting market manipulation, making illegal any actions (in connection with trading on the securities market or otherwise) intended to unduly a#ect the market price or other conditions of trade in 2nancial instruments, or otherwise mislead buyers or sellers of such instruments (such as through spreading false or misleading information). Market manipulation may also constitute fraud under Swedish law. e SFSA and the Trading Surveillance enforce compliance with the Market Abuse Act and other insider trading rules. Criminal o#ences are enforced in court by the Swedish National Economic Crimes Bureau (Sw. Ekobrottsmyndigheten ). Moreover, the SFSA may cause the operating licence of a bank or broker to be revoked if the bank or broker has engaged in improper conduct, including market manipulation.

Securities Registration e Swedish book-entry securities system is centralised at Euroclear Sweden, a central securities depository and clearing organisation authorised under the Swedish Financial Instruments Accounts Act (Sw. lagen ($%%&:$2,%) om kontoföring av *nansiella instrument) and the Swedish Securities Markets Act. Among other things, Euroclear Sweden maintains the register of shareholders in Swedish companies listed on Nasdaq Stockholm. Shares administered by Euroclear Sweden are registered in book-entry form on securities accounts (VP accounts) and no share certi2cates are issued. Title to shares is ensured exclusively through registration with Euroclear Sweden. All transactions and other changes to accounts are entered in the system of Euroclear Sweden through banks or other securities institutions that have been approved as account operators by Euroclear Sweden. e register maintained by Euroclear also contains information on other interests in respect of shares, such as those of a pledgee.

viii Shares may be registered on VP accounts, and consequently entered in the register of shareholders, either in the name of the bene2cial owner (owner registered shares) or in the name of a nominee authorised by Euroclear Sweden (nominee registered shares), in which case a note thereof is made in the securities system. e relationship between the nominee and the bene2cial owner is governed by agreement. In order to exercise certain rights, such as participation at a general meeting, shareholders whose shares are registered in the name of a nominee must temporarily re-register the shares in their own names. Nominees are also required to report the holdings of underlying bene2cial owners to Euroclear Sweden on a regular basis. e rights attaching to shares that are eligible for dividends, rights issues or bonus issues accrue to those holders whose names are recorded in the register of shareholders as of a particular record date, and the dividends are normally distributed to bank accounts as speci2ed by the holders registered with Euroclear Sweden. e relevant record date must be speci2ed in the resolution declaring a dividend or capital increase, or any similar matter in which shareholders have preferential rights. Where the registered holder is a nominee, the nominee receives, for the account of the bene2cial owner, dividends and other 2nancial rights attaching to the shares, such as subscription rights in conjunction with rights o#erings, as well as new shares subscribed through the exercise of subscription rights. Dividends are remitted in a single payment to the nominee who is responsible for the distribution of such dividends to the bene2cial owner. A similar procedure is applied for subscription rights and newly issued shares.

Transactions and Ownership Disclosure Requirements Under the Trading Act, which implements the Transparency Directive in part, a shareholder is required to notify both the company in which it holds shares and the SFSA, when its holding (including options for shares) reaches, exceeds or falls below $, %), %$, +), +$, -), $), (( +/- or ')> of the total number of votes and/or shares in a company. e notice is to be made in writing or electronically on the SFSA’s website on the trading day immediately following the day of the applicable transaction. e SFSA will announce the contents of the noti2cation no later than %+:)) a.m. CET on the trading day following receipt of the noti2cation. When calculating a shareholder’s percentage of ownership, a company’s treasury shares are to be included in the denominator, while warrants and convertibles are to be excluded. For the purposes of calculating a person’s or entity’s shareholding, not only the shares and 2nancial instruments directly held by the shareholder are included, but also those held by related parties. e Trading Act contains a list of related parties whose shareholding must be aggregated for the purposes of the disclosure requirements. Related parties include, but are not limited to, subsidiaries and, in certain circumstances, proxies, parties to shareholders’ agreements as well as spouses/ co-habitants. Under the Regulation (EU) +-(/+)%+ on short selling and certain aspects of credit default swaps, a person who has a net short position in a share is required to notify the SFSA when the position either reaches or falls below the following thresholds: ).+> of the issued share capital of the company concerned and each ).%> above that. Furthermore, there is also a requirement of public disclosure when the position reaches or falls below the following thresholds: ).$> of the issued share capital of the company concerned and each ).%> above that. e public disclosure is made by the SFSA via announcement on its website. Further, an investor who wishes to take an uncovered, or “naked,” short position in a particular share will be required either: (a) to have borrowed su5cient shares to settle the short trade; (b) to have entered into a binding agreement to borrow the shares; or (c) to have an arrangement with a third party under which that third party has con2rmed that the shares have been located and has taken measures vis-à-vis third parties necessary to have a reasonable expectation that settlement can be e#ected when it is due. In addition, pursuant to the Swedish Act on Reporting Obligations for Certain Holdings of Financial Instruments (Sw. lagen (+''':$'&,) om anmälningsskyldighet för vissa innehav av *nansiella instrument ), among others, individuals who own, directly or indirectly, shares representing %)> or more of the share capital or the voting rights in a publicly traded company must report, in writing or electronically, such ownership and any changes therein to the SFSA, which keeps a public register based on the information contained in such reports.

Mandatory Bids Pursuant to the Swedish Act on Public Takeovers on the Securities Market (Sw. lagen (+''3:2.$) om o#entliga uppköpserbjudanden på aktiemarknaden ) (the “ Takeover Act ”), any Swedish or foreign legal entity or natural person who holds less than -)> of the total voting rights in a company listed on a regulated market in Sweden, must make a public o#er for the acquisition of all the remaining shares issued by the target company (a mandatory bid) should such legal entity or natural person alone, or together with a related party, reach -)> or more of the total voting rights in the company. is applies where the increased holding is the result of a purchase, subscription, conversion, or any other form of acquisition of shares in the target company (other than a public o#er) or the result of the establishment of a related party relationship. In this context, a related party can be an entity within the same corporate group as the buyer, a spouse or co-habitant, as well as any person or entity that cooperates with the buyer to obtain control over the company or with whom an agreement has been reached regarding the coordinated exercise of voting rights with the object of achieving a long-term controlling in7uence on the company’s management. e public o#er shall be made within four weeks after the acquisition that triggered the mandatory bid requirement unless the acquirer (or the related party) reduces its level of voting share ownership within such time to below -)>. e o#er is normally also made to holders of other securities issued by the target company, if the price of such securities could be substantially a#ected as a result of a de-listing of the target company’s shares, such as, for example, warrants and convertibles. Under the Takeover Act, o#erors have a duty to undertake to comply with the takeover rules adopted by Nasdaq Stockholm (the “ Takeover Rules ”). By making this undertaking, the o#eror agrees to comply not only with the Takeover Rules, but also to comply with statements and rulings by the Swedish Securities Council (Sw. Aktiemarknadsnämnden ) on points of interpretation of the Takeover Act as well as to be subject to any sanctions that may be imposed by Nasdaq Stockholm. Exemptions from the mandatory bid requirement may under certain circumstances, for example in conjunction with rights o#erings and underwriting guarantees, be granted by the Swedish Securities Council. e Swedish Securities Council may also grant exemptions from the provisions of the Takeover Rules.

ix TRANSFER RESTRICTIONS e O#er Shares have not been, and will not be, registered under the Securities Act and may not be o#ered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Each purchaser of the O#er Shares outside the United States in compliance with Regulation S will be deemed to have represented and agreed that it has received a copy of this O#ering Memorandum and such other information as it deems necessary to make an informed investment decision and that: (%) the purchaser is authorised to consummate the purchase of the O#er Shares in compliance with all applicable laws and regulations; (+) the purchaser acknowledges that the O#er Shares have not been and will not be registered under the U.S. Securities Act, or with any securities regulatory authority of any state of the United States, and, subject to certain exceptions, may not be o#ered or sold within the United States; (-) the purchaser and the person, if any, for whose account or bene2t the purchaser is acquiring the O#er Shares, was located outside the United States at the time the buy order for the O#er Shares was originated and continues to be located outside the United States and has not purchased the O#er Shares for the account or bene2t of any person in the United States or entered into any arrangement for the transfer of the O#er Shares or any economic interest therein to any person in the United States; (&) the purchaser is not an a5liate of the Company or a person acting on behalf of such a5liate; ($) the O#er Shares have not been o#ered to it by means of any “directed selling e#orts” as de2ned in Regulation S; (() the purchaser acknowledges that the Company and the Selling Shareholders shall not recognise any o#er, sale, pledge or other transfer of the O#er Shares made other than in compliance with the above-stated restrictions; (1) if it is acquiring any of the O#er Shares as a 2duciary or agent for one or more accounts, the purchaser represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account; and (*) the purchaser acknowledges that the Company, the Selling Shareholders and the Joint Bookrunners and their respective a5liates will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements. Each purchaser of the O#er Shares within the United States purchasing pursuant to an exemption from, or a transaction not subject to, the registration requirements of the Securities Act will be deemed to have represented and agreed that it has received a copy of this O#ering Memorandum and such other information as it deems necessary to make an informed investment decision and that: (%) the purchaser is authorised to consummate the purchase of the O#er Shares in compliance with all applicable laws and regulations; (+) the purchaser acknowledges that the O#er Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state of the United States and are subject to restrictions on transfer; (-) the purchaser (i) is a QIB (as de2ned in Rule %&&A under the Securities Act), (ii) is aware that the sale to it is being made pursuant to an exemption from, or a transaction not subject to, the registration requirements of the Securities Act, and (iii) is acquiring such O#er Shares for its own account or for the account of a QIB; (&) the purchaser is aware that the O#er Shares are being o#ered in the United States in a transaction not involving any public o#ering in the United States within the meaning of the Securities Act; ($) if in the future, the purchaser decides to o#er, resell, pledge or otherwise transfer such O#er Shares, or any economic interest therein, such O#er Shares or any economic interest therein may be o#ered, sold, pledged or otherwise transferred only (i) to a person whom the bene2cial owner and/or any person acting on its behalf reasonably believes is a QIB in a transaction meeting the requirements of Rule %&&A, (ii) in compliance with Regulation S under the Securities Act, or (iii) in accordance with Rule %&& under the Securities Act (if available), in each case in accordance with any applicable securities laws of any state of the United States or any other jurisdiction; (() the purchaser acknowledges that the O#er Shares are “restricted securities” within the meaning of Rule %&&(a)(-) under the Securities Act and no representation is made as to the availability of the exemption provided by Rule %&& for resales of any O#er Shares; (1) the purchaser will not deposit or cause to be deposited such O#er Shares into any depositary receipt facility established or maintained by a depositary bank other than a Rule %&&A restricted depositary receipt facility, so long as such O#er Shares are “restricted securities” within the meaning of Rule %&&(a)(-) under the Securities Act; (*) the purchaser acknowledges that the Company and the Selling Shareholders shall not recognise any o#er, sale, pledge or other transfer of the O#er Shares made other than in compliance with the above-stated restrictions; (') if it is acquiring any of the O#er Shares as a 2duciary or agent for one or more accounts, the purchaser represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account; and (%)) the purchaser acknowledges that the Company and the Selling Shareholders, the Joint Bookrunners and their respective a5liates will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements.

x Each person in a Relevant Member State, other than persons receiving o#ers contemplated in the Swedish-language prospectus in Sweden, who receives any communication in respect of, or who acquires any O#er Shares under, the o#ers contemplated hereby will be deemed to have represented, warranted and agreed to and with each of the Joint Bookrunners, the Selling Shareholders and the Company that: (%) it is a quali2ed investor within the meaning of the law in that Relevant Member State implementing Article +(%)(e) of the Prospectus Directive; and (+) in the case of any O#er Shares acquired by it as a 2nancial intermediary, as that term is used in Article -(+) of the Prospectus Directive, (i) the O#er Shares acquired by it in the o#er have not been acquired on behalf of, nor have they been acquired with a view to their o#er or resale to, persons in any Relevant Member State other than quali2ed investors, as that term is de2ned in the Prospectus Directive, or in other circumstances falling within Article -(+) of the Prospectus Directive and the prior consent of the Joint Bookrunners has been given to the o#er or resale; or (ii) where O#er Shares have been acquired by it on behalf of persons in any Relevant Member State other than quali2ed investors, the o#er of those O#er Shares to it is not treated under the Prospectus Directive as having been made to such persons. For the purposes of this provision, the expression an “o#er” in relation to any of the O#er Shares in any Relevant Member States means the communication in any form and by any means of su5cient information on the terms of the o#er and any O#er Shares to be o#ered so as to enable an investor to decide to purchase or subscribe for the O#er Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State.

xi INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL)

Joint Global Coordinators and Joint Bookrunners

Joint Bookrunner Important information This prospectus (the “ Prospectus ”) has been prepared in connection with the offering to the public in Sweden, to institutional investors in Sweden and abroad and the listing on Nasdaq Stockholm (the “ Offer ”) of Shares of Nobina AB (publ), a Swedish public limited liability company. In this Prospectus, “ Nobina ” or the “ Company ” refers to Nobina AB (publ) or Nobina AB (publ) and its subsidiaries, as the context requires. Carnegie Investment Bank AB (publ) (“ Carnegie ”) and Danske Bank A/S,Danmark, Sverige Filial (“ Danske Bank ”) are Joint Global Coordinators and Joint Bookrunners (“ Joint Global Coordinators ”) in connection with the Offer and Pareto Securities AB (“ Pareto Securities ” and, together with the Joint Global Coordinators, the “ Joint Bookrunners ”) is Joint Bookrunner. The “ Selling Shareholders ” refers to Sothic Capital, Blue- Mountain, Invesco, Anchorage, BlueCrest, Ironshield, Gladwyne, Kite Lake and Magnolia (as defined herein). See “ Definitions and glossary ” for definitions of these and other concepts in this Prospectus. Except as expressly stated herein, no financial information in this Prospectus has been audited or reviewed by the Company’s auditor. Finan- cial information about the Company in this Prospectus which have not been audited or reviewed by the Company’s auditor as stated herein has been obtained from the Company’s internal accounting and reporting systems.

Offer structure The Offer consists of: (a) a public offering to institutional and retail investors in Sweden; (b) a private placement in the United States to qualified institutional buyers (“ QIBs ”) as defined in and in reliance on Rule XYYA (“ Rule IJJA ”) under the U.S. Securities Act of XZ[[, as amended (the “Securities Act ”), or pursuant to another available exemption from the registration requirements under the Securities Act; and (c) a private placement to institutional investors in the rest of the world. All offers and sales outside the United States will be made in compliance with Regulation S (“ Regulation S ”) under the Securities Act. The Offer is neither directed to the general public in any country other than Sweden nor directed at such persons whose participation requires additional prospectuses, registrations or measures other than those prescribed by Swedish law. No measures have been or will be taken in any jurisdiction, other than Sweden, that would allow an offer of the Shares to the pub- lic, or allow holding and distribution of this Prospectus, or any other documents pertaining to the Company or the Shares in such jurisdiction. Applications to acquire Shares that violate such rules may be deemed invalid. Persons into whose possession this Prospectus comes are required by the Company and the Joint Bookrunners to inform themselves of and to observe, such restrictions. Neither the Company, nor any of the Joint Bookrunners or Selling Shareholders accepts legal responsibility for any violation by any person, whether or not a prospective investor, of any such restrictions. The Shares in the Offer have not been recommended by any United States federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy, or determined the adequacy of the content of this Prospectus. Any representation to the contrary is a criminal offence in the United States. The Shares in the Offer have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state within the United States. In the United States, this Prospectus is being furnished on a confidential basis solely for the purpose of enabling a prospective investor to consider purchasing the partic- ular securities described herein. The information contained in this Prospectus has been provided by the Company and other sources identified herein. Distribution of this Prospectus to any person other than the offeree specified by the Joint Bookrunners or their representatives, and those persons, if any, retained to advise such offeree with respect thereto, is unauthorised, and any disclosure of its contents, without the Company’s prior written consent, is prohibited. Any reproduction or distribution of this Prospectus in the United States, in whole or in part, and any disclosure of its contents to any other person is prohibited. This Prospectus is personal to each offeree and does not constitute any offer to any other person or to the general public to acquire shares in the Offer. The Prospectus has been approved and registered by the Swedish Financial Supervisory Authority ( Sw. Finansinspektionen ) (the “ SFSA ”) in accordance with Chapter ^, Sections ^_ and ^` of the Swedish Financial Instruments Trading Act ( Sw. lagen (7887:8:;) om handel med finan- siella instrument ) (the “ Trading Act ”), implementing the European Parliament and Council Directive ^aa[/bX/EC (the “ Prospectus Directive ”). Approval and registration by the SFSA does not imply that the SFSA guarantees that the factual information provided herein is correct or com- plete. This Prospectus is an English translation of the Swedish prospectus that has been approved and registered by the SFSA. In the event of discrepancies between this Prospectus and the Swedish prospectus, the Swedish prospectus shall prevail. The Offer and this Prospectus are governed by Swedish law. The courts of Sweden have exclusive jurisdiction to settle any conflict or dispute arising out of or in connection with the Offer or this Prospectus.

Stabilisation In connection with the Offer, Danske Bank, acting as stabilising manager (the “ Stabilising Manager ”), or its agents, on behalf of the Joint Book- runners may engage in transactions that stabilise, maintain or otherwise affect the price of Nobina’s Shares for up to [a days from the first day of trading of the Shares on Nasdaq Stockholm. Specifically, the Joint Bookrunners, the Company and the Selling Shareholders have agreed that the Stabilising Manager may, on behalf of the Joint Bookrunners, over-allot Shares or effect transactions with a view to support the market price of the Shares at a level higher than that which might otherwise prevail in the open market. The Stabilising Manager and its agents are not required to engage in any of these activities and, as such, there can be no assurances that these activities will be undertaken; if undertaken, the Stabilising Manager or its agents may end any of these activities at any time and they must be brought to an end at the end of the [a-day period mentioned above. Save as required by law or regulation, none of the Stabilising Manager, any of its agents or the Joint Bookrunners intend to disclose the extent of any stabilisation and/or over-allotment transactions in connection with the Offer. For more information, see “ Plan of dis- tribution—Stabilisation ”.

Business and market data Information provided in this Prospectus on the market environment, market developments, growth rates, market trends, and the competitive situation in the markets and regions in which the Company operates, is based on data, statistical information and reports from third parties and/or prepared by the Company based on its own information and information in such third-party reports, including a market study (the “Company Market Study ”) commissioned by the Company from a leading global strategy consulting firm. Such information has been accu- rately reproduced and, as far as the Company is aware, no facts have been omitted which would render the information provided inaccurate or misleading. Industry publications or reports generally state that the information they contain has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. The Company has not independently verified and can give no assur- ances as to the accuracy of market data contained in this Prospectus that was extracted or derived from these industry publications or reports. Market data and statistics are inherently predictive and subject to uncertainty and not necessarily reflective of actual market conditions. Such statistics are based on market research, which itself is based on sampling and subjective judgments by both the researchers and the respond- ents, including judgments as to which types of products and transactions should be included in the relevant market. This Prospectus also contains estimates of market data and information derived therefrom that cannot be gathered from publications by market research institutions or any other independent sources. Such information is prepared by the Company based on third-party sources and its own internal estimates, including the Company Market Study. In many cases, there is no publicly-available information on such market data, for example, from industry associations, public authorities or other organisations and institutions. The Company believes that its esti- mates of market data and information derived therefrom are helpful in order to give investors a better understanding of the industry in which it operates as well as its position within the industry. Although the Company believes that its internal market observations are reliable, its own estimates are not reviewed or verified by any external sources. While the Company is not aware of any misstatements regarding the industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under “ Risk Factors ” and “ Forward-looking statements and presentation of financial and other information—Presentation of financial and other information ” in this Prospectus.

SUMMARY OF THE OFFER TABLE OF CONTENTS Number of Shares offered e O#er comprises between $%,%&',()( and (%,*+%,$*+ Shares. e Company is o#ering such number of new Shares, not to Summary ^ exceed +$,-$-,$-(, as will raise gross proceeds of SEK *$) mil- lion. e Selling Shareholders are o#ering between +',*'',()( Risk factors X[ and 0(,)(&,))( existing Shares. Sothic Capital, Anchorage Forward-looking statements and presentation of and Invesco have granted an option to the Joint Global Coor- financial and other information ^_ dinators, on behalf of the Joint Bookrunners, to purchase up to -,&%*,$') additional Shares in the Company to cover any The offering ^b potential over-allotment or other short positions in connec- Background and reasons ^f tion with the O#er. Terms and instructions ^Z Offer Price Range Market overview [[ 00–&) per Share. e 1nal price of the O#er will be deter- Business description YX mined through a book-building process. Selected consolidated historical financial and e 1nal price of the O#er is expected to be announced other information _[ through a press release on or around %* June +)%$. Operational and financial review _b Indicative timetable Capitalisation, indebtedness and other Application period for the public in Sweden Y–X` June ^aX_ financial information bZ Application period for institutional investors Y–Xb June ^aX_ Board of Directors, management and auditors fX Listing on Nasdaq Stockholm Xf June ^aX_ Corporate governance f_ Settlement date ^[ June ^aX_ Share capital and ownership structure fZ Plan of distribution Z[ Financial Calendar Articles of association Z` Interim report for the period Legal considerations and supplementary information Zb X March – [X May ^aX_ X_ June ^aX_ Tax considerations in Sweden XaX Interim report for the period X March – [X August ^aX_ [a September ^aX_ Financial statements F-X Interim report for the period X September – [a November ^aX_ ^^ December ^aX_ Definitions and glossary A-X Addresses A-[

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 1 SUMMARY

SUMMARY

Summaries are made up of disclosure requirements known as “Elements”. ese Elements are numbered in Sections A-E (A.% – E.-). is summary contains all the Elements required to be included in a summary for this type of issuer and securities. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of issuer and securities, it is possible that no relevant information can be given regarding the Element. In this case, a short description of the Element is included in the summary with the mention of the words “not applicable”.

SECTION A – INTRODUCTION AND WARNINGS A.1 Introduction and is summary should be read as an introduction to the Prospectus. Any decision to invest in the warnings Shares should be based on consideration of the Prospectus as a whole by the investor. Where a claim relating to the information contained in the Prospectus is brought before a court, the plainti# investor may, in accordance with the national legislation of the member state, have to bear the costs of translating the Prospectus before the legal proceedings are initiated. Civil liabil- ity attaches only to persons who are responsible for this summary, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in the securities. A.2 Financial Not applicable. Financial intermediaries are not entitled to use the Prospectus for subsequent intermediaries resale or 1nal placement of securities.

SECTION B – ISSUER AND ANY GUARANTOR B.1 Legal and Nobina AB (publ), corporate registration number $$($-(-&$('. commercial name B.2 Domicile, legal e Company is a Swedish public limited liability company, domiciled in Stockholm, Sweden, form, legislation founded in Sweden under Swedish law and operating under Swedish law. e Company’s form of and country of association is governed by the Swedish Companies Act (+))$:$$%). incorporation B.3 Current operations Nobina is the Nordic region’s largest and most experienced public bus transport operator with a and principal market share of %(5 based on revenue, according to the Company Market Study. e Company activities operates in Sweden, Norway, Finland and Denmark. Nobina’s public bus transport services accounted for '(5 of its net sales in FY%&/%$. e Company also o#ers express bus services in Sweden through Swebus (primarily interregional express bus services), which accounted for &5 of Nobina’s net sales in the same period. e Company’s long history in the Nordic public transport market has provided Nobina with substantial local knowledge and strong relationships with public transport authorities. e accu- mulated internal competence combined with advanced prospecting, in7uencing and tendering processes positions Nobina well to win the preferred and most pro1table tenders in the region. e Company also bene1ts from signi1cant scale advantages from a fully integrated pan-Nordic model with centralised 7eet management and active contract management as key competitive advantages. e typical contract has a duration of 1ve to ten years with an extension option of one to two years, which may be exercised through mutual agreement of the PTA and the transport operator, which results in high revenue visibility. e contract base is diversi1ed without being dependent on any single region or contract.

2 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) SUMMARY

B.4a Recent trends in e Nordic public bus transport market is expected to experience stable and resilient growth in the industry the next three years. e anticipated future market growth is underpinned by several favourable fundamental long-term trends. ese trends include increasing urbanisation, focus on environ- mental sustainability, political initiatives favouring public transport and a public priority to improve the mobility of people. Buses constitute an attractive transportation mode. e annual capital and maintenance cost per passenger kilometre is signi1cantly lower for buses compared to metro, train and tram. Addi- tionally, improved technology has allowed more environmentally friendly buses and decreased the average amount of CO+ emissions per passenger kilometre. Altogether, this is expected to further support the Nordic public bus transport market growth. B.5 Group structure e Group comprises Nobina AB as the parent company and ++ directly and indirectly owned subsidiaries. B.6 Notifiable e table below sets out the current ownership structure of the Company, a well as the expected interests, different ownership of Shares following the completion of the O#er with the following alternative out- voting rights and comes: (a) the minimum number of Shares that the Selling Shareholders may sell assuming that controlling the Over-allotment Option is not exercised (“ Outcome I ”), (b) the maximum number of Shares interests that the Selling Shareholders may sell assuming that the Over-allotment Option is not exercised in full (“ Outcome II ”) and (c) the maximum number of Shares that the Selling Shareholders may sell assuming that the Over-allotment Option is exercised (“Outcome III ”), in each outcome assuming a price in the O#er at the mid-point of the O#er Price Range. As at the date of this Prospectus, there were no, according to the Company’s knowledge, natural or legal persons owing $5 or more of the Shares or voting rights in the Company other than as shown in the table below. Shareholding on the date of this Prospectus Outcome I Outcome II Outcome III Shareholder Number * % Number * % Number * % Number * %

Sothic Capital ** Xf,Z_b,[aZ ^Z.Z Xa,Y^` _^a X^.a Xa,aYb,[bY XX.` b,_bY,_XX f.b BlueMountain Xa,f^a,[f` Xb.X b,_bY ^ba f.b `,YZ^,^[^ b._ `,YZ^,^[^ b._ Invesco Z,a[_,f[a XY.[ Y,Z`Z ba` _.b Y,_Xb,ZX_ _.^ ^,aY_,a_^ ^.Y Anchorage f,f_a,aaa XY.a Y,Y^_ aaa _.X ^,Yb[,_b_ ^.Z bX^ a BlueCrest `,[Yf,ZbYXa.a a a a a a a Ironshield [,Yaa,aaa _.Y X,baa aaa ^.a a a a a Gladwyne ^,Y`a,aaa [.Z ^,a`a ^.Y X,``a,aaa X.Z X,``a,aaa X.Z Kite Lake Zf^,`a[ X.` a a a a a a Magnolia baa,aaa X.X _aa,aaa a.` [aa,aaa a.[ [aa,aaa a.[ Others X,afa,a`a X.b X,afa,a`a X.^ X,afa,a`a X.^ X,afa,a`a X.^

Board and Group Management Ragnar Norbäck [_X,^fa a.` `Zb,a^^ a.f `Zb,a^^ a.f `Zb,a^^ a.f Per Skärgård Za,b_f a.X ^aZ,XbX a.^ ^aZ,XbX a.^ ^aZ,XbX a.^ Other members of the Board and Group Management ^bf,Yf^ a.Y X,a`[,`Y^ X.^ X,a`[,`Y^ X.^ X,a`[,`Y^ X.^

New shareholders a a _X,Z[b,Z`^ _Z.Z _f,Xa^,[`^ `b.X `_,_^a,Z_^ b_.` Total TU,UWW,TXY IZZ XT,TJU,UWU IZZ XT,TJU,UWU IZZ XT,TJU,UWU IZZ

* The number of Shares assumes that the Reverse Share Split has been registered with Euroclear, which is expected to occur on or around f June ^aX_. ** The number of Shares assumes that, in the Reverse Share Split, Sothic Capital transfers, free of charge, a total of Xf_ Shares to shareholders of the Company whose shareholding is not evenly divided by ten and that X[ of these Shares are allotted to shareholders in the category “ Other shareholders ”.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 3 SUMMARY

B.7 Selected historical e selected consolidated historical 1nancial data set forth below as of and for FY%&/%$, FY%0/%& financial and FY%+/%0 has been derived from the Company’s audited consolidated 1nancial statements, information which have been prepared in accordance with IFRS as adopted by the EU. e FY%&/%$ 1nancial statements have been audited by PwC, as set forth in their audit report included elsewhere herein. e FY%0/%& and FY%+/%0 1nancial statements have been audited by EY, the Company’s previous auditor, as set forth in their audit report included elsewhere herein.

Summary of consolidated income statement For the financial year (SEK million) ABCD/ABCF ABCG/ABCD ABCA/ABCG Net sales \,WJ] \,YT] \,YIY

Operating expenses Fuel, tyres and other consumables –X,`__ –X,`YY –X,ba^ Other external expenses –X,aZX –X,XaX –X,XbZ Personnel costs –[,ffX –[,`Z^ –[,`a` Capital losses from the disposal of non-current assets –[_ –X_ –X_ Depreciation/amortisation and impairment of PPE and intangible assets –_X` –YZX –Y`Y Operating profit/loss U\I UYT YJT

Profit from net financial items Financial income f Z Z Financial expense –^[f –^Yf –^`Y Net financial items –YUZ –YU] –YWW

Profit/loss before tax (EBT) IJI X\ –] Tax –Yb –[X `Z Profit/loss for the year ]J WT TZ

4 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) SUMMARY

B.7 Selected historical Summary of consolidated balance sheet financial As of AI February information (SEK million) ABCF ABCD ABCG cont. ASSETS Non-current assets Intangible assets Goodwill _ff _f_ _ZX Other intangible assets X` XZ ^X Total intangible assets TZJ TZJ TIY

Total property, plant and equipment J,JUT U,]]] J,YJW

Financial assets Total financial assets ff XXf X[Z Total non-current assets W,IYX J,\YI J,]]T

Current assets Trade receivables _XZ [b_ [`Z Other current assets Yb` _Xf _Ya Cash and cash equivalents Y_[ [aZ X[b Total current assets I,JJX I,YZY I,ZJT TOTAL ASSETS T,W\T W,]YU T,ZJY

SHAREHOLDERS’ EQUITY AND LIABILITIES Shareholders’ equity attributable to parent Company shareholders UIZ YYJ IX\

Non-current liabilities Borrowing [,b`_ [,Yf[ [,faa Other non-current liabilities X_b X[X X^^ Total non-current liabilities U,]YY U,TIJ U,]YY

Current liabilities Accounts payable Yb` Yba Y`_ Borrowing `[Y _`_ YZ` Other current liabilities XbY X__ X_[ Accrued expenses and deferred income X,a`a fZ_ fXZ Total current liabilities Y,UJJ Y,ZXW I,]UU Total liabilities T,YTT W,T]] W,XWW TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES T,W\T W,]YU T,ZJY

Summary of consolidated cash flow statement For the financial year (SEK million) ABCD/ABCF ABCG/ABCD ABCA/ABCG

Cash flow from operating activities Z`Y fZZ f`` Cash flow from investing activities –^X[ –XX –XXf Cash flow from financing activities –`Xa –bX_ –bX_ Cash flow for the year XYX Xb[ [[ Cash and cash equivalents at the beginning of the year UZ] IU\ IZ\ Cash and cash equivalents at the end of the year JWU UZ] IU\

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 5 SUMMARY

B.7 Selected historical Summary of key performance indicators financial For the financial year information (SEK million unless otherwise stated) ABCD/ABCF ABCG/ABCD ABCA/ABCG cont. EBITDA X), _) Z^^ f[^ b^_ EBITDA margin (%) ^) X^.^ XX.Y Xa.X EBITDAR [), _) X,aXZ Zb[ Z^b EBITDAR margin (%) Y) X[._ X[.Y X^.Z Equity free cash flow `) Xfa Xff bY Equity/assets ratio (%) Y.b [.f [.X Equity [Xa ^^Y Xfb Number of buses [,[Yb [,[_Z [,Y__ Net sales/bus ^.[ ^.^ ^.X Average number of employees b,`a[ b,_Yb b,f`f X) The Company defines EBITDA as profit/loss for the year before net financial items, tax, depreciation/amortisation and impair- ment of PPE and intangible assets and capital losses from the disposal of non-current assets. ^) The Company defines EBITDA margin as EBIDTA in relation to net sales. [) The Company defines EBITDAR as profit/loss for the year before net financial items, tax, depreciation/amortisation and impairment of PPE and intangible assets, capital losses from the disposal of non-current assets and operating lease costs. Y) The Company defines EBITDAR margin as EBITDAR in relation to net sales. _) EBITDA and EBITDAR are non-IFRS measures and are not substitutes for any IFRS measure. Nobina uses these measures for many purposes in managing and directing the Company. The reconciliation of profit/loss for FYXY/X_, FYX[/XY and FYX^/X[ to EBITDA and EBITDAR is as follows: For the financial year (SEK million) ABCD/ABCF ABCG/ABCD ABCA/ABCG

Profit/loss for the year ]J WT TZ Tax Yb [X –`Z Net financial items ^[a ^[Z ^__ Depreciation/amoritisation and impairment of PPE and intangible assets _X` YZX Y`Y Capital losses from the fisposal of non-current assets [_ X_ X_ EBITDA ]YY XUY \YW Operating lease costs Zb XYX ^a^ EBITDAR I,ZI] ]\U ]Y\

6 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) SUMMARY

B.7 Selected historical Summary of key performance indicators, cont. financial `) The Company defines equity free cash flow as cash flow for the year before certain cash flow items from financing activities, information certain cash flow items from operating activities and financial expense (from the income statement), all of which relate to the Company’s bond or incentive programme. The reconciliation of cash flow for the year for FYXY/X_, FYX[/XY and FYX^/X[ to cont. equity free cash flow, EBITDA and EBITDAR is as follows: For the financial year (SEK million) ABCD/ABCF ABCG/ABCD ABCA/ABCG

Cash flow for the year IJI I\U UU Cash flow from financing activities New share issue – – –^ New issue of shares (to bond holders) – – –XfX Borrowing expenses Xf – [Y New borrowing, other external loans – – –__X New borrowing, including payment of old bonds (SEK `b million) –Yf[ – – New issue of shares to senior executive –X – – Amortisation of bond loan and other external loans Yf_ – b[[

Cash flow from operating activities Adjustments for non-cash items Other items –^` –_ –X_ Changes in provisions, pensions, etc XX Z f Financial expense (from cash flow statement) –^aZ –^[_ –^_Z Unrealised foreign exchange gains/losses ` –^ Xa

Financial expense (from income statement) ^[f ^Yf ^`Y Equity free cash flow IXZ IXX \J Cash taxes X – ^ Net financials (excluding financial leasing interest expense) a) `_ ba ba Change in restricted cash –YX –XY ^` Asset disposals –YX –XY –[_ Underlying cash flow X`Y ^[a X[b Lease payments b) `Za `YX `ab Underlying cash flow before lease payments f_Y fbX bYY Cash-financed capital expenditure c) X^b [Z X^b Debt-financed new vehicles c) –ZX[ –^_^ –X,X^Z New vehicle investments c) ZX[ ^_^ X,X^Z Change in net working capital –_Z –bf –XY` EBITDA ]YY XUY \YW Operating lease cost Zb XYX ^a^ EBITDAR I,ZI] ]\U ]Y\

a) Includes interest paid, received interest income less finance lease interest expense. b) Includes amortisation of finance lease liability and finance lease interest expense. c) The Company’s investments mainly relate to purchases of vehicles. New vehicles are principally financed with asset-backed debt financing, of which the vast majority under finance lease arrangements. The following table illustrates Nobina’s invest- ments for the last three years and sources of financing:

For the financial year (SEK million unless otherwise stated) ABCD/ABCF ABCG/ABCD ABCA/ABCG

Uses Intangible assets W W IJ Cost for improvements on third-party properties Z X Xb Equipment, tools, fixtures and fittings Y` XX XZ Vehicles Zfa ^bY X,^a` Total tangible assets I,ZUW YXT I,YJY Total procurement of intangible and intangible assets I,ZJZ Y]I I,YWT

Sources New finance leases bY_ ^_^ X,X^Z Asset-backed financed vehicles X`f – – Debt-financed new vehicles ]IU YWY I,IY]

Cash-financed capital expenditure IY\ U] IY\ Cash-financed capital expenditure as a percentage of net sales (%) X,b a,_ X,f

Vehicles Zfa ^bY X,^a` Debt-financed new vehicles –ZX[ –^_^ –X,X^Z Net cash-financed vehicle capital expenditure T\ YY \\

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 7 SUMMARY

B.7 Selected historical Recent developments financial e Company’s results after +* February +)%$, up to and including 0) April +)%$, were in line information with expectations. Net sales increased in both March and April, compared to the corresponding cont. periods of FY%&/%$, as a result of, among other things, volume growth of certain existing contracts in various regions and positive e#ects of revenue indexation. Operating expenses remained stable in March and April and slightly lower than in the corresponding periods of the previous year. No major tenders were announced and no material contracts were commenced during the period. B.8 Selected Not applicable. e Prospectus does not contain any pro forma 1nancial information. pro forma finan- cial information B.9 Profit forecasts Not applicable. e Company has not presented any pro1t/loss forecast. B.10 Audit report Not applicable. ere are no quali1cations in the audit reports. qualifications B.11 Working capital Not applicable. It is Nobina’s opinion that its available working capital is su8cient to meet the Group’s requirements for the period of %+ months from the date of this Prospectus.

SECTION C – SECURITIES C.1 Securities being e O#er comprises new and existing Shares in Nobina AB (ISIN: SE)))%$0$$*& before the offered Reverse Share Split and SE)))-%*$&%* after the Reverse Share Split). C.2 Currency e Shares are denominated in Swedish Krona (SEK). C.3 Number of issued As at the date of the Prospectus, there are (00,$$(,*+0 Shares in issue, each with a quota value of shares and par SEK ).0(. All Shares are fully paid up. value e annual general meeting held on +- May +)%$ resolved upon a %:%) Reverse Share Split, i.e. ten (%)) Shares will be exchanged into one (%) Share whereby the quota value of the Shares will increase from SEK ).0( to SEK 0.() and the number of Shares will decrease from (00,$$(,*+0 to (0,0$$,(*+. As at the date of this Prospectus, the Reverse Share Split has not yet been registered with Euroclear, but registration is expected to occur on or around * June +)%$. After the Reverse Share Split and the O#er, the Company’s share capital will, assuming a price in the O#er at the midpoint of the O#er Price Range, amount to a maximum of SEK 0%%,'%(,)-+ divided into a maximum of *(,(&0,0$0 Shares. C.4 Rights attached to All Shares rank equally for voting purposes. Each Share in Nobina entitles the holder to one vote the securities at shareholder meetings. All Shares rank equally for any declared dividends. All Shares rank equally for the right to receive a relative proportion of Shares in the event of a capitalisation of reserves and for any distributions in the event of a winding up of the Company. If Nobina issues Shares, warrants or convertibles in a cash issue or a set-o# issue, shareholders will, as a general rule, have pre-emption rights to subscribe for such securities proportionally to the number of Shares held prior to the issue. C.5 Transfer restric- Not applicable. e Shares are not subject to any restrictions on transferability. tions C.6 Admission to trad- Nasdaq Stockholm’s listing committee decided on %' May +)%$ to admit Nobina’s Shares to trad- ing on a regulated ing on Nasdaq Stockholm, subject to, among other things, the distribution requirement being market ful1lled no later than on the 1rst date of trading. Trading is expected to begin on %* June +)%$. C.7 Dividend policy Under normal circumstances (taking into account Nobina’s cash 7ow, investment needs and general business conditions), the Company expects to distribute annual dividends in excess of -$5 of EBT. For the current 1nancial year ending +' February +)%(, in the absence of unforeseen circumstances, Nobina expects to declare dividends of at least -$5 of adjusted EBT (EBT for the 1nancial year ending +' February +)%( will be adjusted for costs relating to the O#er as well as all costs accounted for in relation to the interest on, and early repayment of, the outstanding senior bond and costs related to the payments under the management incentive programme). Nobina has not made any dividend payments for FY%&/%$, FY%0/%& or FY%+/%0.

8 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) SUMMARY

SECTION D – RISKS D.1 Key risks specific Nobina is subject to risks that are wholly or partly outside of its control and which a#ect or may to the issuer and a#ect the Group’s operations, results, 1nancial position and future prospects. e following risk its industry factors, which are non-exhaustive and described in no particular order, are considered to be the key risks for the Group’s future development. t e Group’s prospects and future 1nancial and operational performance are dependent on its ability to win new tra8c contracts over time and to secure extension options under its existing contracts with public transport authorities. t e Group depends on its ability to accurately price contracts and identify risks and it may be adversely a#ected by long-term contracts won on the basis of inaccurate price and risk assumptions. t e tender process for public transport is highly regulated, rigid and transparent. e Group becomes legally bound by the conditions of long-term, in7exible contracts, which may be unpro1table and which generally cannot be re-negotiated or terminated early. t A PTA contract may be unpro1table during its initial phase due to high costs and weak cash 7ows at the outset. t Failure to meet contract conditions may result in penalties or early termination. A material change of control of an operator may require PTA approval or permit early termination. t e Group’s work with the public sector exposes it to public scrutiny and reputational risks. t e Group operates in a highly competitive industry and faces competition from other trans- port operators. t Competition from other modes of transport may adversely a#ect demand for the Group’s services. t Revenue indexation provisions in PTA contracts may not fully compensate the Group for cost variations. t e Group may be adversely a#ected by an inability to implement e8ciency initiatives, including being unable to use its existing 7eets of buses in existing and future PTA contracts. t Fluctuation in the price and availability of fuel may reduce the Group’s pro1tability and adversely a#ect its operations. t e Group’s business may be adversely a#ected by severe weather conditions. t A trend towards the use of incentive contracts increases the Group’s exposure to certain risks. t e Group is dependent upon its managers and key employees. t e Group is heavily dependent on the availability of bus drivers and shortages may increase operating costs or result in penalties for reduced services. t Substantially all of the Group’s employees are parties to collective bargaining agreements and trade unions. D.1 Key risks specific t e Group is subject to various complex regulations and any violations of or changes in such to the issuer and regulations could disrupt the Group’s business. its industry t Public tender processes are subject to third party challenge and may be reversed. cont. t e Group’s e#ective tax rate may vary due to numerous factors including changes in tax laws in any of the jurisdictions in which the Group operates. t Nobina Europe may be unable to repay its outstanding bonds and may therefore continue to be subject to certain restrictions and risks including regarding the payment of dividends. t e Group may be unable to obtain 1nancing on favourable terms, or at all. t e Group may be unable to secure lease 1nancing to acquire new buses on favourable terms, or at all.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 9 SUMMARY

D.3 Key risks specific Any investment in securities involves risks. Any such risks could cause the trading price of to the Shares Nobina’s Shares to decline signi1cantly and investors could potentially lose all or parts of the value of their investment. Risks related to the Shares include the following: t An active, liquid and orderly trading market for the Shares may not develop, the price of the Shares may be volatile, and potential investors could lose a portion or all of their investment. t e Group’s ability to pay dividends in the future may be constrained and depends on several factors.

SECTION E – OFFER E.1 Net proceeds and e Company expects to receive net proceeds amounting to approximately SEK --& million expenses from the Company’s issue of new Shares in connection with the O#er, after deduction of costs related to the O#er, including commissions and fees to the Joint Bookrunners and other advi- sors, which are estimated to be approximately SEK -( million. e Company will not receive any proceeds from the sale of the Shares o#ered by the Selling Shareholders. E.2a Reasons for the Nobina is the largest and most experienced public bus transport operator in the Nordic region. Offer and use of e Company’s expertise in prospecting, tendering and active management of public bus trans- proceeds port contracts in combination with long-term delivery quality makes Nobina an industry leader in terms of pro1tability, development and initiatives that promote a healthier industry. e overriding 1nancial objectives of the Company’s operations are to generate stable and pro1table growth. Nobina’s Board of Directors believes that listing the Company’s Shares on Nasdaq Stockholm is an important step in Nobina’s development, as it will further increase awareness of the Company’s business and activities, strengthen Nobina’s pro1le and brand with investors, clients, business partners and passengers as well as increase the ability to attract and retain quali- 1ed employees and key management. e listing will broaden the Company’s shareholder base and enable access to capital through the Swedish and international capital markets. Furthermore, it will facilitate a partial monetisation of the Selling Shareholders’ holdings in line with their business model and provide a liquid market for their retained Shares going forward. Transparen- cy and understanding of the Nordic public bus transport market in general and Nobina in par- ticular will also be enhanced by the listing. For these reasons, the Board of Directors has applied for listing on Nasdaq Stockholm. e Company expects to receive net proceeds from the O#er of approximately SEK --& mil- lion, after deducting transaction costs payable by Nobina of approximately SEK -( million, in aggregate. Nobina will use the net proceeds to wholly redeem the Bonds prematurely, which will result in a payout from the Company of a total of SEK (0* million. ereby the Company will reduce its debt by SEK $$) million as well as decrease its 1nancial expenses. e remaining net proceeds from the O#er will be used to cover the costs of the management incentive programme (see further, E.&).

10 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) SUMMARY

E.3 Terms and e O#er comprises between $%,%&',()( and (%,*+%,$*+ Shares, of which the Company is o#ering conditions of such number of new Shares, not to exceed +$,-$-,$-(, as will raise gross proceeds of SEK *$) mil- the Offer lion and the Selling Shareholders are o#ering between +',*'',()( and 0(,)(&,))( existing Shares. Sothic Capital, Anchorage and Invesco have granted an option to the Joint Global Coor- dinators, on behalf of the Joint Bookrunners, to purchase up to -,&%*,$') additional Shares in the Company to cover any potential over-allotment or other short positions in connection with the O#er. e O#er is addressed to the general public in Sweden, as well as to institutional investors in Sweden and abroad. e O#er Price Range is between SEK 00–&) per Share. e application period is between &–%( June +)%$ for the general public in Sweden and between &–%- June +)%$ for institutional investors. e application period for the general public in Sweden may be terminated prior to 0:)) p.m. CET but not earlier than %+:)% a.m. CET on %( June +)%$. e application period for institutional investors may be terminated prior to %- June +)%$, and any such amendment to the application period is expected to be announced by the Company through a press release by the latest %- June +)%$. e 1nal price in the O#er is expected to be announced by a press release around %* June +)%$. Applications for acquisition of Shares within the terms of the O#er should be made either by internet via Danske Bank’s website or by using the special application form. Application forms are available on Nobina’s website (www.nobina.com) as well as Danske Bank’s website (www.danskebank.se/prospekt). Application forms can also be sent to: Danske Bank A/S, Danmark, Sverige Filial Payment & Asset Services – Issues Box -$+0 SE-%)0 '+ Stockholm E.4 Interests material From time to time, the Joint Bookrunners and their respective a8liates have provided, and may to the Offer provide in the future, services within the context of their day-to-day operations to the Company or the Selling Shareholders and to parties related to them in connection with other transactions, including, but not limited to, commercial banking, investment banking, 1nancial advisory, and other services. In particular, Danske Bank is lender under Nobina Europe’s credit facility. Addi- tionally, the Joint Bookrunners may, in the ordinary course of their business, hold the Compa- ny’s securities or securities of the Selling Shareholders for investment on behalf of their respective clients. With respect to certain of these transactions and services, the sharing of information is generally restricted for reasons of con1dentiality, internal procedures or applicable rules and reg- ulations. e Joint Bookrunners have received and will receive customary fees and commissions for these transactions and services and may come to have interests that may not be aligned or could potentially con7ict with the interests of potential investors, the Company and/or the Sell- ing Shareholders. e Company has a management incentive programme for members of the Group Manage- ment (including the Chief Executive O8cer) and a management incentive programme for mem- bers of the Board of Directors (excluding the Chief Executive O8cer). e Company’s aggregate cost for these two programmes amount to SEK %-+ million (including social security contribu- tions and taxes), of which the Group Management will be entitled to an aggregate amount of approximately SEK %++ million (excluding social security contributions and taxes) and the Board of Directors will be entitled to an aggregate amount of approximately SEK %% million (excluding social security contributions and taxes). Payment will be made in connection with the closing of the O#er and, to that end, the participants in both programmes have undertaken to reinvest an amount equivalent to -$5 of the amount paid (net of tax) into Shares by way of purchasing Shares in the O#er. For this purpose, participants in the management incentive programme will be guaranteed an allocation of Shares in the O#er. Assuming a price at the mid-point of the O#er Price Range, members of the Group Management and the Board will purchase a total of %,+&',0%$ Shares. e purchased Shares will be subject to lock-up undertakings. See further E.$. In addition, John Allkins, a director of the Company, has expressed an intention to acquire, in addition to the Shares he purchases by way of re-investment under the management incentive programme, such additional number of Shares in the O#er as will amount to a total of SEK -)),))), of which the number of Shares will be determined based on the 1nal price of the O#er. ese Shares will also be subject to a lock-up undertaking.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 11 SUMMARY

E.5 Seller / lock-up e Selling Shareholders will sell Shares pursuant to the O#er. arrangements Pursuant to the Placing Agreement, the Company will agree with the Joint Bookrunners that it will not, for a period of 0() days from the 1rst date of trading of the Shares, without the prior written consent of the Joint Bookrunners, submit to its shareholders any proposal for a capital increase that would enable it to, or otherwise take any action to, directly or indirectly issue, o#er, pledge, sell, contract to sell, or otherwise dispose of any securities of the Company that are sub- stantially similar to the Shares, including any securities that are convertible into or exchangeable for, or that represent the right to receive, Shares of the company; and not to purchase or sell any option or other security or enter into any swap, hedge or other agreement that would have similar economic consequences to such actions. e Company’s undertaking is subject to certain cus- tomary exceptions and shall also not apply in connection with the Company’s historical, current or future share-based incentive schemes. e Selling Shareholders and the members of the Board of Directors and Group Management of the Company will each undertake to the Joint Bookrunners not to, with the prior written con- sent of the Joint Global Coordinators, o#er, pledge, sell, contract to o#er, pledge or sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any Shares or any securities of the Company that are convertible into or exercisable or exchangeable for, or that represent the right to receive, Shares of the Company or any such substantially similar securities; enter into any swap, hedge or other agreement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Shares; or propose or vote in favour of a capital increase proposed with respect to the Company, unless the Company itself would be permitted to make such proposal, whether any such transaction is to be settled by delivery of Shares, in cash or otherwise, for a period of %*) days from the 1rst day of trading of the Shares for the Selling Shareholders and for a period of 0() days from the 1rst day of trading of the Shares for the mem- bers of the Board of Directors and Group Management. (Such lock-up restrictions will also apply to the Shares purchased by members of the Board of Directors and Group Management by way of re-investment of amounts received under the management incentive programme). e forego- ing shall not apply to: certain disposals of Shares to family members, partners, directors and enti- ties under common control, provided that the transferee agrees to a lock-up; any disposal pursu- ant to a bona 1de third-party takeover o#er or other similar transaction; any disposal in connection with a redemption or buy-back of shares by the Company; rights in connection with a pre-emptive o#ering by the Company; any transaction required by law or regulation; any trans- fer or deposition of Shares to a capital insurance or an investment savings account, subject to cer- tain conditions; transactions relating to Shares or other securities acquired in open market trans- actions after the completion of the O#er. Furthermore, the lock-up restrictions do not prevent the Selling Shareholders from holding their Shares through a prime broker or custodian, who is able to make certain transactions with the Shares for its own account, or from granting a security interest over the Shares, with a right of sale in the event of default. E.6 Dilution e issue of Shares in connection with the O#er could, assuming a price at the mid-point of the O#er Price Range, increase the number of the Company’s Shares by up to +0,+*-,(-%, i.e. to a total of *(,(&0,0$0 Shares, corresponding to a dilution of +-5. E.7 Expenses charged Not applicable. Brokerage commission will not be charged. to the investor

12 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) RISK FACTORS

RISK FACTORS

An investment in Nobina involves a high degree of risk. Investors should carefully consider each of the risks described below and all of the other information set forth in this Prospectus before deciding to invest in the Shares. If any of the following risks actually occur, the Group’s business, 1nancial condition and results of operation could be materially adversely a#ected. In such case, the trading price of the Shares could decline and investors may lose all or part of their investment. e risks described below are not the only ones applica- ble to the Group. Additional risks that are not currently known to the Group, or that it currently, based on its regular risk assessment, considers to be immaterial, may also impair the Group’s business operations and have a material adverse e#ect on its business, 1nancial condition and results of operation. e order in which the individual risks are presented does not provide an indication of the likelihood of their occurrence nor of their severity or relative signi1cance. e Prospectus also contains forward-looking statements that are based on assumptions and estimates and are subject to risks and uncertainties. e Group’s actual results could di#er materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, the risks described below and elsewhere in this Prospectus.

RISKS RELATED TO NOBINA The Group depends on its ability to accurately price Risks related to the industry and business contracts and identify risks and it may be adversely The Group’s prospects and future financial and operational affected by long-term contracts won on the basis of performance are dependent on its ability to win new traffic inaccurate price and risk assumptions. contracts over time and to secure extension options under Each one of the Group’s PTA contracts is awarded after a for- its existing contracts with public transport authorities. mal competitive tender process. In addition to requiring the e Group’s clients are primarily public transport authorities Group to commit signi1cant management time and 1nancial (“ PTAs ”) in the Nordic region. e Group’s contracts with resources, this tender process presents a number of risks, PTAs accounted for '(5 of its net sales in FY%&/%$. Contracts including the risk that the Group may incorrectly estimate the with PTAs are awarded to operators following a competitive resources and costs that will be required to service any con- tender process. As these contracts are generally 1xed-term tract or fail to identify and safeguard itself against certain contracts, applicable law requires that they be re-tendered at operational risks. For example, prior to submitting a bid on a the end of their respective terms. While the Group does not PTA contract, the Group must determine the price at which it expect to renew and win all contract tenders, the Group’s is prepared to enter into the contract. Determining the price prospects and 1nancial and operational performance are requires it to make a series of assumptions about the future dependent on its ability to continue to win a proportion of costs of operating the contract so that the contract meets the them over time. If the Group is unable to win new PTA con- Group’s internal margin and return on investment require- tracts over time or to secure extension options (typically of one ments over the length of the contract, which is typically 1ve to to two years) under its existing contracts when they expire, or ten years. ese cost assumptions include, but are not limited wins contracts at a level below what it expects or has been able to, tra8c planning and bus allocation, lease payments for to achieve in the past, this would have a material adverse e#ect depots and parking lots, fuel costs, personnel costs and man- on the Group’s business, 1nancial position and results of oper- agement expenses relating to operating a PTA contract. While ations. management invests signi1cant employee time and 1nancial Price is typically one of the factors that PTAs focus on when resources in reviewing and pricing contract tenders, the pro- awarding public bus transport contracts. e Group’s pricing, cess is ultimately subjective and, as such, susceptible to human in turn, depends largely on its ability to conduct an accurate error. In addition, estimating risks and operational issues that risk assessment, evaluate and secure the e8ciency of its opera- may occur during the life of a contract is inherently di8cult tions and realise potential economies of scale. e Group’s and uncertain and a failure to accurately do so may result in competitiveness and ability to win PTA contracts is, therefore, the Group incorrectly pricing a contract or taking insu8cient closely linked to the e8cient management of its 7eet of buses steps to otherwise protect the Group’s 1nancial or operational and operation of existing PTA contracts. Any deterioration in interests. Furthermore, PTAs are generally entitled to make the Group’s competitiveness could a#ect its ability to win new changes to the Group’s contractual obligations through varia- PTA contracts which could, in turn, have a material adverse tion orders, even though the potential consequences, such as e#ect on the Group’s business, 1nancial position and results of cost, may not be fully clari1ed in advance and therefore not operations. taken into account in the Group’s price and risk assessment.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 13 RISK FACTORS

Although the Group would normally have the right to risks or conditions described above could have a material demand price adjustments for any extra costs incurred in this adverse e#ect on the Group’s business, 1nancial condition and situation, the right to additional remuneration is not always results of operations. clear and may result in time-consuming negotiations and may limit the Group’s ability to implement its planned e8ciency A PTA contract may be unprofitable during its initial phase initiatives. Additionally, the right to request compensation due to high costs and weak cash flows at the outset. may only be triggered after a certain amount of variation, for e Group’s contracts typically begin with high costs and instance, where a change in route production exceeds a certain weak cash 7ows due to the need to make signi1cant invest- percentage. If any of the Group’s assumptions about price and ments before commencing a contract, for example, in a new risk are inaccurate, it may win contracts with low pro1t mar- vehicle 7eet, and because it may be di8cult to run fully e8- gins or contracts that must ultimately be operated at a loss. cient operations from the outset of a contract as it takes time e vast majority of the Group’s operating costs are 1xed once for a new operator to design an e8cient travel plan and deter- a contract is signed and cannot be reduced to accommodate mine the most e8cient use of buses. As the revenue from the inaccurate assumptions used in the tender process. Such con- majority of contracts is 1xed during the life of the contract tracts may therefore be unpro1table for a limited period of (although indexed for adjustments in certain expenses), the time or for the life of the contract. Inaccurate pricing and the Group’s contracts may be unpro1table during their initial resulting entry into unpro1table contracts could have a mate- phase, with pro1tability improving throughout the life of the rial adverse e#ect on the Group’s business, 1nancial condition contract. e 1nal years of a contract, particularly the years and results of operations. where contracts are extended past the original term of the contract, are therefore generally the Group’s most pro1table The tender process for public transport is highly regulated, and produce the most signi1cant 1nancial return of bus capi- rigid and transparent. The Group becomes legally bound tal. If a number of older contracts expire, and the Group com- by the conditions of long-term, inflexible contracts, which mences a number of new contracts during the same period may be unprofitable and which generally cannot be (i.e., the average age of the Group’s contract portfolio decreas- re-negotiated or terminated early. es), it would reduce the Group’s margins, consume cash and A substantial part of the Group’s total revenue is generated expand 1xed assets and liabilities. is, in turn, would have a through contracts with PTAs. e Group’s work with public- material adverse e#ect on its business, 1nancial condition and sector clients subjects the Group to various risks inherent in results of operations. In addition, due to the pro1tability pro- government contracts, which are based on commercial terms, duced where contracts are extended past their original terms, or concluded in a contracting environment, that may be dif- to the extent that contracts are not extended, this could have a ferent from the terms or contracting environment that may material adverse e#ect on the Group’s business, 1nancial con- prevail in commercial arrangements with private entities. dition and results of operations. Terms and conditions of public contracts tend to be more onerous and more di8cult to negotiate than those in commer- Failure to meet contract conditions may result in penalties cial contracts. e Group typically enters into 1ve to ten year or early termination. A material change of control of an contracts with PTAs where the pricing terms, cost indices and operator may require PTA approval or permit early scope of operations are determined by the PTA at the com- termination. mencement of the contract. Operators are generally unable to e Group must manage its contracts in accordance with their have bilateral discussions with PTAs and are only entitled to terms and must adapt to developing and unanticipated cir- ask questions relating to upcoming tenders, which must be cumstances during the life of a contract. Any breach of con- made in writing and formally lodged. ese questions, and tract by the Group could result in the imposition of penalties the written responses provided, are a matter of public record. by PTAs, including for: failing to meet performance criteria In addition, submitted tenders are made public to all other by way of service disruption; missing punctuality targets; fail- bidders once the contract is awarded and bidders are then giv- ing to respond to customer complaints; failing to adhere to en full transparency of competing bids, which gives competi- certain quality standards or vehicle speci1cations; failing to tors a view of the Group’s current operating models, which repair defects in vehicles; or failing to apply relevant monitor- may reduce its competitive advantage. is results in competi- ing systems or return self-assessment performance reports. tors employing tactics and exposes the Group to challenge Penalties are typically imposed on a per-occurrence or per day from other bidders (see further “ —Public tender processes are basis and transport contracts do not provide for caps on the subject to third party challenge and may be reversed ”). penalties accrued. In particular, a small number of the In addition, during the tender process, an operator only has Group’s contracts contain signi1cant penalties in the event of access to the key terms of the tender contract. If the Group is a failure to commence the transport services by a certain con- successful in making a bid, it is expected to sign the full agree- tractual date. One such contract which the Group recently ment, whose provisions extend beyond those anticipated in entered into provides for a 1xed penalty of SEK %% million for the key terms. Following the award of a contract, the Group each week of delay. Penalties would reduce the operating pro1t must perform the contract as tendered, even if unpro1table, earned by the Group from the relevant contract and could and there is generally no, or only very limited, scope to rene- have a material adverse e#ect on the Group’s business, 1nan- gotiate the terms of the contract. e occurrence of any of the cial condition and results of operations. Furthermore, in the

14 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) RISK FACTORS

event of material or persistent breaches of contract, PTAs are inclined to underbid on tenders in an e#ort to gain market entitled to terminate contracts with the Group before the end share, even if it means winning contracts on pricing terms that of the contract term. A number of the Group’s contracts con- are below their actual costs. Sustained or increased price com- tain change of control clauses which apply in the event of a petition could hinder the Group’s ability to win contracts with change of control, including in relation to the O#er. Such PTAs and could decrease its market share. If the Group is clauses may either grant the PTA the right to terminate the forced to signi1cantly reduce its prices or if it fails to win new contract or require the subsidiary to 1rst obtain the PTA’s PTA contracts, this could have a material adverse e#ect on its approval to the change of control or result in the Group being business, 1nancial condition and results of operations. liable to pay damages. If the Group is unable to replace reve- nues from any terminated contracts within a reasonable time Competition from other modes of transport may adversely period, the Group’s revenues and operating income would affect demand for the Group’s services. decline. In addition to the 1nancial impact, there is also the Regional bus services risk that the imposition of penalties or the early termination of Bus ridership levels depend on passenger preference. Automo- contracts due to a failure to meet contractual conditions could bile travel is the largest competitor for ridership for the Group’s cause the reputation of the Group to su#er and so too its abili- regional business. ere can be no assurances that increased ty to secure future business. Early termination of contracts environmental awareness or other socio-economic drivers such could therefore adversely impact the Group’s business, results as the cost of fuel will change passenger preference for auto- of operations, 1nancial position and prospects. mobile travel. If fuel costs decline, automobile ridership may instead increase. If environmental concerns, tra8c and price The Group’s work with the public sector exposes it to public considerations shift passenger preference away from automo- scrutiny and reputational risks. biles, there can be no assurances that there will be an increased Public contracts, and the proceedings surrounding them, are demand for public bus services over public train services, where often subject to more extensive scrutiny and publicity than these services overlap. e Group also faces competition from commercial contracts with private entities. e visibility and rail, metro and trams. Should demand for bus services decrease political nature of the Group’s contracts with PTAs, including or fail to increase in the future, the scope of new PTA contracts the public source of their underlying funding, therefore pre- may be adversely a#ected and the Group may not be able to sents a heightened risk to its reputation and its relationships grow its operations. Any of these developments could have a with PTAs. Negative publicity related to the Group’s contracts, material adverse e#ect on the Group’s business, 1nancial con- regardless of the accuracy of such publicity, may damage the dition, results of operations and future prospects. Group’s business by a#ecting its ability to compete for new contracts. is could a#ect not only the Group’s business with Interregional bus services the particular PTA involved, but also its business with other is division of the Group’s business similarly faces competi- PTAs and its private business relations within interregional tion from other modes of transport, including rail, air tra8c bus services. Political and economic factors such as the out- and private automobile travel, and bus ridership levels again come of pending or recent elections, changes in leadership depend on passenger preference. As regards domestic air trav- among local parties and civil servants, changes to tax policies el, bus travel generally becomes less popular in correlation and reduced tax revenue also can a#ect the number and terms with the greater the distance travelled. Although interregional of new contracts tendered and ultimately signed. e occur- bus services account for only &5 of the Group’s revenue, the rence of any of the above risks could have a material adverse demand for interregional bus services a#ects the results of e#ect on the Group’s business, 1nancial condition and results operations from this division of the business and a deteriora- of operations. tion in the interregional bus ridership levels could have a material adverse e#ect on the Group’s overall business, 1nan- The Group operates in a highly competitive industry and cial condition and results of operations. faces competition from other transport operators. e Group faces competition from multinational competitors, Revenue indexation provisions in PTA contracts may not regional competitors and entities owned and operated by fully compensate the Group for cost variations. municipalities and counties as well as from local, independent PTA contracts provide for a fee to be paid to the Group in entrepreneurs. e Group believes that its most signi1cant return for providing bus operations for the routes and sched- competitors in regional bus transportation are the French- ules described in the contracts. e amount of the fee the owned Keolis, part French-owned Transdev, German-owned Group receives is adjusted periodically based on several cost Arriva and Norwegian-owned Nettbuss. In addition, some of indices that are intended to compensate for in7ation of the the Group’s competitors, in particular state-backed entities, Group’s costs during the term of the speci1c PTA contract. are much larger in speci1c markets and have signi1cantly e cost indices used are based on labour costs, fuel costs, greater 1nancial and other resources than the Group. ese consumer price indices and other items, which sometimes competitors may also have lower 1nancial return expectations, include interest rate 7uctuations. e index weighting in the allowing them to reduce their prices to win contracts at levels Group’s contract portfolio may deviate from its actual cost that would not be pro1table for the Group. Some of the structure, so that revenue indexation adjustments do not fully Group’s competitors, in particular small operators, may be compensate for the Group’s cost variations. Historically, some

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 15 RISK FACTORS

PTAs have not provided %))5 index coverage under their pro- e8ciency initiative. erefore, failure to implement any of its posed tender terms, which is important to take into account e8ciency initiatives may have a material adverse e#ect its when pricing a tender bid. Depending on the contract, index pro1t, 1nancial condition and results of operations. adjustment occurs on a monthly, quarterly, semi-annual or In particular, PTA contracts typically require that buses annual basis and is generally applicable to the future contract used on each contract meet speci1c environmental and techni- period, and not applied retroactively to the contract period cal standards, including the type of fuel, bus size, bus age, prior to such adjustment. is means that there is generally a and the number of seats and doors. It may not be possible to time lag between changes in the Group’s costs and the index retro1t or adapt the Group’s existing 7eet of buses to meet the adjustment. Fee adjustments are not intended to fully reim- requirements of a particular PTA contract, at all, or without burse the transport provider, but rather to adjust the fees paid 1rst undergoing costly renovations. In addition, where buses to the transport provider going forward and, as a result, cost are leased with certain speci1cations for the purposes of indices by their nature may never provide for full, timely com- ful1lling a particular contract, the Group may be unable to pensation of actual costs and cost increases. utilise those buses in other contracts, once the original con- e Group is also exposed to the risk that its actual expens- tract has expired. e Group may therefore be required to es diverge from the macro economic factors that the cost replace its buses earlier than at the end of their useful life. indices use to adjust fees. For example, in some past 1nancial An inability to move buses between PTA contracts could limit years, the salaries of the Group’s drivers in certain jurisdic- the e8ciencies that the Group could obtain from maximising tions have increased more than the market-related index. Part the use of its existing bus 7eets. In addition, this exposes the of the reason for this discrepancy is that the salary indicators Group to the increased potential for residual value losses in its used by many of the indices in the contracts include truck bus 7eets. e above circumstances could have a material drivers and train drivers. ere have historically been exam- adverse e#ect on the Group’s results of operations, pro1tability ples of mismatch between the costs that an underlying index and 1nancial position. is aimed to address and the costs incurred pursuant to a PTA contract, for example, such that the index set forth in the Fluctuation in the price and availability of fuel may reduce PTA contract tracks diesel prices while the relevant contract the Group’s profitability and adversely affect its operations. requires buses to run on biogas. Should cost indices in current In FY%&/%$, the Group’s total costs for fuel amounted to SEK or future PTA contracts fail to adequately re7ect the Group’s %.% billion, corresponding to %&.&5 of the Group’s total net actual costs, changes in the Group’s costs that are not re7ected sales and %(.&5 of the Group’s total operating expenses. in the cost indices could have a material adverse e#ect on its Consequently, signi1cant changes in fuel availability or costs operating margins and pro1tability and, therefore, also a could materially impact the Group’s business, 1nancial condi- material adverse e#ect on its business, 1nancial condition and tion and results of operations. Fuel availability and prices are results of operations. a#ected by a number of factors, including environmental legislation and global economic and political developments, The Group may be adversely affected by an inability to which are outside of the Group’s control. e Group’s fuel implement efficiency initiatives, including being unable to costs may also be a#ected by annual increases in fuel taxes, use its existing fleets of buses in existing and future PTA which are only partially o#set by compensation from revenue contracts. indexation. See “ —Revenue Indexation provisions in PTA con- In recent years, the Group has focused on increasing its pro1t- tracts may not fully compensate the Group for cost variations .” ability by delivering its services under existing PTA contracts Moreover, there may also be a time lag from when the Group more e8ciently. To that end, it has introduced a number of begins to incur the increased fuel costs and when its revenue is e8ciency initiatives aimed at improving utilisation of resourc- adjusted under the index. Such delay could negatively a#ect es and reducing costs, primarily by planning its delivery of the Group’s cash 7ow and the balance between its accounts services more carefully and by centralising the management of receivable and accounts payable. In the event of a shortage in the Group’s bus 7eet. e Group may be unable to implement fuel supply resulting from a disruption of oil and biofuel its e8ciency initiatives for a number of reasons, including, but imports, reduction in production or otherwise, the Group not limited to, PTA contract limitations, requests from PTAs could face higher fuel prices or the curtailment of scheduled for variations to existing contract terms, human error, techno- fuel deliveries. logical error or unanticipated changes to its cost structure. Certain changes to a PTA contract are typically permitted if The Group’s business may be adversely affected by severe within a pre-agreed range, but if the requested changes exceed weather conditions. this agreed scope, the Group may be required to commence e Nordic region in which the Group operates experienced additional negotiations with the PTA. Such changes to exist- particularly severe weather conditions during the winter ing contracts, whether within a pre-agreed range or following months of FY)'/%) and FY%)/%%. ese adverse weather condi- re-negotiation of the contract, may limit the Group’s ability tions resulted in increased fuel consumption, damage to the to implement its planned e8ciency initiatives. If the Group Group’s buses and increased repair and maintenance costs fails to implement any e8ciency initiative, it will not gain the associated with such damage. Furthermore, the severe winter bene1t and/or increased pro1tability associated with such weather caused the Group to suspend some of its routes,

16 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) RISK FACTORS

which triggered penalties under some of its PTA contracts. The Group depends on Nobina Fleet for the majority of its e Nordic region may experience severe adverse weather bus leases and its business may be adversely affected by conditions during future winter months, which could expose the failure or non-performance of suppliers and the Group to similar or even greater increases in its operating counterparties. expenses than in FY)'/%) and FY%)/%%. Extreme weather e Group’s operating subsidiaries lease the majority of their conditions could consequently have a material adverse e#ect required buses from Nobina Fleet, a wholly-owned subsidiary on the Group’s business, 1nancial condition and results of of Nobina. Nobina Fleet, in turn, leases its buses under operations. 1nancial lease arrangements with external lease providers. If Nobina Fleet would be unable to secure such 1nancial lease A trend towards the use of incentive contracts increases arrangements on favourable terms, or at all, the Group may be the Group’s exposure to certain risks. unable to tender for new contracts (see further, “ —"e Group PTA in the Nordic region have traditionally structured tender may be unable to secure lease #nancing to acquire new buses on contracts as production contracts, pursuant to which the favourable terms, or at all .”). In addition, if the Group would tra8c operator is paid a 1xed compensation for running a be unable to continue to lease its buses from Nobina Fleet, for given network and timetable, based on the number of buses any reason, on favourable terms, or at all, the operational sub- deployed, worked hours and/or kilometres driven. e indus- sidiaries would need to source their buses through operational try is experiencing a move towards incentive contracts where- or 1nancial leases directly from lease providers outside of the by the operator’s remuneration is partly or entirely linked to a Group. ese factors may, in turn, have a material adverse variable component, such as number of passengers or certain e#ect on the Group’s business, 1nancial condition and results qualitative measurements, for example, timetable punctuality of operations. or amount of cancelled journeys). Although such contracts e Group is reliant on its suppliers, in particular in the create the opportunity to realise additional pro1t, they also vehicle and energy sectors, and is therefore exposed to the risk heighten the Group’s exposure to certain risks that may be of a supplier’s decreased willingness to transact with the outside of the Group’s control. Competition from other modes Group, adverse changes to supply terms, price rises and 1nan- of transport, seasonality, passenger preference, negative pub- cial di8culties, or any other counterparty failure. e Group licity towards the public transport sector generally and an relies on vehicle manufacturers for the timely delivery of buses inability to operate routes due to adverse weather conditions, which are suitable to meet the speci1c vehicle speci1cations in even on a short-term basis, would result in fewer passenger new PTA contracts. If manufacturers fail to deliver buses with numbers and thus directly impact remuneration. In addition, the correct speci1cations, the Group faces the risk of penalties. there is a risk of revenue leakage if passengers fail to present Although the cost of such penalties can typically be reclaimed their transport cards when using the transport service, with from a manufacturer as damages due to breach of contract, the result that a number of passengers are not accounted for in these damages may be irrecoverable if the manufacturer were an operator’s remuneration. For example, on certain routes, to experience 1nancial di8culties, enter into administration up to +)5 of passengers have been found to fail to register. or become insolvent. In addition, in a limited number of con- Although the Group would strive to achieve registration of all tracts, the penalties chargeable to the supplier, for example, for passengers, this would take time to implement and could con- late delivery, may not correspond to the penalty regime under tribute to reduced pro1tability of a contract in its initial oper- the relevant PTA contract, and the Group may therefore be ating years. e above factors could have a material adverse unable to fully recoup the losses caused as a result of the impo- e#ect on the Group’s business, 1nancial condition and results sition of penalties. Agreements are also entered into with third of operations. parties at Group level in respect of fuel, lubricants, spare parts and maintenance on behalf of the subsidiaries. Individual General economic and other factors can affect the level of subsidiaries within the Group also enter into direct agree- subsidies to PTAs and have an adverse effect on the Group. ments in respect of tyre supply, maintenance, inspection, PTAs demand for the Group’s services depends on the rele- property leases and with speci1c diesel suppliers. Such operat- vant municipality or county budgets and the funds allocated ing subsidiaries are highly dependent on regular fuel deliveries to public transportation. A recession, economic downturn, or in order to conduct reliable tra8c. ere is a risk that a third change in the political environment may a#ect government party supplier or counterparty is unable to deliver on its obli- policies, spending, private sector investment or interest rates. gations or to comply with its 1nancial commitment or is If economic conditions lead to long-term shifts in public sec- unwilling to continue to transact with the Group on terms tor policies, programmes or procurement methodologies, the acceptable to the Group. Such failures by counterparties may Group may be unable to maintain its existing levels of con- have a material adverse e#ect on the Group’s business, 1nan- tracts or be unable to maintain existing levels of pro1tability, cial condition and results of operations. which could have a material adverse e#ect on the Group’s business, 1nancial condition and results of operations.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 17 RISK FACTORS

The Group relies on the stability, security and availability maintenance. In the event that the Group is unable to replace, of its IT systems to operate its business. maintain or repair its buses and facilities in advance, the e Group relies on its IT support systems for all aspects of its Group will face decreased asset performance, as well as business, including its daily operational management, tra8c increased maintenance costs, delays and lost revenue due to planning and coordination, invoicing, ticket sales and reserva- unscheduled stoppages. Any decrease in the performance of tions for passengers, and 1nancial reporting. e Group also the Group’s assets, or signi1cant expenses incurred in repair- routinely transmits and receives personal, con1dential and ing damage, could negatively impact its business, 1nancial proprietary information (such as credit card details of its condition and results of operations. express bus passengers) and therefore relies on the secure pro- While Nobina believes that it has an adequate insurance cessing, storage and transmission of such information. ese coverage, there can be no assurances that the Group’s insur- operations depend on the e8cient and uninterrupted opera- ance will be su8cient to cover the loss arising from any or all tion of the Group’s IT systems. Any signi1cant disruption or such events or that the Group will be able to renew its existing failure caused by external factors, human error, unauthorised insurance on commercially reasonable terms, if at all. Any access, computer viruses, natural hazards, power loss or other damage caused by the Group that is not materially covered by similarly disruptive events including other security breaches insurance could have a material adverse e#ect on the Group’s could result in service interruption, misappropriation of con1- business, 1nancial conditions and results of operation. Any dential information, process failure or other operational di8- claims the Group makes under one of its insurance policies, or culties, which may, in turn, have a material adverse e#ect on the occurrence of an event or events resulting in a signi1cant the Group’s business, 1nancial condition and results of opera- number of claims being made, may also a#ect the availability tions. of insurance and increase the premiums the Group pays for its coverage. The Group’s business is subject to inherent operational risks and liabilities, in particular costs associated with The financial targets included in this Prospectus may differ damage to the Group’s fleet of buses, and such risks and materially from the Group’s actual results and investors liabilities may not be adequately covered by insurance. should not place undue reliance on them. e Group, as with all public transport operators, is exposed e 1nancial targets set forth in this Prospectus are the to the risk of operational incidents, including acts of terrorism Group’s expectations for the medium- to long-term, including and other acts of violence. Any operational or other safety revenue growth and EBT margin. ese 1nancial targets are incident involving loss of life or signi1cant damage to proper- based upon a number of assumptions, including the success of ty or assets, or harm to any person relating to the Group’s ser- the Group’s business strategies, which are inherently subject to vices, could result in a loss of public con1dence in the Group. signi1cant business, operational, economic and other risks, In addition, any operational or other safety incident involving many of which are outside of the Group’s control. While loss of life of signi1cant damage to property or assets or harm Nobina has detailed the key assumptions that it has made, to any person relating to the services of another public trans- these assumptions may not continue to re7ect the commercial, port operator, especially of buses, could result in a loss of pub- regulatory and economic environment in which the Group lic con1dence in the Group to the extent that the Group is operates. Accordingly, such assumptions may change or may perceived as conducting a similar business operation. Any not materialise at all. In addition, unanticipated events may such loss in public con1dence could have a material adverse adversely a#ect the actual results that the Group achieves in e#ect on the Group’s business, 1nancial condition and results future periods whether or not the assumptions otherwise of operations, as well as potentially impacting the ability of prove to be correct. As a result, the Group’s actual results may the Group to win and retain contracts. Safety incidents could vary materially from these targets and investors should not also give rise to the possibility that the Group’s operations may place undue reliance on them. be suspended or terminated and, accordingly, could have a material advise e#ect on the Group’s business, 1nancial condi- Risks relating to the Group’s employees tion and results of operations. The Group is dependent upon its managers and key In addition, the Group’s business and operations depend employees. upon the performance of its equipment, in particular its 7eet e Group depends on its continuing ability to identify, hire of buses and depots. e Group’s buses su#er damage due to and retain quali1ed and experienced managers and key accidents caused by its own drivers, third-party drivers, employees for its business development and management. weather and damage caused by vandals. Although the Group e Group relies on its senior managers to execute its opera- is insured against the e#ect of a range of potential losses asso- tional strategies and to identify and pursue new business ciated with its 7eet of buses and other facilities, the Group opportunities and relies on local managers for its day-to-day may choose to pay for the costs of damage and repair itself operations. e Group’s ability to hire and retain quali1ed through full self-coverage to keep the insurance premiums people depends on a number of factors, some of which are out- down. In the aggregate, the costs of these repairs can be sub- side of its control, including the competitive environment in stantial. In addition, as the Group’s buses and facilities age, the local employment markets in which the Group operates. their performance or e#ectiveness may become impaired, e loss of a manager or any other key employee due to, for which may lead to decreased productivity, delays or costly example, such employee leaving to work for a competitor or

18 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) RISK FACTORS

retiring, may result in a loss of institutional know-how and Substantially all of the Group’s employees are parties to may signi1cantly delay or prevent the achievement of the collective bargaining agreements and trade unions. Group’s development objectives or the implementation of its e Group’s workforce is largely unionised, with employees business strategy. If the Group is unable to hire or retain qual- represented by approximately %0 di#erent unions. In all coun- i1ed and experienced managers and key employees, this could tries where the Group has operations, collective bargaining have a material adverse e#ect on its business, 1nancial condi- agreements are applied in accordance with the trade union tion and results of operations. that represents employees in the industry where each Group company is active. e Group’s relationships with works Increases in the cost of labour may reduce the Group’s councils and trade unions are therefore important. e pres- profitability. ence of works councils and trade unions may limit the Group’s Labour costs represent a major operating expense for the 7exibility in dealing with its workforce and ultimately lead to Group. Labour costs are dependent upon, among other increased operating costs. things, unemployment levels, demand and supply imbalances Collective bargaining agreements are subject to periodic in various geographic regions, prevailing wage rates, collective renegotiation at various dates, typically every one to three bargaining arrangements, insurance costs, changes in employ- years. Although the Group places focus on good employee ment and labour legislation and employee turnover rates in relations and has well-established practices for negotiations on the transport industry. e Group is compensated for working hours, terms of remuneration, information sharing increased labour costs to a certain extent by way of periodical and collaboration, strikes or work stoppages and interruptions contract fee adjustments based on macro-economic factors. have occurred in the past and could occur again if the Group Such index adjustments may, however, fail to re7ect the actual is unable to renew the collective bargaining agreements on costs incurred by the Group and be insu8cient to fully com- satisfactory terms or if the Group’s industrial relations deterio- pensate for the increased costs (see further, “ —Revenue Index- rate. A lengthy strike or other work stoppage by the Group’s ation provisions in PTA contracts may not fully compensate the employees could a#ect the Group’s ability to conduct its oper- Group for cost variations .”). In addition, a shortage of quali1ed ations and complete its contractual obligations, which could employees may require the Group to enhance its wage and a#ect revenues and pro1ts earned under contracts, and result bene1ts packages to compete more e#ectively for employees. in delays that could result in the Group incurring penalties. An increase in wage rates would reduce the Group’s pro1tabil- e terms and conditions of existing or renegotiated agree- ity, which could have a material adverse e#ect on its business, ments could also increase the Group’s costs or otherwise a#ect 1nancial condition and results of operations. its ability to fully implement future operational changes to enhance its e8ciency and performance. is could have a The Group is heavily dependent on the availability of bus material adverse e#ect on the Group’s business, 1nancial drivers and shortages may increase operating costs or condition and results of operations. result in penalties for reduced services. e Group is heavily dependent on the availability of bus Legal and tax risks drivers in the countries in which it operates. ere are several The Group is subject to various complex regulations and reasons why the Group might su#er a temporary or long-term any violations of or changes in such regulations could shortage of bus drivers, including competition within the disrupt the Group’s business. transport sector for trained drivers, a decrease in the number e jurisdictions in which the Group operates impose a num- of people choosing to pursue bus driving as a career, strikes ber of complex, demanding and evolving legal, administrative by bus drivers, changes in unionisation or failure to meet and regulatory requirements relating to, among other matters, increased demand in the number of bus drivers needed for criminal and civil laws, public procurement, tax laws, plan- bus services. is is particularly true in Norway, where the ning, developing, building, land use, 1re, health and safety, number of individuals willing to become quali1ed drivers has environment, competition and employment. Pursuant to typically been limited. During periods of driver shortages, the these regulations, the Group is required to obtain certain Group may be forced to pay extra overtime compensation. operating permits, including transport permits. e Group e Group may also have to increase salaries or bene1ts to incurs capital and operating expenditures and other costs in attract additional drivers. In addition, the Group may be the ordinary course of business in complying with applicable forced to reduce its supply of services due to driver shortages, laws and regulations. Violations of, or changes in, relevant in which case the Group could be subject to penalties and law, regulations or policies, or the interpretation thereof, or 1nes by the relevant PTA pursuant to the terms of the Group’s delays in such interpretations being delivered, may delay or contracts. If the Group is unable to provide bus services as a increase the cost of ongoing contracts or subject the Group to result of a shortage of bus drivers, this could have a material 1nes, damages, prohibition on operations and other penalties adverse e#ect on its business, 1nancial condition and results which could have a material adverse e#ect on the Group’s of operations. Furthermore, the Group’s reputation as a bus business, 1nancial position and results of operations. In par- operator could be harmed if it is unable to ful1l its contractual ticular, the Group’s work with public authorities subjects it to obligations due to driver shortages, which could hinder the various anti-bribery and anti-corruption laws. If a person dis- Group’s ability to win new contracts with PTAs. charging certain managerial responsibilities in the Group was found to have committed certain crimes such as bribery or

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 19 RISK FACTORS

corruption, the Group might be prohibited from taking part have a material adverse e#ect on the Group’s business, 1nan- in tender processes in one or several countries. Each aspect of cial condition and results of operations. the legal, administrative and regulatory environment in which the Group operates is subject to change, which could have a The Group is subject to various environmental laws and material adverse e#ect on the Group’s business, 1nancial con- regulations and may be liable in relation to environmental dition and results of operations. damage. e Group is subject to extensive and constantly evolving The Group will be operating in the uncertain environment international and local environmental laws and regulations in of a new EU public procurement regime. the jurisdictions in which it operates, including laws and regu- e Group’s operations are subject to both national and lations governing air emissions, waste water discharge, the EU laws and regulations. On +( February +)%&, Directive storage, handling and transportation of chemicals and hazard- +)%&/+&/EU on public procurement and Directive +)%&/+$/EU ous substances and the remediation of environmental damage. for procurement awarded to companies operating in the sec- Compliance with environmental regulation is an on-going tors of transport, water, energy and postal services (the “ Utili- process and, as such, new legislation and regulations, the ties Directive ”) were adopted. e Utilities Directive is main- imposition of more stringent requirements, or more rigorous ly aimed at modernising and simplifying the existing rules on enforcement thereof, may require the Group to modify its public contracts and codifying the latest case law from the operations, incur unbudgeted costs in order to comply, or Court of Justice of the European Union. e changes include incur 1nes or penalties for environmental violations. ere is a enhanced rights for small- and medium-sized companies, risk that any such expenditure will have a material adverse more emphasis on quality and societal goals in assessing bids e#ect on the Group’s business, 1nancial condition and results rather than solely cost, and the ability to exclude bidders for of operations. persistent poor past performance. EU Member States must To that end, the Group’s depots are often provided by the implement the relevant provisions by %* April +)%(. In Sweden, PTA as part of the tender package, although the Group cur- new legislative provisions have been proposed to amend the rently leases some of its depots and other facilities from third current public procurement and public transport legislation. parties. To the extent that it is responsible for environmental In Denmark, a new public procurement bill implementing damage to these facilities, the Group will be responsible for Directive +)%&/+&/EU has been proposed and is currently repairing this damage, and is generally insured against such within the parliamentary approval process and expected to risks. However, if environmental damage is discovered during be implemented in late +)%$. e Utilities Directive will be the time that the Group operates these facilities, it may be implemented separately in late +)%$ or early +)%(. Although di8cult or impossible to establish whether the damage was not an EU member state, Norway, as a member state of the caused by the Group or by a previous operator of the property. EEA, adopts the EU public procurement rules and is currently As a result, the Group may be jointly and severally liable for consulting on amendments to its Public Procurement Act in the costs associated with environmental damage caused by order to implement the Utilities Directive. Norway is also previous operators. Any expenses relating to repair of the implementing a reform which aims to simplify the national Group’s facilities and environmental clean-up could have a procurement rules. Norway aims to implement the relevant material adverse e#ect on the Group’s business, 1nancial con- provisions by %* April +)%(. Finland is also currently under- dition and results of operations. taking a comprehensive reform of its public procurement legislation in line with the Utilities Directive, which is expect- The Group may from time to time be involved in litigation ed to be completed by autumn +)%$ at the earliest. and disputes. e interpretation and long-term impact of the Utilities In the ordinary course of the Group’s business, the Company Directive and the form and content of the implementing legis- and its subsidiaries are from time to time involved in disputes lation in individual countries has not yet been established. e with PTAs and other parties, such as disputes over contract implementation of new legislation involves certain risks. e interpretation, tender awards, personal injury and employ- new developments are likely to create a period of uncertainty ment matters, some of which result in litigation. It is common as both PTAs and bidders adapt to a new procurement land- in the industry to be involved in legal disputes in terms of scape and there is a risk that the legislation will be interpreted public procurement processes that are challenged either by the or applied inconsistently by enforcement bodies. Compliance Group or its competitors (see further “ —Public tender processes with the new laws may impose additional costs, requirements are subject to third party challenge and may be reversed ”). Dis- or restrictions on the Group’s operations, for example stricter putes of this kind may be time consuming and involve consid- technical or environmental requirements for buses or more erable costs. Such disputes could have a material adverse e#ect rigorous corporate governance policies, and the Group may on the Group’s business, 1nancial condition and results of lose some of the bene1ts and e8ciencies that it has derived operations. Litigation proceedings could result in the Group during its ten years of experience under the previous public being subject to penalties or damages, the payment of which procurement regime. Any extended period of uncertainty, could have a material adverse e#ect on the Group’s business, additional compliance related costs or other impact on the 1nancial condition and results of operations. Group’s ability to secure new public-sector contracts could

20 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) RISK FACTORS

Public tender processes are subject to third party introduced at a rate of +$5 of a company’s entire taxable pro1t. challenge and may be reversed. Further, the proposal seeks to introduce a one-o# $)5 reduc- Awards under public tender processes may be subject to tion of any tax losses carried forward that remain at the time challenge or rescission based on actual or alleged procedural the new model would come into e#ect. e proposals are with de1ciencies in the tender process, even after the Group has the Swedish government for review and it is not currently pos- made signi1cant expenditures associated with winning such a sible to predict whether, or to what extent, they will be imple- tender. e EU Remedies Directive +))-/((/EC (the “ Reme- mented. It cannot be excluded that future changes to tax laws dies Directive ”) provides for the cancellation of public sector may lead to increased costs for Nobina and have a material and utilities contracts awarded in breach of EU public pro- adverse e#ect on the Group’s business, 1nancial condition and curement rules. Although the time period for the commence- results of operations. ment of proceedings is limited by the Remedies Directive as well as by national public procurement legislation, there is a A loss of a tax dispute or a successful tax challenge to the risk that the Group will face action seeking to challenge ten- Group’s operating structure or to the Group’s tax payments der awards won by the Group. If the Group failed to success- could result in a higher tax rate on the Group’s earnings. fully secure a contract in any re-tendering process, this could The Group is also subject to possible retroactive have a material adverse e#ect on the Group’s business, 1nan- adjustments to its previously assessed taxation. cial condition and results of operations. e Group is exposed to potential tax risks resulting from the varying applications and interpretations of tax laws, treaties, The Group’s effective tax rate may vary due to numerous regulations and guidance, including in relation to corporate factors including changes in tax laws in any of the income tax and VAT. From time to time, the Group’s tax pay- jurisdictions in which the Group operates. ments may be subject to review or investigation by tax authori- Nobina’s e#ective tax rate is derived from a combination of ties of the jurisdictions in which the Group operates. If any the applicable tax rates in the jurisdictions in which it oper- tax authority successfully challenges the Group’s operational ates: Sweden, Norway, Finland and Denmark. e Group’s structure, intercompany pricing policies, the taxable presence e#ective tax rate is subject to 7uctuation from one period to of its subsidiaries in certain countries, or if the Group loses a the next because the income tax rates for each year are a func- material tax dispute in any country, or any tax challenge of the tion of many factors, including: (i) taxable income levels and Group’s tax payments is successful, its e#ective tax rate on its the e#ects of a mix of pro1ts /(losses) earned by the Company earnings could increase substantially and the Group’s earnings and its subsidiaries in numerous tax jurisdictions with a broad and cash 7ows from operations could be materially adversely range of income tax rates; (ii) the ability to utilise deferred tax a#ected. ere are, for instance, transactions taking place assets; (iii) taxes, refunds, eventual interest or penalties result- between the companies in the Group and related companies, ing from tax audits; (iv) the magnitude of various credits and which must be carried out in accordance with arm’s length deductions as a percentage of total taxable income; and (v) principles in order to avoid adverse tax consequences. ere changes in tax laws or the interpretation of such tax laws in can be no assurances that the tax authorities will conclude any of the jurisdictions in which the Group operates. In par- that the Group’s transfer pricing policy calculates correct ticular, any reassessment, cancellation or restriction on the arm’s length prices for intercompany transactions, which amount of the Company’s historical tax losses carried forward could lead to an adjustment of the agreed price, which would that can be used could have a signi1cant impact on the Group’s in turn lead to increased tax cost for the Group. Some of the tax burden and a#ect the Company’s ability to pay dividends Group’s employees have acquired Shares at a time when there in accordance with its dividend policy. As of +* February +)%$, was no public market for the Shares. In the event the tax the Group had tax losses carried forward of SEK +,)0% million. authorities would deem the purchase price as lower than the On a consolidated level, tax losses carried forward (based on fair market value for such investments, there is a risk that the management’s assessment of the amount of taxable pro1ts that Group becomes liable for paying payroll tax based on the dif- will be available over the next few years against which losses ference between the tax authorities’ view of the fair market can be utilised), of SEK -0 million were recognised as deferred value and the purchase price at the time of investment. tax assets, while tax losses carried forward of SEK 0-& million In addition, the Group is subject to possible retroactive were not recognised as tax assets. On %+ June +)%&, the Swedish adjustments to its previously assessed taxation. A challenge to Corporate Taxation Committee ( Sw. Företagsskattekommittén ) the Group’s tax position by the relevant authorities could lead delivered a proposal to the Swedish government for a new to payment by the Group of additional taxes, reassessments corporate taxation model in Sweden. One feature of the sug- and, potentially, 1nes, which could be signi1cant. is could gested model is that deductions for net 1nancial costs, such as have a material adverse e#ect on the Group’s business, 1nan- interest expenses and other 1nancial costs, should be discon- cial condition and results of operations. tinued. It is also proposed that a standard deduction should be

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 21 RISK FACTORS

Financial risks directly from its vehicle manufacturers. ere is a risk that Nobina Europe may be unable to repay its outstanding such manufacturers may seek to impose less favourable lease bonds and may therefore continue to be subject to certain terms on transport operators, due to a perceived state of reli- restrictions and risks including regarding the payment of ance on manufacturer-sourced lease 1nancing. Although the dividends. Group has the alternative option to obtain lease 1nancing Nobina Europe has issued SEK-denominated senior secured from 1nancial institutions in order to take advantage of more 1xed rate bonds in an aggregate principal amount of SEK $$) favourable terms, there is a risk that no alternative option is million (the “ Bonds ”), within a framework amount of SEK available. Financial institutions providing credit facilities may (() million. e maturity date of the Bonds is %0 May +)%'. cease providing such arrangements or may require guarantors Shortly after completion of the O#er, Nobina intends to to guarantee the due performance of the Group’s obligations use SEK (0* million of the net proceeds from the O#er to under those arrangements. e Group may not be able to repay the Bonds in full by exercising Nobina Europe’s right in obtain or provide such guarantees at all, or on commercially the terms and conditions to redeem the Bonds early. If, how- reasonable terms. If the Group is unable to secure new 1nanc- ever, circumstances would arise that would result in Nobina ing, it will not be able to tender for new contracts, as it does Europe being unable to redeem the Bonds in full, for whatever not submit bids to PTAs until 1nancing for the necessary reason, Nobina Europe and its subsidiaries will continue to be buses is secured. is, in turn, may have a material adverse subject to certain covenants and restrictions of the terms and e#ect on the Group’s business, 1nancial condition and results conditions of the Bonds, which include restrictions in relation of operations. to the incurrence of new indebtedness, granting of new guar- antees and security, disposal of assets and subsidiary compa- Exchange rate fluctuations may adversely affect the nies, payment of dividends, repurchase of own shares, Group’s results of operations, financial position and future redemption of share capital or any other similar distribution prospects. or transfer of value to Nobina or its direct and indirect share- Several of the Group’s operating subsidiaries, including holders or any a8liate thereof. If the Bonds are not redeemed Nobina Norway, Nobina Finland and Nobina Denmark, pre- in full, such covenants and restrictions could have a material pare their 1nancial statements in currencies other than SEK adverse e#ect on Nobinas’s business, 1nancial condition and (the Group’s reporting currency). When preparing the Group’s results and, in particular, would constrain Nobina’s ability to consolidated 1nancial statements, the Group translates the pay future dividends in accordance with its dividend policy. balance sheets of its operating subsidiaries into SEK at each balance sheet date, and the Group translates the income state- The Group may be unable to obtain financing on favourable ments of its operating subsidiaries into SEK in accordance terms, or at all. with the average exchange rate during the relevant 1nancial Upon repayment of the Bonds, the Group may be required to period. Consequently, the Group’s results of operations and put in place alternative 1nancing. e Group may also be 1nancial condition are a#ected by 7uctuations in the rate of required to raise additional 1nancing or re1nance parts of, or exchange between the SEK and the NOK, EUR and the all of, its outstanding debt in the future. e Group’s ability to DKK. e Group is also exposed to currency 7uctuations in obtain necessary 1nancing on reasonable terms depends on a relation to its fuel costs. Fuel is generally denominated in number of factors, including the prevailing conditions of the USD and the Group typically purchases fuel in USD, while capital and credit markets, interest rates, the Group’s credit- the Group’s revenue is denominated in SEK, NOK, EUR and worthiness and credit rating, and its capacity to assume more DKK. Exchange rate 7uctuations may have a material adverse debt at such time. As a result, there is a risk that the Group e#ect on the Group’s business, 1nancial condition and results may be unable to secure 1nance on reasonable terms, or at all, of operations. at any particular time, and the Group’s inability to do so could have a material adverse e#ect on its business, 1nancial condi- Interest rate fluctuations may adversely affect the Group’s tion and results of operations. cash flow and financial condition. e pricing of the Group’s bus leases is dependent on interest The Group may be unable to secure lease financing to rate 7uctuations and the Group is therefore exposed to interest acquire new buses on favourable terms, or at all. rate 7uctuations. USD interest rates indirectly a#ect global e Group operates in a capital intensive industry that fuel prices, and therefore impact the price of one of the requires a substantial amount of capital expenditure and other Group’s principal operating expenses. e interest rate 7uctu- long-term committed expenditures, including those relating ations are only partially o#set by compensation from revenue to the leasing of buses. e Group uses leases to acquire new indexation. Accordingly, 7uctuations in interest rates could buses for the purpose of maintaining its existing 7eet and ser- have a material adverse e#ect on the Group’s business, results vicing new transport contracts that entail additional routes of operations, 1nancial position and future prospects. and di#erent vehicle speci1cations. Largely due to the global 1nancial crisis and current market conditions, bus leases have The Group may be required to write down goodwill included become more scarce and expensive than in the past and there in its balance sheet. is no guarantee that the Group will be able to meet its 1nanc- In FY%%/%+, the Group decreased the goodwill on its consoli- ing needs in a timely manner, on commercially reasonable dated balance sheet following an impairment of goodwill for terms, or at all. e Group typically obtains lease 1nancing Nobina Norway at an amount of SEK *& million. As at +*

22 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) RISK FACTORS

February +)%$, the Group’s goodwill on its consolidated bal- ments will be available for sale in the public market or other- ance sheet was SEK $** million. e Group may be required wise. Sales of substantial amounts of Shares in the public to make additional write-downs of its goodwill. Such write- market following the O#er, or the perception that such sales downs, if signi1cant, could have a material adverse e#ect on could occur, could adversely a#ect the market price of the the Group’s business, 1nancial condition and results of opera- Shares and may make it more di8cult for holders to sell their tions. Shares at a time and price that they deem appropriate. e Selling Shareholders may have interests that are di#erent from RISKS RELATING TO THE OFFER AND THE SHARES the Company’s other shareholders regarding the timing or An active, liquid and orderly trading market for the Shares amounts of Shares that may be sold. After the lock-up may not develop, the price of the Shares may be volatile, arrangements expire, or if they are waived or terminated by and potential investors could lose a portion or all of their the Joint Bookrunners, no assurances can be given as to investment. whether future sales of Shares will be made or as to the timing Prior to the O#er, there has been no public market for the or amounts of Shares that may be sold. Company’s Shares. ere is a risk that an active and liquid market will not develop or, if developed, that it will be sus- The Group’s ability to pay dividends in the future may be tained after completion of the O#er. e price of the O#er constrained and depends on several factors. will be determined through a book-building procedure and, e Company’s dividend policy is subject to the Group’s per- consequently, based on demand and the overall market condi- formance and 1nancial condition, future earnings, cash 7ows, tions. ere can be no assurances that the price of the O#er terms of indebtedness, capital expenditures and other factors. will re7ect the price at which investors in the market will be In addition, Swedish law limits the Group’s ability to propose willing to buy and sell the Shares following the O#er. Inves- and declare dividends to certain funds legally available for tors may not be in a position to sell their Shares quickly, or at that purpose. ere can be no certainty that a dividend will be the market price, if there is no active trading in the Shares. proposed or declared in any given year. After the O#er, the price of the Shares may be subject to e Company is the Group’s parent company. As a holding considerable 7uctuation. In particular, the price of the Shares company, its principal assets consist of direct or indirect share- may be a#ected by supply and demand for the Shares, 7uctua- holdings and loans due from its subsidiary operating compa- tions in actual or projected results, changes in earnings fore- nies which generate the Group’s cash 7ow. As a result, the casts, failure to meet stock analysts’ earnings expectations, Company’s revenue essentially comes from intra-group inter- changes in general economic conditions, changes in regulato- est and loan repayments by subsidiaries and possible contribu- ry conditions and other factors. Moreover, the general volatili- tions and dividends from subsidiaries. e ability of the Com- ty of share prices may create pressure on the Share price even pany’s subsidiaries to make these payments to the Company if there is no reason for this in the Group’s operations or earn- may be at risk depending on the changes in their activities. ings potential. Group contributions, dividend distributions or other 1nancial 7ows may also be limited due to various undertakings such as Future offerings of securities may adversely affect the credit agreements entered into by such subsidiaries, tax con- market price of the Shares and lead to substantial dilution straints making 1nancial transfers more di8cult or expensive, of existing shareholders. as well as the existence of su8cient distributable reserves and In the future, Nobina may seek to raise capital through o#er- cash in the Group’s subsidiaries. e Group’s ability to pay ings of additional equity or other securities. An issuance of dividends in accordance with its dividend policy therefore such additional securities could result in a reduction in the strongly depends on the dividend distributions it receives from market price of the Shares and could dilute the economic and its subsidiaries. To that end, if circumstances would arise that voting rights of existing shareholders if made without grant- would result in Nobina Europe being unable repay the Bonds, ing subscription rights to existing shareholders. Although the Nobina Europe and its subsidiaries will continue to be subject timing and nature of any future o#ering will depend on mar- to certain restrictions, including on their ability to pay divi- ket conditions at the time of such an o#ering, the Company dends. Such restrictions could have a material adverse e#ect cannot predict or estimate the amount, timing or nature of on the Group’s business and 1nancial condition and, in par- any future o#erings. Accordingly, holders of Shares bear the ticular, would constrain the Group’s ability to pay future risk of any future o#erings causing a reduction in the market dividends. price of the Shares and/or diluting their shareholdings in the Company. Shareholders in the United States or other countries outside Sweden may not be able to exercise pre-emption Future sales of Shares after the Offer may affect the market rights to participate in rights offers or buy-back offers. price of the Shares. Under Swedish law, existing shareholders will have pre-emp- In connection with the O#er, the Selling Shareholders and the tion rights in respect of certain issues of shares, unless those members of the Board of Directors and Group Management rights are disapplied by a resolution of the shareholders at a of the Company have agreed to a lock-up arrangement with general meeting or the shares are issued on the basis of an the Joint Bookrunners. When these lock-up arrangements authorisation to the board of directors under which it may dis- expire, or if they are waived or terminated by the Joint Book- apply the pre-emption rights. Securities laws of certain juris- runners, the Shares that are subject to the lock-up arrange- dictions may restrict the Group’s ability to allow participation

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 23 RISK FACTORS

by shareholders in such jurisdictions in any future issue of the shares carried out on a pre-emptive basis in a rights o#er. Shareholders in the United States, as well as certain other countries, may not be able to exercise their pre-emptive rights to participate in a rights o#er or a buy-back o#er, including in connection with an o#er below market value, unless the Group decides to comply with local requirements and, in the case of the United States, unless a registration statement under the U.S. Securities Act is e#ective with respect to such rights or an exemption from the registration requirements is availa- ble. In such cases, shareholders resident in such non-Swedish jurisdictions may experience a dilution of their holding of the Company’s Shares, possibly without such dilution being o#set by any compensation received in exchange for subscription rights. Local requirements may not be complied with and a registration statement may not be 1led in the United States so as to enable the exercise of such holders’ pre-emption rights or participation in any rights o#er or buy-back o#er.

24 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FORWARD-LOOKING STATEMENTS AND PRESENTATION OF FINANCIAL AND OTHER INFORMATION

FORWARD-LOOKING STATEMENTS AND PRESENTATION OF FINANCIAL AND OTHER INFORMATION

FORWARD-LOOKING STATEMENTS t any negative impact on the reputation of and value associ- is Prospectus contains various forward-looking statements ated with Nobina’s brand or the public transport industry that re7ect management’s current views with respect to future as a whole; events and anticipated 1nancial and operational performance. t the loss of existing contracts or Nobina’s inability to win Forward-looking statements as a general matter are all state- new contracts on favourable terms; ments other than statements as to historical facts or present t the loss or suspension of any of our operating permits from facts or circumstances. e words “believe”, “expect”, “antici- authorities for passenger transport services; pate”, “intend”, “may”, “plan”, “estimate”, “will”, “should”, t Nobina’s ability to accurately assess costs and risks under “could”, “aim” or “might”, or, in each case, their negative, or new contracts and/or the negative impact of cost in7ation similar expressions, identify certain of these forward-looking with respect to labour, fuel and other costs; statements. Other forward-looking statements can be identi- t changes in contract requirements of Nobina’s PTA custom- 1ed in the context in which the statements are made. Forward- ers; looking statements appear in a number of places in this Pro- t competitive pressure and changes in the competitive envi- spectus, including, without limitation, in the sections entitled ronment; “Summary ”, “ Risk factors ”, “ Market overview ” and “ Business t changes in the regulatory and/or political environments in description ”, “ Operational and #nancial review ” and “ Share which Nobina operates; capital and ownership structure—Dividends—Dividend policy ”, t any legal or illegal strikes, regulated work stoppages or and include statements relating to: other adverse industrial action; t the impact of an economic downturn; Nobina’s strategy, outlook and growth prospects, including t t Nobina’s ability to retain or replace key personnel; on a geographic segment basis; t losses, including from potential lawsuits, or damage to the t Nobina’s operational and 1nancial targets and dividend Company’s buses or other equipment for which Nobina’s policy; insurance coverage and/or 1nancial reserves prove to be t the revenue expected to be generated by Nobina’s secured insu8cient; and contracts; t 1nancial risks, including interest rate changes, and Nobina’s t the number of buses to be announced in future tender pro- ability to secure 1nancing of new buses at acceptable costs. cesses; t Nobina’s planned bus investments and other investments; Additional factors that could cause the Company’s actual t the expectations as to future growth in demand for public results, performance or achievements to di#er materially bus transport services; include, but are not limited to, those discussed under “ Risk the impact of regulations on Nobina and its operations; t Factors ”. t general economic trends and trends in Nobina’s industries ese forward-looking statements speak only as of the date and markets; and of this Prospectus. e Company expressly undertakes no t the competitive environment in which Nobina operates. obligation to publicly update or revise any forward-looking Although the Company believes that the expectations re7ect- statements, whether as a result of new information, future ed in these forward-looking statements are reasonable, it can events or otherwise, other than as required by law or regula- give no assurances that they will materialise or prove to be tion. Accordingly, prospective investors are cautioned not to correct. Because these statements are based on assumptions or place undue reliance on any of the forward-looking statements estimates and are subject to risks and uncertainties, the actual herein. results or outcome could di#er materially from those set out in the forward-looking statements as a result of many factors, including:

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 25 FORWARD-LOOKING STATEMENTS AND PRESENTATION OF FINANCIAL AND OTHER INFORMATION

PRESENTATION OF FINANCIAL AND OTHER e Company has presented these non-IFRS measures in INFORMATION this Prospectus because it considers them to be important is Prospectus contains the Company’s audited consolidated supplemental measures of the Company’s performance and 1nancial statements as of and for the years ended +* February believes that they are widely used by investors when comparing +)%$ (“ FY"#/"$ ”), +* February +)%& (“ FY"%/"# ”) and +* Febru- performance between companies. Since not all companies ary +)%0 (“ FY"&/"% ”), which have been prepared in accordance compute these or other non-IFRS 1nancial measures in the with IFRS as adopted by the EU (“ IFRS ”). e FY%&/%$ 1nan- same way, the manner in which the Company has chosen to cial statements have been audited by PwC, as set forth in compute the non-IFRS 1nancial measures presented herein their audit report included elsewhere herein. e FY%0/%& and may not be comparable with similarly de1ned terms used by FY%+/%0 1nancial statements have been audited by EY, the other companies. Company’s previous auditor, as set forth in their audit report included elsewhere herein (see further “ Financial Statements ”). Adjustments e Company presents its 1nancial statements in SEK. Certain 1nancial and other information that is presented in For additional currency and exchange rate information, see the Prospectus has been rounded o# in order to make the “—Currency ” and “ Operational and #nancial review ”. information more accessible to the reader. Consequently, in certain columns, the numbers do not exactly correspond to Non-IFRS financial measures the total stated amount. e following 1nancial measures included in this Prospectus are not measures of 1nancial performance or liquidity under Currency IFRS: In this Prospectus, all references to: (i) “ SEK ” are to the lawful currency of the Kingdom of Sweden; (ii) “ NOK ” are to the t EBITDA, which means pro1t/loss for the year before net lawful currency of Norway; (iii) “ DKK ” are to the lawful 1nancial items, tax, depreciation/amortisation and impair- currency of Denmark; (iv) “ EUR ” are to euro, the single cur- ment of PPE and intangible assets and capital losses from rency of the EU Member States participating in the European the disposal of non-current assets; Monetary Union having adopted the euro as its lawful curren- t EBITDAR, which means pro1t/loss for the year before net cy; and (v) “ USD ” are to United States Dollars, the lawful 1nancial items, tax, depreciation/amortisation and impair- currency of the United States. ment of PPE and intangible assets, capital losses from the disposal of non-current assets and operating lease costs; Trademarks t EBITDA margin, which means EBIDTA in relation to net e Company owns or has rights to certain trademarks, trade sales; names or service marks that it uses in connection with the t EBITDAR margin, which means EBIDTAR in relation to operation of its business. e Company asserts, to the fullest net sales; and extent under applicable law, its rights to the Company’s trade- t Equity free cash 7ow, which means cash 7ow for the year marks, trade names and service marks. before certain cash 7ow items from 1nancing activities, Each trademark, trade name or service mark of any other certain cash 7ow items from operating activities and 1nan- company appearing in this Prospectus belongs to its holder. cial expense (from the income statement), all of which Solely for convenience, the trademarks, trade names and relate to the Company’s bond or incentive programme. copyrights referred to in this Prospectus are listed without the ™, ® and © symbols. For a reconciliation of pro1t/loss for the periods presented to EBITDA, EBITDAR, and of cash 7ow for the periods pre- sented to equity free cash 7ow, EBITDA and EBITDAR, see “Selected consolidated historical #nancial and other informa- tion—Selected key performance indicators .” e non-IFRS 1nancial measures presented herein are not recognised measures of 1nancial performance under IFRS, but measures used by management to monitor the underlying performance of the Company’s business and operations. In particular, the non-IFRS 1nancial measures should not be viewed as substitutes for total revenue, other income, operat- ing pro1t/loss, pro1t/(loss) for the period, cash 7ows from operating activities at period end or other income statement or cash 7ow items computed in accordance with IFRS. e non- IFRS 1nancial measures do not necessarily indicate whether cash 7ow will be su8cient or available to meet the Company’s cash requirements and may not be indicative of the Company’s historical operating results, nor are such measures meant to be predictive of the Company’s future results.

26 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) THE OFFERING

THE OFFERING

Nobina and the Selling Shareholders have resolved to diversify the ownership of Shares in the Company and Nobina’s Board of Directors has therefore applied for listing of the Company’s Shares %) on Nasdaq Stockholm. e O#er comprises between $%,%&',()( and (%,*+%,$*+ Shares. e Company is o#ering such number of new Shares, not to exceed +$,-$-,$-(, as will raise gross proceeds of SEK *$) million. e Selling Shareholders are o#ering between +',*'',()( and 0(,)(&,))( existing Shares. Furthermore, Sothic Capital, Anchorage and Invesco have granted an option to the Joint Global Coordinators, on behalf of the Joint Bookrunners, to pur- chase up to -,&%*,$') additional Shares in the Company, corresponding to approximately %+5 of the maximum number of Shares that may be o#ered in the O#er, to cover any potential over-allotment (if any) or other short positions in connection with the O#er (the “ Over-allotment Option ”). e Over-allotment Option may be exercised wholly or partly during 0) days from the 1rst day of trading of the Company’s Shares on Nasdaq Stockholm. See “ Share capital and ownership structure—Ownership structure prior to and following the O&er ”. e price of the O#er will be determined through a book-building procedure and therefore based on demand and overall market conditions. e 1nal price per Share in the O#er is expected to be set within the O#er Price Range of SEK 00–&) by the Company and Selling Shareholders in consultation with Joint Bookrun- ners. e 1nal price of the O#er is expected to be made public through a press release on or around %* June +)%$. Nobina’s Board of Directors intends, pursuant to the authorisation from the annual general meeting on +- May +)%$ and assuming a price at the mid-point of the O#er Price Range, to resolve to increase the share capital of the Company by a maximum of SEK *0,*0$,(%(, by way of a new issue of +0,+*-,(-% Shares. e new issue is expected to raise proceeds of approximately SEK *$) million before transaction costs. e right to sub- scribe for new Shares shall, on a non-pre-emptive basis, be vested in the public in Sweden and in institutional investors in Sweden and abroad. Upon full subscription of +$,-$-,$-( new Shares, the number of Shares and votes in the Company will increase by +$,-$-,$-( up to a total of *',%%0,+$*, corresponding to a dilution of approximately +'5 of the share capital and votes in the Company. e Company’s transaction costs attributable to the O#er are expected to be SEK -( million, including commission and fees to the Joint Bookrunners and other advisers. e Company will not receive any proceeds from the sale of Shares by the Selling Shareholders. If the Over-allotment Option is not exercised, the O#er will comprise between $%,%&',()( and (%,*+%,$*+ Shares, corresponding to between $'5 and -%5 of the total number of Shares and votes in the Company. If the Over-allotment Option is exercised in full, the O#er will comprise between $-,+*-,$$' and (',+&),%-+ Shares, corresponding to between ((5 and *)5 of the total number of Shares and votes in the Company. e total value of the O#er will amount to at least SEK %,(** million and a maximum of approximately SEK +,--) mil- lion, depending on the 1nal price of the O#er and the extent to which the Over-allotment Option is exercised.

Stockholm on 0 June +)%$

Nobina AB (publ) Board of Directors

%) e annual general meeting held on +- May +)%$ resolved upon a %:%) Reverse Share Split, i.e. ten (%)) Shares will be exchanged into one (%) Share whereby the quota value of the Shares increases from SEK ).0( to SEK 0.() and the number of Shares decreases from (00,$$(,*+0 to (0,0$$,(*+. As at the date of this Prospectus, the Reverse Share Split has not yet been registered with Euroclear, but registration is expected to occur on or around * June +)%$.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 27 BACKGROUND AND REASONS

BACKGROUND AND REASONS

Nobina is the largest and most experienced public bus transport operator in the Nordic region. e Company’s expertise in prospecting, tendering and active management of public bus transport contracts in combination with long-term delivery quality makes Nobina an industry leader in terms of pro1tability, development and initiatives that promote a healthier industry. Every day, Nobina ensures that more than one million people arrive at work, school or other activities by delivering contracted public bus transport in Sweden, Norway, Finland and Denmark. In addition, Nobina o#ers express bus services under the Swebus brand in the Swedish market. Nobina’s success creates a better society in the form of increased mobility, reduced environmental impact and lower cost to society. e overriding 1nancial objectives of the Company’s operations are to generate stable and pro1table growth. Nobina has its origin in the 1rst bus transport business founded by the Swedish national rail operator, SJ Buss (“ SJ ”), more than %)) years ago. Since then the Company has developed into a dedicated public bus trans- port operator covering the entire Nordic region. Under the current management team, Nobina has developed a favourable and established market leading position through extensive experience and scale, continuous e8cien- cy optimisation initiatives and active contract management. As at the date of this Prospectus, Nobina’s ownership structure includes the Selling Shareholders, who together hold approximately '-5 of the Company’s Shares before the O#er. e remaining Shares are owned by persons including overseas funds and private individuals, including current employees and members of the Board of Directors and Group Management of the Company, who together hold approximately 05 of the Company’s Shares, prior to completion of the O#er %) . Nobina’s Board of Directors believes that listing the Company’s Shares on Nasdaq Stockholm is an impor- tant step in Nobina’s development, as it will further increase awareness of the Company’s business and activi- ties, strengthen Nobina’s pro1le and brand with investors, clients, business partners and passengers as well as increase the ability to attract and retain quali1ed employees and key management. e listing will broaden the Company’s shareholder base and enable access to capital through the Swedish and international capital mar- kets. Furthermore, it will facilitate a partial realisation of the Selling Shareholders’ holdings in line with their business model and provide a liquid market for their retained Shares going forward. Transparency and under- standing of the Nordic public bus transport market in general, and of Nobina in particular, is also expected to be enhanced by the listing. For these reasons, the Board of Directors has applied for listing on Nasdaq Stockholm. e Company expects to receive net proceeds from the O#er of approximately SEK --& million, after deducting transaction costs payable by Nobina of approximately SEK -( million, in aggregate. Nobina will use the net proceeds to wholly redeem the Bonds prematurely, which will result in a payout from the Company of a total of SEK (0* million. e Company will thereby reduce its debt by SEK $$) million as well as decrease its 1nancial expenses. e remaining net proceeds from the O#er will be used to cover the costs of the manage- ment incentive programme. +) e Company will not receive any proceeds from the sale of existing Shares that are o#ered by the Selling Shareholders.

In other respects, reference is made to the full particulars in the Prospectus, which has been prepared by the Board of Directors on account of the application for listing of the Company’s shares on Nasdaq Stockholm and the O&er made in connection therewith. "e Board of Directors is responsible for the content of this Prospectus. To the best of the knowledge of the Directors, having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is in accordance with the facts and contains no omission likely to a&ect its import.

Stockholm on 0 June +)%$

Nobina AB (publ) Board of Directors

%) For more information on the ownership of the Company prior to the O#er, see “ Share capital and ownership structure ”. +) For further information on the Company’s management incentive programme, see “ Corporate Governance—Compensation for members of the Board of Directors and Group Management—Incentive programme ”. For an overview of the Company’s capitalisation and indebtedness, assuming that the net proceeds from the O#er were available to the Company and adjusted for the events described above, see “ Capitalisation, indebtedness and other #nancial information ”.

28 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) TERMS AND INSTRUCTIONS

TERMS AND INSTRUCTIONS

THE OFFER 1) investment interest from institutional investors. No bro kerage e O#er comprises between $%,%&',()( and (%,*+%,$*+ Shares. commission will be charged. e 1nal price of the O#er will e Company is o#ering such number of new Shares, not to be announced around %* June +)%$ through a press release. exceed +$,-$-,$-(, as will raise gross proceeds of SEK *$) mil- lion. e Selling Shareholders are o#ering between +',*'',()( APPLICATION and 0(,)(&,))( existing Shares. e O#er is divided into two The Offer to the general public parts: Applications for the acquisition of Shares within the terms of the O#er to the general public should be made during the t e O#er to the general public in Sweden +) period & to %( June +)%$ and relate to a minimum of 0)) t e O#er to institutional investors in Sweden and abroad 0) Shares and a maximum of +),))) Shares in even lots of %)) e outcome of the O#er will be published through a press Shares each. release around %* June +)%$. e application period for the general public in Sweden may be terminated prior to 0:)) p.m. CET but not earlier than Over-allotment Option %+:)% a.m. CET on %( June +)%$. In the event that the applica- Sothic Capital, Anchorage and Invesco have granted an Over- tion period ends before 0.)) p.m. on %( June +)%$ or the allotment Option to the Joint Global Coordinators on behalf application period in the O#er is shortened as described of the Joint Bookrunners, which may be exercised wholly or in “ —Application—"e institutional O&er ”, this will be partly during 0) days from the 1rst day of trading of the Com- announced by way of a press release, and the announcement pany’s Shares on Nasdaq Stockholm, to acquire an additional of the outcome of the O#er, the date of the 1rst day of trading, maximum of -,&%*,$') Shares from Sothic Capital, Anchorage as well as date for allotment and payment will be adjusted and Invesco, corresponding to no more than %+5 of the maxi- accordingly. mum number of Shares in the O#er to cover possible oversub- scription to the O#er. Application by internet Private individuals with a depository account with Danske ALLOTMENT OF SHARES Bank, who are connected to internet banking services, can e allotment of Shares for each part of the O#er will be apply for acquisition of Shares via Danske Bank’s website based on demand. e allotment will be determined by the (www.danskebank.se/prospekt). Private individuals who are Board and the Selling Shareholders in consultation with the customers of Danske Bank with a securities account, or per- Joint Global Coordinators. sons that are not customers of Danske Bank but customers of another Swedish bank, can apply for an acquisition of Shares BOOK-BUILDING PROCESS via Danske Bank’s website and be allocated Shares for a value To achieve market-based pricing of the Shares in the O#er, corresponding to a maximum of SEK %0),))). institutional investors will be a#orded the opportunity to Individuals who have an account with Avanza can apply participate in a form of book-building process by submitting for the purchase of Shares through Avanza’s online services. expressions of interest. e book-building process will take place during & to %( June +)%$. e price of the O#er for all Application by special application form Shares in the O#er will be determined through this process. Applications may also be made using the special application e book-building process for institutional investors may be form. Application forms are available on Nobina’s website terminated earlier than the date set out in this Prospectus. (www.nobina.com) as well as Danske Bank’s website Announcement of such possible early termination will be (www.danskebank.se/prospekt). e application must have made through a press release. been received by Danske Bank’s Payment & Asset Services o8ce by no later than 0:)) p.m. CET on %( June +)%$. OFFER PRICE Late applications, as well as incomplete or incorrectly com- e price in the O#er will be set within the O#er Price Range pleted application forms, may be discarded. No amendments of SEK 00–&) per Share. e O#er Price Range has been set or additions may be made to pre-printed text. Only one appli- by the Company and the Selling Shareholders, in consultation cation per person may be made. If multiple applications from with the Joint Global Coordinators based on the anticipated the same investor are made, Danske Bank reserves the right to

%) e annual general meeting held on +- May +)%$ resolved upon a %:%) Reverse Share Split, i.e. ten (%)) Shares will be exchanged into one (%) Share whereby the quota value of the Shares increases from SEK ).0( to SEK 0.() and the number of Shares decreases from (00,$$(,*+0 to (0,0$$,(*+. As at the date of this Prospectus, the Reverse Share Split has not yet been registered with Euroclear, but the description in this section as regards the number of Shares in the O#er and other related information assumes that the Reverse Share Split has been registered with Euroclear (which is expected to occur on or around * June +)%$). +) e O#er to the general public refers to the O#er of Shares to private individuals and legal entities who subscribe for a maximum of +),))) Shares. 0) e institutional O#er refers to private individuals and legal entities who subscribe for more than +),))) Shares.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 29 TERMS AND INSTRUCTIONS

only consider the 1rst application received. Note that the ALLOTMENT application is binding. Decision on the allotment of Shares is made by the Board and e application shall otherwise be made using the speci1c the Selling Shareholders, in consultation with the Joint Global application form and sent by post to: Coordinators, whereby the goal will be to achieve a strong Danske Bank A/S, Danmark, Sverige Filial institutional ownership base and a broad distribution of the Payment & Asset Services – Issues Shares among the general public, in order to facilitate regular Box -$+0 and liquid trading in Nobina’s Shares on Nasdaq Stockholm. SE-%)0 '+ Stockholm e allotment does not depend on when the application is submitted during the application period. Only one applica- Persons who are not customers of Danske Bank but customers tion per person will be considered. of another Swedish bank must send a valid copy of their per- sonal identi1cation, along with the application form, in order The Offer to the general public to be able to apply via Danske Bank and have the opportunity Allotment is not dependent on when, during an application to be allocated Shares corresponding to an amount over period, the application is made. In the event of oversubscrip- %0),))) SEK. tion, allotment may be made with a lower number of Shares than the application requests, at which allotment wholly or Application by telephone partly may take place by random selection. In addition, Customers of Danske Bank Private Banking may choose to employees of Nobina and customers of Danske Bank, may be apply by telephone with an asset manager or a private banker considered separately during allotment. at Danske Bank. Applications by phone are subject to the same terms as applications through the special application The institutional Offer form. Decision on the allotment of Shares within the O#er to insti- tutional investors in Sweden and abroad will, as mentioned Accounts/deposits with specific rules above, be made with the aim of achieving a strong institution- Applicants with accounts/deposits with speci1c rules on secu- al ownership base in Nobina. Allotment among institutions rities transactions, such as endowment insurance or an invest- that have submitted expressions of interest will be made on a ment savings account, must check with the bank or institution wholly discretionary basis. managing the account as to whether acquisition of Shares within the terms of the O#er is possible. Employees of Nobina and Joint Bookrunners Allotment to employees of Nobina may be made in respect of The institutional Offer no more than the number of Shares constituting a value of Institutional investors in Sweden and abroad are a#orded the SEK 0),))) per employee. opportunity to participate in a form of book-building process Allotment may also be made to employees of the Joint from & June to %- June +)%$. Applications from institutional Bookrunners, provided that such allotment is not made in investors in Sweden and abroad shall be submitted to Carnegie, priority to other allotments. In such case, the allotment takes Danske Bank or Pareto Securities (in accordance with certain place in accordance with the rules of the Swedish Securities instructions). Dealers Association and the SFSA’s regulations. e Company and the Selling Shareholders have retained the right to shorten, as well as extend, the application period INFORMATION REGARDING SETTLEMENT in the institutional O#er to investors in Sweden and abroad. The Offer to the general public Such changes of the application period are expected to be Allotment is expected to take place around %* June +)%$. announced by way of a press release no later than %- June +)%$. Shortly thereafter, a contract note will be sent to those that In the event that the application period is shortened or extend- have received an allotment in the O#er. ose who have not ed, this will be announced by way of a press release, whereby been allotted Shares will not be noti1ed. the announcement of the outcome of the O#er, the date of the Information on the allotment is also expected to be provid- 1rst day of trading, as well as date for allotment and payment ed from )'.)) a.m. CET on %* June +)%$ for applications will be adjusted accordingly. received by Danske Bank via telephone +&( ())-$+ &* %* &$. To receive information regarding allotment, the following Employees of Nobina information must be provided: name; personal identity num- Employees of Nobina who wish to acquire Shares must follow ber/corporate registration number; securities account, service speci1c instructions from the Company. account, investment savings account or depository account number with the bank or other securities institution.

30 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) TERMS AND INSTRUCTIONS

Payment for Shares allotted through Danske Bank LISTING ON THE STOCK EXCHANGE For depository account customers of Danske Bank, Danske e Board of Directors of Nobina has applied for admission to Bank will withdraw the payment from the bank account or trading of Nobina’s Shares on Nasdaq Stockholm. Nasdaq securities depository account / investment savings account Stockholm’s listing committee decided on %' May +)%$ to with Danske Bank that has been stated in the application on admit Nobina to trading on Nasdaq Stockholm provided that the settlement date of +0 June +)%$. For this reason, customers the dispersion requirements in respect of the Company’s of Danske Bank must have liquid funds corresponding to at Shares are ful1lled. least the allotted amount (allotted number of Shares multi- Trading is expected to begin around %* June +)%$. Paid up plied by the price of the O#er) available on the settlement date Shares will, after Joint Bookrunner handling, be transferred of +0 June +)%$ as of %:)) a.m. CET. to the securities account, service account or securities deposi- For investment savings accounts at Danske Bank, the tory account speci1ed by the acquirer. e time required to following applies: in the event that the application results in transfer the payment and Shares to such accounts as speci1ed allotment of Shares, Danske Bank will, using the liquid funds by the acquirer implies that the acquirer will not have the that are held available on the connected account, purchase the Shares available in the speci1ed securities account, service corresponding number of Shares in the O#er and then sell account or securities depository account until around +0 June them on to the customer at the o#ering price. +)%$. Payment for allotted Shares for customers with a securities In the event that Shares are not available in the acquirer’s account or depository account in another bank shall be made securities account, service account or securities depository in accordance with the instructions in the received contract account before +0 June +)%$, this may mean that the acquirer note. cannot sell these Shares on Nasdaq Stockholm on the day that the Shares begin to trade, i.e. around %* June +)%$, but at the Insufficient or incorrect payment earliest when the Shares are available on the securities If su8cient funds are not available in the bank account, secu- account, service account or securities depository account. rities depository account or investment savings account on the Moreover, trading will commence before the terms and condi- settlement date, or if full payment is not made in due time, tions for the completion of the O#er have been ful1lled. allotted Shares may be transferred and sold to another party. Trading will be conditional on completion of the O#er and, e party who initially received an allotment of Shares in the should the O#er not be completed, any Shares delivered shall O#er may be required to pay the di#erence should the transfer be returned and any payments cancelled. price in such transfer be less than the price in the O#er. In connection with the O#er, the Stabilisation Manager, or its agents, on behalf of the Joint Bookrunners, may carry out The institutional Offer transactions on Nasdaq Stockholm which stabilise the market Institutional investors are expected to receive information price of the Shares or maintain the price at a level that deviates regarding allotment in a particular order around %* June +)%$, from what would otherwise prevail in the market. See “ Plan of after which contract notes will be distributed. Full payment distribution—Stabilisation ”. for allotted Shares shall be made in cash no later than +0 June +)%$. Note that if full payment is not made in due time, allot- RIGHT TO DIVIDENDS ted Shares may be transferred to another party. e party who e Shares carry the right to dividends for the 1rst time on the initially received allotment of Shares in the O#er may be record date for a distribution which occurs after the listing of required to pay the di#erence should the transfer price in such the Shares. Any dividend is distributed according to the reso- transfer be less than the price in the O#er. lution of the general meeting of Shareholders. is is handled by Euroclear Sweden or, in the case of nominee-registered REGISTRATION AND RECOGNITION OF ALLOTTED holdings, in accordance with the practices of each nominee. AND PAID-UP SHARES Rights to dividends accrue to persons registered as owners on Registration with Euroclear Sweden of allotted and paid the Share register maintained by Euroclear Sweden on the Shares is expected to take place around +0 June +)%$, for both record date determined by the general meeting of Sharehold- institutional investors and the general public in Sweden, after ers. In relation to withholding tax deductions, see section which Euroclear Sweden will distribute a securities notice “Tax considerations in Sweden ”. See also “ Business description— stating the number of Nobina Shares that have been registered Financial targets ” and “ Sharecapital and ownership structure— in the recipient’s securities account or service account. Share- Dividends ”. holders whose holdings are nominee-registered will be noti1ed in accordance with the procedures of the respective nominee.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 31 TERMS AND INSTRUCTIONS

TERMS AND CONDITIONS FOR COMPLETION OF INFORMATION ABOUT THE HANDLING OF THE OFFER PERSONAL INFORMATION e O#er is conditional upon Nobina, the Selling Share- Anyone acquiring Shares in the O#er will submit certain holders, and the Joint Bookrunners entering into the Placing information to Carnegie, Danske Bank and Pareto Securities. Agreement, which is expected to occur around %- June +)%$. Personal information submitted to Carnegie, Danske Bank For more information on terms and conditions for the imple- and Pareto Securities will be processed in data systems to the mentation of the O#er and the Placing Agreement, see “ Plan extent required to provide services and manage customer of Distribution—Placing Agreement ”. arrangements. Personal information obtained from sources other than the customer may also be processed. e personal OTHER INFORMATION information may also be processed in the data systems of com- e fact that Carnegie, Danske Bank and Pareto Securities are panies or organisations with which Carnegie, Danske Bank acting as Joint Bookrunners does not imply that the respective and Pareto Securities cooperate. Information pertaining to Joint Bookrunner regards persons who have applied for Shares the treatment of personal information can be obtained from pursuant to the O#er (an “acquirer”) as clients of the Joint Carnegie’s, Danske Bank’s and Pareto Securities’ o8ces, Bookrunner. e acquirer is only regarded as a client of the which also accept requests for the correction of personal respective Joint Bookrunner if the Manger has advised the information. acquirer about the placement or has otherwise contacted the Address details may be obtained from Carnegie, Danske acquirer individually about the investment or if the acquirer Bank and Pareto Securities through an automatic procedure has applied via the Joint Bookrunners’ o8ce or internet bank. executed by Euroclear Sweden. e outcome of the Joint Bookrunner not regarding the acquirer as a client for the placement is that the rules for pro- tecting investors under the Securities Market Act (+))-:$+*) will not be applied to the placement. Among other things, this means that neither so-called client classi1cation nor so-called suitability assessment will be applied to the placement. As a result, acquirers are themselves responsible for having ade- quate experience and knowledge to understand the risks asso- ciated with a placement.

32 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) MARKET OVERVIEW

MARKET OVERVIEW

Certain information set forth in this section has been derived from external sources, including the Company Market Study and publicly available industry publications or reports. Industry publications and reports generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. e Company believes that these industry publications, reports and forecasts are reliable, but have not independently veri1ed them and cannot guarantee their accuracy or completeness. e projections and forward-looking statements in this section are not guarantees of future performance and actual events and circumstances could di#er materially from cur- rent expectations. Numerous factors could cause or contribute to such di#erences. See “ Important informa- tion—Business and market data ”, “ Forward-looking statements and presentation of #nancial and other informa- tion—Forward-looking statements ” and “ Risk factors ”.

THE MARKET IN BRIEF e Nordic public transport market consists of a wide range of worth approximately SEK &+ billion %) , according to the Com- transportation modes including buses, trains and metros and pany Market Study. e various modes of public transporta- trams. e total market was worth approximately SEK '& bil- tion have various features and advantages, as summarised in lion in +)%&, of which the Nordic public bus transport market, the table below. which was the single largest mode of transportation, was

FIGURE 7:1 PUBLIC NORDIC TRANSPORTATION MODES

Bus Train and metro Tram Public transportation trips in Sweden * ~WY% ~UT% ~II% Flexibility ✓✓✓ ✓ ✓✓ Low cost ** ✓✓✓ ✓✓ ✓ Degree of environmental friendliness ✓✓ (✓) ✓✓✓ ✓✓✓ Low infrastructure dependency ✓✓✓ ✓ ✓ Rating from ✓ to ✓✓✓

* The remainder accounts for sea transport. ** Annual capital and maintenance costs per passenger kilometre.

e Nordic public bus transport market is de1ned as regional concessions is decreasing slowly. In Southern Europe, conces- bus services in Sweden, Norway, Finland and Denmark. On sions are more common and the development of public con- an aggregated level, approximately ')5 of the market is cur- tract tendering is limited. In the United Kingdom, the market rently outsourced pursuant to public tender contracts, accord- is fully deregulated, enabling local public transport operators ing to the Company Market Study. In Sweden and Denmark, to operate in all geographical regions. e Nordic public bus all or substantially all regional tra8c is being tendered. e transport market is relatively homogeneous with a uniform majority of regional bus services in Norway and Finland is model for contract tendering in all four countries. outsourced and, in the Company’s experience, the proportion e Nordic public transport market is governed by the of services outsourced, versus delivered by public authorities Utilities Directive, which repealed the former EU Directive or private companies operating via concessions, is increasing. +))&/%-/EC. According to the Utilities Directive, all PTAs in Each local PTA is responsible for the provision of public the Nordic countries are required to hold an open and trans- transport services in the respective region. In total, according parent tender process when outsourcing public transport ser- to the Company Market Study, there are *$ PTAs in the vices to a third party operator. Sweden, Norway, Finland and Nordic region. e PTAs are typically owned by the counties Denmark are all in the process of implementing the Utilities in the respective region and are funded through tax subsidies Directive (Norway by virtue of its membership of the EEA), and ticket revenues. which must be transposed into national law by %* April +)%(. e Nordic region is generally perceived to be at the fore- e changes include enhanced rights for small- and medium- front of the development of public tendering of transport con- sized companies, more emphasis on quality and societal goals, tracts. In Central Europe, public tendering of transportation rather than on price, in assessing bids, and the ability to contracts is at an early stage of development, and the share of exclude bidders for persistent poor past performance.

%) Based on the latest reported revenue, excluding interregional express bus tra8c.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 33 MARKET OVERVIEW

Public transport operators base their bids on information Environmental awareness contained in the contractual documentation, which is made Heightened environmental awareness has become a political available by the PTA. is documentation sets out any pre- priority. e Nordic countries are frontrunners in terms of quali1cation requirements, commercial conditions, technical implementation of policies on environmental sustainability. bus speci1cations, timing, award procedure and the grounds For example, in +)%0, Sweden was ranked the most sustainable for evaluation of tenders. PTAs may evaluate tenders on the country in the world (out of $' countries) based on the use of basis of the lowest price or, more typically, on the basis of the renewable energy sources, low carbon dioxide emissions and principle of the “most economically advantageous tender”, social and governance initiatives, according to the investment using criteria, including quality, price and environmental 1rm Robecosam. characteristics as well as the track record and reputation of the Public awareness of environmental issues has stimulated relevant operator. demand for public transportation in the Nordic region. For example, from +))* to +)%&, the share of the population in the NORDIC PUBLIC TRANSPORT MARKET Nordics that used environmentally-friendly transportation in e Nordic public transport market is expected to experience the past month for climate-related reasons increased by six stable growth over the next three years, according to the Com- percentage points from &$5 to $%5, according to the European pany Market Study, as a result of a combination of several Commission. favourable trends. Market growth is expected to be driven by Environmental concerns have intensi1ed focus on control- urbanisation, an increased focus on environmental sustaina- ling congestion from private road vehicles. As a result, a num- bility and political initiatives focused on improving personal ber of large Nordic cities, such as Stockholm, Gothenburg, mobility, and increased demand for public transport. Oslo, Bergen and Stavanger, have introduced, or extended, congestion charges in the city centres. ese congestion Increasing urbanisation charges are aimed at discouraging automobile tra8c and are e population of the ten largest Nordic city regions increased designed to increase the use of public transportation. For by almost (5 from +)%) to +)%&, as a result of both population example, during a trial period from January to July +))( fol- growth and a continuing trend of urbanisation, according to lowing the introduction of the congestion charge in Stock- Statistics Sweden. Increasing urbanisation in the Nordic holm, private vehicle tra8c entering the charging zone during region is placing additional pressure on local transport systems charging hours decreased by ++5 and public transport passen- to provide e8cient transport solutions. Consequently, ger volumes increased by &.$5, according to Stockholms- improved public transport has become a priority in the e#ort försöket. to promote sustainable city development. Among all EU countries, Sweden has so far experienced Public initiatives to increase public transport the largest increase in population concentration and the e main source of revenue for Nordic public transport opera- Company expects a similar development in the other Nordic tors is the PTAs’ spending on public transport, which in turn countries. Furthermore, Oslo and Stockholm are currently the is dependent on government tax funding and ticket revenues. two fastest growing capital cities in Europe. As demonstrated As a result of increased urbanisation and environmental by the graph below, a majority of the population increase in awareness, initiatives to extend public transport have been the Nordics has occurred in urban regions with a population taken in the Nordic region. For example, in Sweden, the of between one and 1ve million. government announced a goal to double the public transport market share by +)+) and, in Denmark, the government FIGURE 7:2 POPULATION BY URBAN SIZE (MILLION) approved a “green tra8c policy” with the objective to increase bus tra8c by $)5 by +)0) according to bussmagasinet.se.

4 Furthermore, in June +)%&, Malmö became the 1rst city to 4 3 1 2 implement the Bus Rapid Transit (BRT) solution, a system 1 0 1 with exclusive driving lanes and tra8c signal priority for buses. 16 16 16 e contract is a joint venture between Nobina Sweden and Skånetra1ken. e level of public spending on public transport is expected to vary by country over the coming years. In Sweden, tax 4 4 4 subsidies have more than doubled since +))) and currently 2005 2010 2015 exceed $)5 of the ticket price. e Swedish government has announced a commitment to invest an additional SEK + billion 1–5 million Fewer than 0.3 million in public transport over the next four years. According to the 0.5–1 million Rural Company Market Study, PTAs’ budgets for public bus trans- 0.3–0.5 million port in Sweden will grow by approximately $5 annually from

Source: Company Market Study. +)%& to +)%-. In Norway, a similar development is expected, and the current government has committed to invest an addi- tional approximately NOK % billion annually over a ten year period. In Denmark, the current government increased its spending on public bus transportation by approximately +-5

34 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) MARKET OVERVIEW

in +)%&–+)%$ , while Finland’s government decreased funding FIGURE 7:4 NORDIC PUBLIC BUS TRANSPORT MARKET of public transport slightly (by around EUR $ million), due BY BUS VOLUME to signi1cant budget de1cits. In general, investment in the Total number of buses announced Nordic public transport market is expected, management believes, to be focused on urban areas, with a goal of enhanc- 3,034 3,002 2,956 2,682 ing sustainable city development. 2,483 2,030 2,039 2,053 Prioritising improved personal mobility 1,673 1,290 1,285 Public transport is designed to improve personal mobility and 1,024 increase public welfare by allowing people to cost-e#ectively travel to work, school or other activities, thus reducing the need for private transport. Public transport operators provide mobility by having simple, a#ordable services to maximise FY11/12 customer satisfaction. is relates to the ambition of position- FY10/11 FY12/13 Outlook FY15/16 FY13/14 FY14/15 FY09/10 FY07/08 FY06/07 FY05/06 FY08/09 ing themselves as a leading force for higher mobility in a sus- FY04/05 tainable society.

The Nordic public bus transport market Buses constitute an attractive transportation mode as a result e Nordic public bus transport market is expected to experi- of the low annual capital and maintenance cost per passenger ence stable growth in the coming three years, according to the kilometre, which is currently substantially lower compared to Company Market Study. In addition to the market drivers for metro, train and tram. In addition, buses provide 0% times the public transport market in general, demand for public bus higher seating capacity per invested SEK compared to trams, transport is expected to be further supported by a low annual according to WSP Sverige. Similar conditions, as illustrated capital and maintenance cost per passenger kilometre of buses below, are expected in the other Nordic countries as well. compared to metros, trains and trams and by a shift towards more environmentally friendly buses. FIGURE 7:5 ANNUAL CAPITAL AND MAINTENANCE In +)%&, total market value for public bus transport in the COSTS (SEK) PER PASSENGER KILOMETRE * Nordic region was estimated to be SEK &+ billion of which Annual capital and maintenance costs (SEK) per passenger km Sweden accounted for SEK %' billion, Norway for SEK ' bil- (in Stockholm, Sweden) lion, Denmark for SEK * billion and Finland for SEK ( billion, 15 according to the Company Market Study.

FIGURE 7:3 NORDIC PUBLIC BUS TRANSPORT MARKET 9 SIZE AND DEVELOPMENT

Nordic public bus transport market (SEK bn) 5 4 CAGR CAGR * 4% 47 3% 42 38 Bus Metro Train Tram

Source: WSP Sverige AB, ^aXX. * Annual capital and maintenance costs includes the costs of vehicle, track and maintenance.

Buses are also an attractive transportation mode from an 2010 2014 2017E environmental perspective. Increased environmental concerns have increased PTAs’ demand for more fuel-e8cient, eco- Source: Company Market Study . friendly buses on contract renewal. Today, sustainability is * CAGR is the compound annual average growth rate. typically part of the assessment in the procurement process involving parameters such as the level of noise, the minimisa- tion of running empty, type of fuel and a respectful approach e Nordic public bus transport market has generated consist- to tra8c in general. Improved technology has facilitated the ently large market volumes in terms of the number of tendered development and deployment of more environmentally- buses since FY)&/)$, as shown in the 1gure below. friendly buses and decreased the average CO+ emission per passenger kilometre. Similar developments as illustrated below are expected in the other Nordic countries as well.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 35 MARKET OVERVIEW

FIGURE 7:6 LOW EMISSION AND NUMBER OF ENVIRONMENTALLY FRIENDLY BUSES

* Gram CO ^ emission per passenger kilometre Percentage of non-fossil fuelled buses in Sweden 24% 470 22% 19% 340 17% 14% 11% 10% 200 9% 9% 7% 110 50

Long Local bus Train Car Air 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 distance bus

Source: co^list.org, Trafikanalys (SCB). * Includes production of vehicles, roads, rails, airports, etc.

From +))$ to +)%&, the number of buses running on renewable majority of PTAs are advanced in terms of development. In fuels more than doubled in Sweden and the number of buses Norway and Denmark, the stage of development is mixed. using biogas increased from approximately 0) to over +,))) In Finland, many of PTAs have recently 1nalised their 1rst according to Transportgruppen. Furthermore, the Volvo round of tendering after previously administering conces- Group, the Swedish Energy Agency, the City of Gothenburg, sions. Västtra1k, Lindholmen Science Park and Johanneberg Science e PTAs typically employ two types of contracts: produc- Park will launch electric buses in Gothenburg in +)%$ as an tion contracts and incentive contracts. In production contracts, initiative to support the development of future public trans- operators are paid 1xed compensation for running a given net- port options. work and timetable. is compensation is based on the number of buses deployed, hours worked and/or kilometres driven. %) PTA OVERVIEW In incentive contracts, compensation is partly or entirely linked In total, there are *$ PTAs in the Nordic region: +* in Sweden, to a variable component, such as number of passengers or cer- six in Denmark, %( in Norway and 0$ in Finland, according to tain qualitative measurements, for example, timetable punctu- the Company Market Study. All PTAs in Sweden, Denmark ality or the number of cancelled journeys. e Nordic public and Norway are active, while - of the 0$ in Finland are active bus transport market has seen a trend towards incentive con- (i.e. are operating public bus transportation through external tracts. ese contracts generally involve relatively more risk operators that are engaged as a result of public tender processes), than production contracts as quality, measured by parameters which brings the total number of active PTAs in the Nordic such as customer satisfaction, operation reliability and environ- region to $-. e PTAs vary in size and approach to the tender mental precaution, and number of passengers are key contract process. e large PTAs normally allow rounds of negotiation, components. However, there is an opportunity to achieve evaluate the tenders based on both price and quality parame- greater returns in these contracts. Company management ters such as client satisfaction and delivery reliability, and are believes that the proportion of incentive contracts will increase willing to implement changes for future tender processes. e going forward. medium and smaller sized PTAs are often willing to imple- e PTAs are typically owned by the counties in the respec- ment policies, once tested and evaluated by the larger PTAs. tive region and funded through tax subsidies and ticket reve- In Sweden, according to the Company Market Study, the nues, as illustrated in the below graph.

%) It may also contain a limited use of incentive-based compensation.

36 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) MARKET OVERVIEW

FIGURE 7:7 MARKET DYNAMICS

Clients Service providers

Public Contract based subsidies payment

Bus services

Ticket revenue

Passengers

Figure -:* shows an overview of selected large Nordic PTAs.

FIGURE 7:8 OVERVIEW OF SELECTED LARGE NORDIC PTAS

Market size PTA Inhabitants (k) Buses (SEK m) Country Movia (Copenhagen region) ^,_^` X,^`a Y,[Xb DK SL (Stockholm region) ^,X`[ ^,XZX _,baY SE Västtrafik (Västra Götaland region – including Gothenburg) X,`X_, X,b`f, [,_aa SE Midtrafik (Midtjylland region – including Århus) X,^bf fb_ X,fZ` DK Skånetrafiken (Skåne region – including Malmö) X,^bY X,aaa ^,[^[ SE Ruter (Oslo and Akershus regions) X,XZa n.a. ^,[`b NO HSL (Helsinki region) X,Xf^ X,[`Z ^,f`b FI Sydtrafik (Syddanmark region) bX` Ya^ bZb DK Nordjyllands Trafikselskab (Aalborg region) _fX YaZ ff[ DK Skyss (Hordaland region –including Bergen) YZf n.a. f[a NO

Source: Company Market Study.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 37 MARKET OVERVIEW

INDUSTRY EVOLUTION AND MARKET TRENDS trend has been reinforced in recent years by the EU procure- Before the 1rst Nordic contract tender for bus services in %'**, ment regime, which stipulates that all public service contracts public bus transport services were awarded as concessions. should be awarded based on a competitive tendering process. A concession can be described as a local market monopoly, All Nordic countries have initiated laws based on the public meaning that an operator is exclusively awarded the responsi- procurement regime, including Norway, which follows the bility for providing public transport services in a speci1c regime as a member of the EEA (see further “ Legal considera- region. tions and supplementary information—Regulation—Regulatory Since the %'')s, the Nordic public bus transport market framework for public transport tenders ”). has undergone a structural change, characterised by deregula- In Sweden and Denmark, all or substantially all public bus tion and liberalisation. As the Nordic public bus transport transport contracts are awarded based on a competitive tender market gradually opened up for competition and public pro- process and, in Norway, *)5 (as of +)%0) of public bus trans- curement, the share of traditional concessions has decreased port contracts were awarded under this process. Concession- substantially. e Nordic region is generally seen as an early based contracts still, however, exist in Finland. e amount of adopter in the development of the public bus transport tendered tra8c in Norway and Finland is expected to gradu- industry. ally increase and reach '$-'-5 by +)%'. e following graph By +)%&, the overall share of the Nordic public bus trans- illustrates the historical and future liberalisation of the Nordic port market awarded by public tender amounted to approxi- markets. mately ')5, according to the Company Market Study. is

FIGURE 7:9 PERCENTAGE OF CONTRACTS SUBJECT TO PUBLIC TENDER

Sweden Denmark ~100% ~100% ~100% ~100% ~95% ~95% ~98% ~95%

2005 2010 2013 Future 2005 2010 2013 Future

Norway Finland ~100% ~100%

80–85% 80–85%

47% 41% ~30% ~20%

2005 2010 2013 Future 2005 2010 2013 Future

Source: Company Market Study.

In addition to the increasing use of incentive contracts, PTAs operational reliability and environmental precaution. A high are increasingly employing a more complex approach to ten- quality evaluation score can therefore be more valuable to the dering, both in terms of pricing and tracking performance PTA and result in the award of a tender to a higher-priced and quality. O#ering the lowest price is no longer a necessity bidder. In general, PTA competency has increased, but there to winning tenders as quality is becoming an important are still large variations with the larger PTAs typically factor, measured by parameters such as customer satisfaction, administrating more complex tender processes.

38 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) MARKET OVERVIEW

COMPETITIVE LANDSCAPE majority of the tra8c is being tendered, there are some e Nordic public bus transport market consists of both local regions, in particular in rural areas in Finland, where conces- and international operators. A few of these operators are pure sion contracts are still prevalent. In these regions, the smaller bus operators while others, in particular the international operators often have a strong position. operators, also conduct subway, commuter rail, streetcar and/ e market structure di#ers in the Nordic countries, with or boat transport in the Nordic region or internationally. e international players active in Sweden and Denmark, mostly market is dominated by a limited number of large operators. local players in Norway and a more fragmented market in In +)%&, the 1ve largest public bus transport operators in the Finland. In Sweden, the largest bus operator is Nobina. In Nordic region accounted for approximately $+5 of total reve- Denmark, the market is fully liberalised and highly competi- nues for the public bus transport market, of which the largest tive, with Arriva as the market leader. In Norway, the majority operator, Nobina, accounted for %(5, according to the Com- of the bus operators are national and involved in several modes pany Market Study. %) of transport, with Nettbuss as the market leader. In Finland, Some of the largest market participants are government- the market is fragmented and dominated by Koiviston Auto. owned international bus operators, for example: Arriva, which Outside Helsinki, bus routes are mostly run by smaller, local is owned by the German government-owned Deutsche Bahn; players. Keolis, which is owned by the French government-owned rail- Among the large operators, Nobina has the strongest EBIT way company SNCF; and Nettbuss, which is owned by the margin, substantially above the second largest operator, Norwegian government-owned railway company, NSB. ese Keolis. Among the smaller bus operators, the Finnish players operators, together with Transdev (owned by Caisse des Pohjolan Liikenne and Koiviston Auto stand out, with strong Depots and Veolia Environment), and Nobina, constitute the EBIT margins, both with a high share of concessions. 1ve largest bus operators in the Nordics. In addition to the Pohjolan Liikenne operates under the Finnish, government- larger bus operators, there are a number of smaller bus opera- owned, railway company VR that has a monopoly in the tors that together hold a market share of some &*5. While the passenger rail industry.

FIGURE 7:10 COMPETITIVE LANDSCAPE The Nordic public bus transport market landscape *

12%

8%

4%

0% EBIT margin (%)

(4)%

(8)% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

Revenue (SEKm)

High degree of concessions

Source: Company Market Study. * Size of bubbles represents market share based on the latest reported revenue; EBIT margin includes other operations in addition to public bus transportation; Thykjaer was sold to Umove in March ^aX_.

%) Based on the latest reported revenue.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 39 MARKET OVERVIEW

Large local operators are expected to be well positioned to bene1t from the underlying market growth. As tender pro- cesses are becoming more complex with increased focus on quality, scale is emerging as a key competitive advantage. Scale provides the opportunity to run operations more e8- ciently by active 7eet, tra8c and sta# management and thereby ensure a high level of quality. e importance of scale also constitutes a barrier to entry for new operators in the Nordic region. Larger operators bene- 1t from economies of scale in purchasing and sourcing of, for example, new buses, spare parts and fuel. Best practice sharing within tendering analysis, tra8c planning and contract start- up and close-downs is also advantageous. Additionally, exist- ing operators with a clear Nordic focus have extensive local knowledge, obtained from long relationships and continuous dialogues with PTAs, which facilitates tender pricing and sub- mission. In the perspective of PTAs, awarding a contract to a new entrant implies a larger risk, due to lack of evidence of the ability of the new operator to meet contract speci1cations.

40 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) BUSINESS DESCRIPTION

BUSINESS DESCRIPTION

COMPANY OVERVIEW in each tender and are subsequently reviewed in the Compa- Nobina is the leading public bus transport operator in the ny’s monthly contract review. Nordic region measured by revenue with an aggregated mar- Nobina has, over the last ten years, invested in its opera- ket share of %(5. %) e Company operates in Sweden, Norway, tional e8ciency. Planning e8ciency, which is de1ned as the Finland and Denmark. Nobina’s public bus transport services number of timetable hours (i.e., the Company’s estimate of accounted for '(5 of its net sales in FY%&/%$. e Company the number of hours compensated under a contract) in the also o#ers express bus services in Sweden through Swebus, relevant client contract divided by the number of total hours which accounted for &5 of Nobina’s net sales in the same worked, increased from (-5 in FY)$/)( to -+5 in FY%%/%+, period. In FY%&/%$, Nobina generated net sales of SEK -,$&' largely driven by optimised routes, timetables and improved million and an EBITDA margin of %+.+5. Since FY)$/)(, the depot locations. Since FY%)/%%, planning e8ciency has Company’s net sales have increased at a compound annual remained stable at around -+5, which the Company considers growth rate of $.&5, while EBITDA increased from SEK –$* to be the optimal level in the current contract portfolio. Sub- million in FY)$/)( to SEK '++ million in FY%&/%$. Nobina sequently, Nobina has focused on contract portfolio optimisa- had approximately -,()) full-time equivalent employees as of tion. e shift towards higher pro1tability contracts is contin- +* February +)%$ and carried more than one million passen- uing and existing contracts are proactively being re-evaluated gers per day in FY%&/%$. As of +* February +)%$, the Company to improve e8ciency and thus pro1tability while ensuring had one of the largest bus 7eet in the Nordics, with 0,0&- buses that clients’ needs are met. in operation. e Company purchases and manages buses through its Nobina has a visible and diversi1ed revenue base with low wholly-owned subsidiary, Nobina Fleet. Nobina Fleet pur- dependency on any single region or contract and a high credit chases buses based on a Life Cycle Cost (“ LCC ”) analysis, of quality, publicly-funded, client base. Revenues are generated which fuel consumption is the most important component. primarily through long-term contracts, which typically have As a result of this centralised structure, Nobina is able to re- durations of 1ve to ten years and often include extension allocate buses internally between di#erent contracts, both options of one to two years which may be exercised through during the duration of the contract and at the end of the con- mutual agreement between the PTA and the operator. In tract. In FY%&/%$, $&- buses were re-allocated. is 7exibility is Nobina’s contracts that expired during the last three years, enabled by the large scale of the 7eet, combined with Nobina’s this option was exercised at a weighted average rate of *-5 +) . competency and centralised focus. Since the mid-+)))s, Nobina has expanded its contract port- e Company is partly protected from input cost increases folio and has been successful in winning new contracts: the by indexation clauses under its contracts in accordance with number of buses secured under successful tender processes has industry norm, where Nobina, as the largest Nordic operator, exceeded the number of buses in Nobina contracts up for re- takes an active role in de1ning the industry practice. Manage- tender during the relevant year, by an average of %&5 per year. ment believes that the indexation formula typically employed, In FY%&/%$, the Company won %0 of 0+ submitted bids. In addi- su8ciently re7ects Nobina’s current cost structure. In addi- tion, Nobina has successfully focused on improving the pro1t- tion, the Company has a 7exible cost structure where major ability of its contracts by optimising its contract portfolio mix costs, e.g. employee agreements, maintenance contracts and and existing contracts. As of +* February +)%$, the Company service depots are matched with contract length. had %)$ contracts, with the +$ largest contracts representing (%5 of net sales. 0) INVESTMENT HIGHLIGHTS Nobina has strict internal return requirements when ten- Favourable long-term trends support attractive dering for new contracts, and upcoming tenders are evaluated market in line with the Company’s clear focus on qualitative risk Investment in public transport is expected to remain stable assessment. All risks are 1rst quanti1ed before management over the coming years, underpinned by several favourable centrally analyses and determines pricing strategy. Subsequent fundamental long-term trends. e public sector is highly to winning a contract, the performance and pro1tability of focused on improving mobility and transport facilities, which the contract is evaluated on a continuous basis by reference to is increasingly important as the urbanisation trend in the certain key performance indicators, for example, passenger Nordic region continues. Furthermore, environmental aware- satisfaction, completed routes as a percentage of planned ness among both the public sector and private individuals is routes and tra8c e8ciency. Comparisons between calculated contributing to increased demand for public transport. Several and actual performance are tracked monthly and selective key public initiatives to enhance public transport are currently improvement measures are taken immediately if any devia- being implemented. For example, the introduction of conges- tions appear. Key performance indicators (“ KPIs ”) are de1ned tion charges in Sweden and Norway during the past years has

%) Based on the latest reported revenue, excluding long distance tra8c (i.e. express bus). +) Based on the percentage of options exercised in each country in which the Group operates, weighted by the percentage of total Group revenue earned in that country. 0) Excluding Swebus.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 41 BUSINESS DESCRIPTION

reduced car usage in the larger cities in favour of public trans- Nobina has developed an e8cient tendering process based port. In Sweden, the government has announced a target of on the Company’s long history in the Nordics. Nobina’s man- doubling the public transport market share by +)0). Addition- agement believes that the Company’s accumulated internal ally, Denmark aims to increase bus tra8c by $)5 by +)+). competence, combined with advanced prospecting, in7uenc- According to the Company Market Study, market growth is ing and tendering processes, positions Nobina well to win the expected to be supported by continued liberalisation of the preferred and most attractive tenders in the region. Upcom ing Danish and Finnish markets. tenders are analysed based on several criteria, including Buses constitute a highly attractive transportation mode to contract model, current urbanisation, expected population PTAs. e annual capital and maintenance cost per passenger growth, compensation terms and risk. Attractive tenders are kilometre is signi1cantly lower for buses compared to metro, selected and a price is submitted, taking into account risk train and tram, according to Statistics Sweden. Additionally, coverage and conservative assumptions with respect to varia- improved technology has allowed more environmentally ble incentive components. Following the award of a contract, friendly buses and decreased the average CO+ emission per the performance and pro1tability of the contract is evaluated passenger kilometre. Altogether, this is expected to support on a regular basis by reference to certain key performance growth of the Nordic public bus transport market. indicators, for example, passenger satisfaction, completed e current Nordic public bus transport market was valued routes as a percentage of planned routes and tra8c e8ciency. at SEK &+ billion in +)%& and is estimated to grow by a com- e Company has an advanced and well-developed tra8c pound annual growth rate of &5 until +)%-, reaching SEK &- planning system, which has allowed the Company to improve billion, according to the Company Market Study. cost e8ciency by, for instance, reducing the distance driven Nobina has successfully exploited these positive market using empty buses outside of ordinary service, for example, trends, growing its net sales from SEK &,(*0 million to SEK between di#erent routes or between the end of a route and the -,$&' million in the period between FY)$/)( and FY%&/%$. bus depot. e initial start-up phase of a contract is another anks to the large and growing market, Nobina encounters a important component in enabling e8cient tra8c planning. large amount of tenders and can therefore be selective when is phase typically involves large migrations of personnel tendering for new contracts. and facilities to service the new contract and it is essential to ensure that the correct number of buses is readily available on Pan-Nordic market leader with strong profitability the 1rst contract day. Nobina can typically do this overnight. Nobina is the Nordic region’s largest and most experienced e Company has operated a centralised 7eet management public transport operator with a market share of %(5, accord- system since +))( and derives several bene1ts from this ing to the Company Market Study. With operations in Swe- approach. e Company is able to minimise the total number den, Norway, Finland and Denmark, Nobina is the only dedi- of buses in its 7eet by maintaining a high maintenance stand- cated pan-Nordic operator. e Company’s long history in the ard, combined with e8cient allocation of buses between Nordic public transport market has provided Nobina and its contracts and regions. With a large 7eet and a centralised management team with substantial local knowledge and mandate to re-allocate buses on a regular basis, Nobina can strong relationships with a majority of the $- active PTAs in achieve a high level of optimisation with respect to bus utilisa- the Nordic region (i.e. PTAs that are operating public bus tion. is ultimately results in a reduced need for new buses transportation through external operators that are engaged as and less incremental investment in connection with individual a result of public tender processes). contracts. Reallocating buses is also a key tendering advantage Nobina is also a driving force in developing the market as Nobina can, to a large extent, use existing buses in new through frequent discussions with PTAs regarding ideal contracts and thereby o#er a lower price while maintaining development of tra8c solutions for the bene1t of both society the Company’s strict internal return requirements, which and operators. Additionally, the Company is part of an initia- increases the Company’s contract win rate. In addition, econ- tive to develop recommended standard terms between opera- omies of scale and centralised purchasing increases Nobina’s tors and PTAs, as well as forming indexation committees in negotiating power with respect to bus manufacturers and each Nordic country. other suppliers. Among the large public bus transport operators in the Nordic region, Nobina has the strongest EBIT margin. See Actively managed contract portfolio with clear focus “Market overview—Competitive landscape—Figure (:)* ”. on contract optimisation In recent years, Nobina has carried out a number of contract Efficient operational setup based on economies management initiatives to enhance pro1tability in its contract of scale portfolio and increase value for stakeholders. is is mainly Nobina applies strict internal return requirements when ten- done by increasing pro1t optimisation by continuous e8ciency dering for new contracts, and upcoming tenders are evaluated improvements in new contracts, while also choosing not to according to the Company’s procedures for qualitative risk renew expiring contracts that do not meet the Company’s assessment. All identi1ed risks associated with a contract are internal return requirements. Actions undertaken by the quanti1ed before management centrally analyses the risks and Company in order to maximise pro1t optimisation include determines the pricing strategy relevant for the applicable de1ning improvement assumptions per contract in the budget, contract. e8ciently running day-to-day business activities and report- ing contract reviews on a monthly basis.

42 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) BUSINESS DESCRIPTION

Stable and diversified revenue base with low risk VISION AND FINANCIAL TARGETS contract counterparties Vision In FY%&/%$, '(5 of Nobina’s net sales were generated from Nobina’s vision is “Everyone wants to travel with us”. ereby, public bus transport services. PTA contracts typically have a the Company would like to contribute to increased mobility duration of 1ve to ten years with an extension option of one to in society through price worthy, simple and friendly services. two years that may be exercised through mutual agreement Every day, Nobina ensures that more than one million people between the PTA and the operator. e long-term nature of get to work, school or other activities by delivering public bus Nobina’s contract portfolio and the structure of PTA con- transport services. tracts provide for high revenue visibility. Nobina’s contract base is diversi1ed without dependence Financial targets on any single region or client. In FY%&/%$, the +$ largest con- Nobina has adopted the following 1nancial targets: tracts accounted for (%5 of net sales %) . As public bus transport services are publicly 1nanced in the Nordic countries, cycli- t Nobina targets to grow net sales at a rate faster than the cality among the Company’s clients’ spending is low. More- market. over, the counterparty credit risk exposure is limited for t Given the intention to fully repay the Bonds shortly after Nobina, as the PTAs are characterised by strong credit quality the O#er, Nobina is raising its current target (of an EBT margin in excess of &.)5 in the medium term). Nobina and by a propensity for making timely payments of their 0) contractual obligations. now aims to grow its EBT and, on an annual basis, reach an EBT margin in excess of &.$5 in the medium term. Solid financial track record with predictable and t e Company intends to use the proceeds from the O#er growing cash flows to repay its outstanding Bonds. It is Nobina’s intention to e Company has a strong and resilient historical 1nancial primarily use 1nancial leases when funding the Company’s growth. Under normal circumstances, Nobina aims to performance, which re7ects the robustness of the business &) model. Nobina’s net sales, from FY)$/)( to FY%&/%$, have maintain a net leverage ratio of 0.)x to &.)x EBITDA . grown at a compound annual growth rate of $.&5. During the same period, Nobina’s EBITDA increased from SEK –$* e assumptions on which the Company has based its 1nan- million to SEK '++ million. e EBITDA expansion between cial targets include that: FY)$/)( to FY%&/%$ is mainly a result of increased operational t the Company’s average annual net contract win rate will be e8ciency. e Company managed to rapidly increase the at least in line with historic levels; planning e8ciency +) from (-5 in FY)$/)( and has today t the Company is successful in winning and implementing a reached a stable level of approximately -+5, which the Com- balanced mix of new contracts with attractive terms in line pany considers to be the optimal level in the current contract with the assumptions made during the respective tender portfolio. Since FY%%/%+, the Company has focused on con- processes; tract optimisation. Additionally, pro1tability in existing con- t the Company is able to make accurate predictions of the tracts is continuously enhanced by operational improvements, costs to be incurred for the operation of tenders won on contract mix is optimised and new attractive contracts are long-term contracts (such predictions include signi1cant won. Revenue indexation partly compensates the Company assumptions that may fail to materialise); for potential cost increases with respect to, for example, t the Company is successful in executing further contract, salaries and fuel, which contributes to reduced risk of margin operational and scale improvement initiatives that it has pressure. Nobina believes that the cumulative indexation undertaken to date and the realising continued positive coverage under the Company’s current contract portfolio e#ects of such initiatives; and su8ciently re7ects the Company’s current cost structure. e t the Company is able to invest in buses, equipment and Company has a strong and predictable underlying cash 7ow other long-term assets on contract terms that are in line generation. with current contracts and of su8cient volumes to adequately serve new contracts.

%) Excluding Swebus. +) Planning e8ciency is de1ned as the number of timetable hours in the relevant client contract divided by the number of total hours worked. 0) e Company de1nes EBT as pro1t/loss before tax. &) Pro1t/loss for the year before net 1nancial items, tax, depreciation/amortisation and impairment of PPE and intangible assets and capital losses from the disposal of non-current assets. EBITDA based on last twelve months. Leverage may temporarily exceed this range in relation to the commencement of large contracts.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 43 BUSINESS DESCRIPTION

e assumptions that may also be a#ected by external factors acquired Swebus. In the years following the acquisition, the beyond Company management’s in7uence include the 1nancial leverage of the business increased to levels which, in following: conjunction with severe under-indexation of contracts and a deteriorating 1nancial performance, became increasingly the individual markets where the Company is currently t unsustainable. active will grow at a level approximately in line with the In +))&, the current Chief Executive O8cer and Chief level of market growth expected across these markets Financial O8cer were hired to implement a structural change according to the Company Market Study; in the business. In +))$, a 1nancial reorganisation of Concor- tender bidding prices will largely be in line with current t dia Bus was carried out, through which the bondholders at the in7ation trends in the individual markets in which the time exchanged their bond holdings for newly issued shares, Company operates and that revenue indexation formulae representing '-.$5 of the share capital of Concordia Bus. in the Company’s contracts will su8ciently re7ect in7ation In March +))(, as part of the e8ciency improvements in the Company’s cost structure; implemented to revitalise the business, the Company’s man- in relation to personnel expenses, including costs resulting t agement established a stand-alone bus 7eet management sub- from the collective bargaining process or local negotiations sidiary now named Nobina Fleet AB. is decision has been of salaries and wages or other bene1ts agreed under such instrumental in increasing the e8ciency of the Company’s processes, increases in salaries and wages will be largely in sourcing and 1nancing of buses. line with general labour market; In November +))(, the Company sold Interbus AB, which no legal or illegal strikes, regulated work stoppages or other t was part of the Swebus brand, to focus its operations on public adverse industrial action will occur; bus transport. In +))*, the Company entered Denmark in a there will be no extraordinary weather conditions (such as t strategic move to become the only pan-Nordic dedicated heavy snow fall, storms and 7ooding); and operator. there will be no change to existing political, legal, 1scal, t On %( December +))', the Company changed its legal market or economic conditions or in applicable legislation, name from Concordia Bus AB (publ) to Nobina AB (publ). regulations or rules (including any implementation of the e catalyst for this rebranding was in part to standardise the Utilities Directive), which, individually or in the aggregate, brand throughout the operating subsidiaries, to introduce a are material to the Company’s results of operations. brand which was neutral from a transport and modal perspec- tive, and to allow the Company to present a uniform pro1le Certain statements in this section and in the section “—Invest- across the Nordic region. ment Highlights” including, in particular, the #nancial targets In December +)%+, Nobina re1nanced its EUR *$ million described immediately above, constitute forward-looking state- senior notes by converting a portion of the existing debt into ments. "ese forward-looking statements are not guarantees of shares of Nobina AB and issuing a new SEK $$) million bond, future #nancial performance and Nobina’s actual results could which was listed on Nasdaq Stockholm. is provided the di&er materially from those expressed or implied by these forward- Company with an improved capital structure. In April +)%&, looking statements as a result of many factors including, but not the Company announced the decision to issue a senior, secure limited to, those described under “Forward-looking statements corporate bond of SEK $$) million with more attractive terms. and presentation of #nancial and other information—Forward- e bond was listed on Nasdaq Stockholm in June +)%&. looking statements” and “Risk factors”. Investors are urged not to place undue reliance on any of the statements set forth above. BUSINESS MODEL COMPANY HISTORY AND DEVELOPMENT Nobina ensures that each day more than one million people arrive at work, school or other activities by delivering public Nobina has its origin in the 1rst bus transport business found- bus transport services in Sweden, Norway, Finland and ed by the Swedish national rail operator, SJ Buss, more than Denmark. e Company aims to create value by delivering %)) years ago. Swebus AB was later founded by SJ following bene1ts to passengers, clients and society. In contrast to the merger of SJ Buss, Postens Diligenstra1k (then owned by Nobina’s public bus transport services, Nobina’s express ser- the national Swedish postal authority) and GDG (Göteborg- vice operator, Swebus, generates revenues through direct ticket Dalarna-Gävle), a company with its roots in a large privately- sales to passengers in a fully deregulated market. Swebus is the owned railroad. SJ sold Swebus in %''( to Stagecoach plc as a market leader in Sweden for interregional express bus services result of a decision to focus on its core rail operations. with revenue of SEK +*& million in FY%&/%$, which accounted In +))), Concordia Bus, a company owned by Schøyen for &5 of Nobina’s net sales. Gruppen AS, which had been serving as a bus operator in Norway since %'+), and Goldman Sachs Private Equity,

44 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) BUSINESS DESCRIPTION

e table below illustrates key facts about Nobina by segment.

FIGURE 8:1 OVERVIEW OF KEY FACTS BY SEGMENT AS AT 28 FEBRUARY 2015

Sweden Denmark Norway Finland Swebus Managing J. Bosaeus Managing N.P. Nielsen Managing P. Engedal Managing T. Ward Managing J. Palmkvist director director director director director Number of `a Number of f Number of f Number of ^Z Number of – contracts contracts contracts contracts contracts Number of ^,^YX Number of XZ[ Number of Y`Y Number of YaX Number of Yf buses buses buses buses buses Contract [b Contract [ Contract _ Contract [ Contract – value value value value value (SEK bn) * (SEKbn) * (SEKbn) * (SEKbn) * (SEKbn) Number of _,^bb Number of [_` Number of f^a Number of f[f Number of XbX FTEs FTEs FTEs FTEs FTEs

* Includes total expected revenue from signed contracts (both commenced and not yet commenced), excluding potential extension options and all revenue generated by Swebus. Includes estimates of indexation and incentive revenue. Expected indexation revenue is estimated on a contract-by-contract level, based on actual historic levels and Company expectations for future development. Expected incentive revenue from commenced contracts is estimated based on actual historic performance. Expected incentive revenue from not yet commenced contracts is based on the performance assumptions made in Nobina’s tender pricing for the relevant contract, following thorough pricing and risk analysis. The information on contract value constitutes forward-looking statements. Forward-looking statements are not guarantees of future financial performance and the Company’s actual future revenue could differ materially from that expressed or implied by such forward-looking statements as a result of many factors, including those described under “ Forward-looking statements and presentation of financial and other information—Forward-looking statements ” and “ Risk factors .”

e Company’s public bus transport business model can be described in 1ve steps: %) prospecting; +) in7uence and selection; 0) tender process; &) contract improvement and delivery; and $) cost control.

FIGURE 8:2 BUSINESS MODEL

Tender process Activ contract management Creating value for

1 3 4 Prospecting Tender process Contract improvement and delivery

NJIdentification  of NJWinning  the NJEfficient  start-up and management NJ Clients appropriate right contracts NJOptimise  benefit for passengers, contracts clients and other involved parties NJ Passengers NJSecure  contract extension NJ Owners

2 5 NJPoliticians  Influence and Cost control NJ Suppliers selection NJWell  functioning management- NJ Employees NJActive  dialogue system to align interest NJEfficient  traffic planning regarding contract NJOptimised  bus fleet structure

Interested parties needs and wishes

X) Prospecting: identification of appropriate contracts ^) Influence and selection: active dialogue to align interests Nobina operates in a long-term, relatively predictable market regarding contract structure with high visibility of upcoming tenders, which the Company A thorough analysis and listing of priorities for each tender is continuously monitors and analyses. A ranking process follows done long before the tender is made public. Nobina engages in where Nobina carefully ranks the tenders according to profita- continuous dialogue with politicians, clients and industry bility potential and value add for its stakeholders. organisations to interpret the content and conditions and high- light certain contract terms, with a goal of achieving efficient and stable operations that attract more passengers, where passengers’ satisfaction in relation to cost is considered to be of highest priority. This strengthens confidence in Nobina as a competent partner that has the ability to deliver services based on the various stakeholders’ needs.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 45 BUSINESS DESCRIPTION

[) Tender process: winning the right contracts If Nobina’s analysis of the contract is positive and an invitation It is critical for Nobina to ensure that a systematic process is in to tender is announced, Nobina and other interested operators place prior to, during and after a tender has been submitted. then typically have between six and twelve months to prepare This work can, in certain cases, begin up to three years before a bid. At that point, Nobina puts together a dedicated project a tender is submitted. In order to determine the business team for the tender. Interpretation of conditions is key, as well potential of a contract, it is important to take into account and as comparing the terms stated in the tender with conclusions interpret what has been concluded during the influence and from the preparatory analysis. It is not unusual for as many as selection phase, as well as identify, analyse and assess the Ya employees to be involved on a full-, or part-time basis during contract’s risks and opportunities. Management conducts a the tendering process. With the team in place, work on the con- thorough risk assessment, including planning efficiency opti- tent and packaging of the tender offer can begin. Nobina also misation and calculating the cost of, for example, fuel and sala- assesses the effects of various planned activities on the con- ries. Evaluating the level of risk is key when determining the tracts based on incentives to get more people to choose public final offering price. As part of this process, management identi- transport. It is important to provide a fair description of trans- fies operational and contractual risks, defines the optimal bus port services that easily, safely and affordably meet client and fleet structure and negotiates third-party agreements related passenger needs as quality evaluations are becoming an to, for example, the leasing of depot facilities. increasingly common feature in the tendering process.

FIGURE 8:3 CONTRACT LIFE CYCLE

Intensified presence and participation in stakeholder dialogue

Tender process, 3–6 months Potential extension, Start-up phase, 1–2 years 9–12 months

CONTRACT START

Deliver transportation, 5–10 years Continous presence and dialogue with stakeholders

Y) Contract improvement and delivery: efficiently managing the Company to generate additional cash flow and increase the start-up phase, optimising benefits for stakeholders, return on capital. In Nobina’s contracts that expired during the and securing contract extension last three years, this option was exercised at a weighted aver- Efficiently running the start-up phase of a new contract is an age rate of fb% X) . important and fairly complex process due to migration of a large amount of personnel and facilities. In the succession _) Cost control: market leading traffic planning, well-func- phase, Nobina often takes over properties and the previous tioning management system and optimisation of bus fleet providers’ employees, in accordance with EU regulations on Nobina has initiated centralised management systems for its the takeover of operations. Bus drivers usually change employ- traffic planning in many major regions to streamline and ers regularly. Dialogue with the new employees is therefore a improve delivery quality. This has systematically improved crucial component of a successful start-up of services. Major cost efficiency by reducing empty driving routes. Traffic plan- resources are invested in having individual meetings with new ning also helps to ensure that eco-fuels are used, encourages employees to discuss and gain their support for Nobina’s conservative driving and increases the number of passengers values and attitudes. in buses. Management continues to focus on efficient traffic planning during the life of the contract as the needs and travel The start-up process typically spans a period of nine to twelve patterns of the passengers change. Nobina maintains close months, with a central component being the planning phase to dialogue with its different business units via subsidiary execu- ensure that the correct number of buses are readily available tives, regional heads and local traffic supervisors. The Com- on the first day. If new buses are being manufactured, this is pany mainly uses two communication systems for traffic plan- done according to specifications and designs that are con- ning, OMS (Operational Management Systems) and Hastus. tained in the contract. Furthermore, the Company purchases, manages and sells its Efforts to optimise benefits for passengers, clients and other [,[Yb buses through the wholly-owned subsidiary, Nobina involved parties occurs continuously. An important factor of Fleet. Today, Nobina has a relatively young bus fleet of _.f contract profitability is whether the Company can successfully years on average, mainly due to the large proportion of new secure the one to two year contract extension, which allows contracts.

X) Based on the percentage of options exercised in each country in which the Group operates, weighted by the percentage of total Group revenue earned in that country.

46 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) BUSINESS DESCRIPTION

CLIENTS AND CONTRACT PORTFOLIO Clients e Company’s principal clients, also known as PTAs, credit rating for each of the Nordic countries is rated AAA for accounted for '(5 of net sales in FY%&/%$. As the clients are Sweden, Denmark and Norway, and AA+ for Finland, accord- publicly funded, the credit risk for Nobina is limited, while ing to S&P. non-cyclical spending provides an additional bene1t. e

FIGURE 8:4 EXAMPLES OF CLIENTS

The contract portfolio Nobina has a visible and diversi1ed revenue base with low dependency on any single contract. Revenues are generated primarily through long-term contracts, which typically have durations of 1ve to ten years with an extension option of one to two years, which may be exercised through mutual agreement between the PTA and the operator.

Key contract portfolio facts (FY14/15) t e Company has a total of %)$ contracts t Average contract length of -.$ years t Average contract age of &.$ years t In Nobina’s contracts that expired during the last three years, this option was exercised at a weighted average rate of *-5%) t e largest +$ contracts account for (%5 of net sales. +)

FIGURE 8:5 REVENUE CONTRACT CONCENTRATION AND REVENUE VISIBILITY Percentage of net sales excluding Swebus (FYXY/X_) * Contract backlog up to and including FY^a/^X (SEK bn) **

7% 7.9 7.7 7% 7% 7.0 6% 6.6 14% 17% 8% 10% 5.5 5% 19% 5.1 21% 10% 4% 10% 21% 21% 3% 79% 77% 2% 73% 69% 69% 68% 1% 0%

No. 1 No. 2 No. 3 No. 4 No. 5 No. 6 No. 7 No. 8 No. 9 No. 10 No. 11 No. 12 No. 13 No. 14 No. 15 No. 16 No. 17 No. 18 No. 19 20 No. No. 21 22 No. No. 23 24 No. No. 25 FY15/16 FY16/17 FY17/18 FY18/19 FY19/20 FY20/21

Production revenue Incentive revenue Indexation

* Individual PTAs may be the counterparty of several individual contracts. However, due to the long-term nature of the contracts and the fact that they run over different time periods, the Company does not consider itself dependent on any single PTA. ** Contract backlog is defined as total expected revenue up to and including FY^a/^X from signed contracts (both commenced and not yet commenced), excluding potential extension options and all revenue generated by Swebus. Expected indexation revenue is estimated on a contract by contract level based on actual historic levels and Com- pany expectations for future development. Expected incentive revenue from commenced contracts is estimated based on actual historic performance. Expected incentive revenue from not yet commenced contracts is based on the performance assumptions made in Nobina’s tender pricing for the relevant contract, following thorough pricing and risk analysis. The information on contract backlog constitutes forward-looking statements. Forward-looking statements are not guarantees of future financial perfor- mance and the Company’s actual future revenue could differ materially from that expressed or implied by such forward-looking statements as a result of many factors, including those described under “ Forward-looking statements and presentation of financial and other information—Forward-looking statements ” and “ Risk factors .”

%) Based on the percentage of options exercised in each country in which the Group operates, weighted by the percentage of total Group revenue earned in that country. +) Excluding Swebus.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 47 BUSINESS DESCRIPTION

Active contract management e graph below sets forth the margin pro1le of the Com- e key to Nobina’s success has been management’s ability to pany’s contracts relative to the Company’s internal return carefully balance each contract’s risk level with the calculated requirements for the periods indicated. e share of weaker return. In recent years, Nobina has improved its risk assess- margin contracts has decreased over the past three years. ment practice by increasing its workforce, continuing to devel- op its level of competence and systematically exchanging FIGURE 8:6 MARGIN PROFILE OF CONTRACT experiences with stakeholders. PORTFOLIO RELATIVE TO INTERNAL RETURN * Nobina is consciously increasing the percentage of incen- REQUIREMENTS tive contracts in its contract portfolio, which means both rela- tively greater risk and greater opportunities for higher returns. 21% 33% 29% In FY%&/%$, the share of production contracts made up around 4% 0% -&5 of Nobina’s public bus transport revenues, while contracts 0% including substantial incentive components (at least $5 of total contract revenue) made up the remaining +(5. See “ 71% 75% Risk 67% factors—Risks related to industry and the Group’s business—A trend towards the use of incentive contracts increases the Group’s exposure to certain risks ”. Contract management begins with a preparation phase FY12/13 FY13/14 FY14/15 where upcoming tenders are identi1ed, followed by client Stronger contracts discussions and promotion of Nobina’s capabilities. After win- Weaker contracts expired in FY14/15 ning the selected contracts, it is crucial for Nobina to success- Weaker contracts fully execute the tra8c plans. Tight cost control of personnel, fuel consumption, maintenance costs and damage cost is * Margin weighted based on contract revenue. Definitions according to manage- ment’s assessment of internal return requirements: Stronger contracts – In line closely managed. Management also continuously seeks to with or above Nobina’s internal return targets, Weaker contracts – Below Nobina’s replace low pro1tability contracts with higher return con- internal return targets, but above zero margin before central costs, with the exception of the Tromsö contract, which temporarily dropped below zero in tracts. FYXY/X_, Weaker contracts expired in FYXY/X_ – Below zero margin before central costs.

Figure *.- below shows Nobina’s renewal rate, which is de1ned as the number of buses secured under successful tender processes, divided by the number of buses included in Nobina’s contracts that were up for re-tender during the year, from FY)&/)$ to FY%&/%$.

FIGURE 8:7 CONTRACT WIN RATE Contract win rate based on the number of buses

248% 833 762 713 650 557 556 568 114% 97% 221 370 451 190

(180) (229) (390) (418) (496) (460) (573) (563) (584) (720) (892)

FY04/05 FY05/06 FY06/07 FY07/08 FY08/09 FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 FY14/15

Won contracts Exposed contracts Renewal rate (%) Avg. renewal rate (%)

48 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) BUSINESS DESCRIPTION

PLANNING EFFICIENCY AND FLEET MANAGEMENT Planning efficiency Nobina bene1ts from a high degree of planning e8ciency that ning in turn a#ects Nobina’s planning e8ciency. From has been rapidly improving over the past years. Planning FY)$/)( to FY%&/%$, planning e8ciency has grown from (-5 e8ciency is de1ned as the number of timetable hours (i.e., the to -+5. During the past 1ve years, the level has been stable at Company’s estimate of the number of hours compensated around -+5 which, according to management is currently under a contract) in the relevant client contract divided by re7ecting an optimal level of average e8ciency. e high the number of total hours worked. ere are 1ve key factors degree of planning e8ciency is reached by continuous optimi- a#ecting the Company’s tra8c planning including line net- sation of, for example, routes, maintenance, depot locations, work, timetable optimisation, bus route optimisation, driver bus driver schedules and bus utilisation. schedule optimisation and tra8c management. Tra8c plan-

FIGURE 8:8 PLANNING EFFICIENCY IMPROVEMENT Planning efficiency

72.2% 71.6%

70.0%

66.5%

FY05/06 FY08/09 FY11/12 FY14/15

Fleet management As a consequence of the above, as well as Nobina’s large and Fleet management is centralised under Nobina Fleet, which is centralised bus 7eet, Nobina has been able to reduce the num- responsible for purchasing, 1nancing, administering, deploy- ber of buses relative to revenue, which has had a direct e#ect ing and ultimately selling the Company’s approximately 0,0&- on the Company’s results of operation. e table below sets buses. It was created to e8ciently handle the various needs forth Nobina’s revenue per bus for the periods indicated. that arise from client requirements, contract changes, utilisa- tion of buses in daily operations and 1nancing solutions. FIGURE 8:9 REVENUE PER BUS e buses are leased by Nobina Fleet from external 1nanc- Revenue per bus (SEK million) ing companies which, in turn, lease the buses to Nobina’s operating companies. Nobina Fleet also leases a small number CAGR 6% 2.2 2.3 of buses to other external operators. Some clients in Sweden, 2.1 to a lesser extent, lease buses directly to operators, including Nobina Sweden. e Company derives multiple bene1ts from economies of scale by employing a centralised 7eet management concept, including: t leveraging surplus capacity, which can be released by the operating companies; t reducing new bus requirements by re-allocating buses FY11/12 FY10/11 FY12/13 FY13/14 FY14/15 FY09/10 FY07/08 FY06/07 among contracts and regions; FY08/09 t lower price can be o#ered in tendering as a result of re-allo- cating existing buses to new contracts; and t centralising purchasing to increase buying power due to large purchase volumes.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 49 BUSINESS DESCRIPTION

Although contracts typically do not extend longer than ten rate, for which the interest rate risk is, to a large extent, cov- years, the useful life of a bus is %& years, which is also the ered by indexation. Upon expiration of the contract, Nobina length of time upon which Nobina bases its internal leases. Fleet is obligated to assume ownership of the buses from the anks to its large scale, Nobina is able to re-allocate buses 1nancing company, which means that Nobina Fleet also internally, which is a key advantage when entering into new assumes the residual value risk. Nobina prefers this approach, contracts. In FY%&/%$, Nobina Fleet re-allocated approximately as used buses are needed to obtain an optimal mix of old and %$5 of its total bus 7eet. Nobina’s current bus 7eet is on aver- new buses in the bus 7eet and Nobina can take advantage of age $.* years old. its centralised 7eet system by reallocating buses internally e purchasing of buses is based on a LCC analysis, where between contracts, with the goal of fully utilising the life of its fuel consumption is the most important component. With the buses by matching it with the terms of the Company’s various Company’s evaluation model, it is possible to make a compre- contracts. hensive comparison between suppliers. e model calculates Today, Nobina rarely uses operating leases. ese leases the total cost based on the useful life of the bus (i.e. %& years), typically have a duration of 1ve years with an extension option rather than the price. e analysis includes the following of 1ve years. Upon expiration of the contract, Nobina Fleet parameters: may return the buses to the 1nancing company, who thereby assumes the residual value risk. Nobina considers operating price of the bus; t leases to be less favourable as the bus operator pays the 1nanc- fuel consumption; t ing company an extra fee for assuming the residual value risk, 1nancing options and cost; t and Nobina is not be able to bene1t from its large scale and warranties; and t re-allocation capabilities by utilising the buses internally post maintenance and spare parts cost. t expiration of the leases. For a more detailed description of the impact of 1nance leases and operating leases on Nobina’s Furthermore, the bus 7eet consists, to an increasingly large results of operations, see “ Operational and #nancial review— extent, of buses that run on renewable fuels, and management Key factors a&ecting Nobina’s results of operations—Centralised estimates that approximately one third of the Company’s +eet management and +eet #nancing .” current 7eet of buses are environmentally friendly. See table ere is also a small portion of buses that are owned by below for the di#erent types of Nobina’s buses. Nobina, typically representing old buses that were either FIGURE 8:10 BUS TYPES AND CURRENT FLEET owned from the outset or purchased at the end of the lease COMPOSITION term from the 1nance company.

FIGURE 8:11 FLEET FINANCING STRUCTURE Diesel bus X,f[Y Number of buses (aaa’s) Biodiesel bus _[X 3.5 3.4 3.3 Natural and biogas bus faX 15% 13% 11%

21% 15% Hybrid bus Z_ 23%

Ethanol bus bf 74% Electric bus f 62% 66%

FLEET FINANCING Nobina has moved towards a 1nance lease structure for its FY11/12 buses and has, since +))(, primarily used 1nance leases for FY10/11 FY12/13 FY13/14 FY14/15 FY09/10 FY07/08 FY06/07 obtaining new buses. Nobina believes that this is the most FY08/09 cost e8cient method of 1nancing, as it allows the Company Financial lease Operating lease Owned to avoid having to pay for buses in cash upfront, which would be equivalent to equity 1nancing. rough its 1nance leases, Nobina’s 7eet 1nancing activities can be divided into three Nobina 1nances the full value of new buses and does not categories, including: (i) direct 1nancing from bus manufac- make any initial down payments. After ten years, the lease turers; (ii) nominal value guarantees by bus manufacturers to contract has an average residual value of %)5. Upon expiration independent lease companies and banks; and (iii) independent of the contract, Nobina can either assume ownership of the lease companies and banks. Direct 1nancing from bus manu- buses from the 1nancing company, which results in an increase facturers is currently the most commonly used 1nancing of cash out7ow, or seek to re1nance the lease for an additional method for the Company. period of time. Financing costs are based on STIBOR, NIBOR, CIBOR or EURIBOR plus a margin at a variable

50 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) BUSINESS DESCRIPTION

ORGANISATION AND INTERNAL PROCESSES Management system Organisational overview e Nobina management system governs the Company’s Nobina’s current operational setup is highly scalable with operations. Process Owners are responsible for developing and %&% employees employed in central functions. e remaining implementing working methods while Managing Directors -,&(+ employees work in the line organisation. address improvement needs and allocate resources to the pro- cess teams. ese processes are systematically monitored to FIGURE 8:12 CENTRALISED INTEGRATED OPERATIONAL enable operational e8ciency. As an e#ort to ensure the highest MANAGEMENT quality of the management system, the Company has estab- lished several forums to track and review the operations including monthly reviews which entail a process progress review. CEO Nobina’s values are fully integrated in the core processes. e Company has nine policies approved by the executive board and an employee guide on critical activities, which includes approximately 0)) instructions. Central functions: XYX FTEs Employees In FY%&/%$, Nobina’s average number of full-time employees was -,()0. In all countries where Nobina has operations, collective agreements are applied in accordance with the trade Line organisation: b,Y`^ FTEs union that represents employees in the industry where each company is active. Between the employee representatives and the Company, there are well-established practices for how working hours, compensatory terms, information and cooper- ation are negotiated and applied. Nobina has installed pro- grammes focused on values and employee relations to boost the employees’ motivation at work and thus improve the As a result of current business operations, Nobina’s main quality of service to passengers. competitive advantages are its centralised bus 7eet, advanced tendering processes and centralised business development and IT systems.

FIGURE 8:13 EMPLOYEES

Group Group Group FYCA/CG FYCG/CD FYCD/CF Total number of employees translated to FTEs \,XTX \,WJ\ \,TZU Number of employees in Sweden translated to FTEs _,[b^ _,Y[Y _,_fZ Number of employees in Norway translated to FTEs X,XZ^ Z^b f^a Number of employees in Finland translated to FTEs ZYZ faY f[f Number of employees in Denmark translated to FTEs [__ [f^ [_`

Since +)%+, Nobina has been a8liated with the employee- bene1t for Nobina Norge AS and Nobina Europe AB, bene1ts representative channel, MOM, which serves as whistleblower are paid to former employees on the basis of 1nal salary and protection. MOM is set up in Norway, Finland and Sweden. years of service. e Company bears the risk of ensuring that Since +)%&, it has also existed in Denmark, providing employ- the contractual bene1ts are paid. ees with a safe channel for reporting any situations or activities For more information about pension obligations, see that they believe to be inappropriate. “ Operational and #nancial review—Liquidity and capital resources—Other #nancial obligations: pension obligations ”. Pension obligation e Company has both de1ned-contribution and de1ned- Sustainability bene1t pension plans. e pension liabilities pertain to Nobina actively works to identify and analyse the key aspects de1ned-bene1t pensions, calculated annually in accordance of its sustainability e#orts to better re7ect the economic, with IAS %' with assistance from an independent actuary. In environmental and social impact of its operations, along with the de1ned-contribution pension plans, Nobina pays a 1xed the issues that a#ect its stakeholders’ assessments and deci- contribution according to plan and has no further obligation sions. e analysis also provides the basis for which aspects to to pay post-employment contributions. Under the de1ned manage and communicate.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 51 BUSINESS DESCRIPTION

Nobina works closely with clients to implement environ- mentally-friendly initiatives. Top priorities include responsible consumption of resources and reduced emissions to lower the impact of daily operations. Furthermore, Nobina works to increase its overall environmental competency throughout the Company by training its personnel. For example, drivers are trained on eco-driving and informed on how energy, water, detergent and chemicals should be used in conjunction with service. Service sta# in tra8c areas are educated on quality, work environment and safety. In addition, there is a central competence forum responsible for preparing the organisation to comply with new rules and legislation. A portion of new tenders in southern Sweden and Norway include biogas fuel requirements, which are designed to reduce emission levels. Continuous reduction of carbon dioxide emissions currently occurs at the rate of new contracts replac- ing old ones. Nobina’s bus 7eet is steered in the direction of buses that run on renewable fuels. Further, Nobina is a pioneer with regard to customised electric buses. Its Hyrbricon Arctic Whisper is used on the route between Umeå and Umeå airport.

ISO-certified In Norway and Finland, Nobina has held ISO '))I quality certi1cation and ISO I&))I environmental certi1cation for several years. Since +))', e#orts have been underway in Sweden to obtain ISO certi1cation for all tra8c areas. At the end of FY%&/%$, nine of seventeen transport areas had become ISO-certi1ed. In Denmark, all four transport areas became certi1ed in +)%0 in accordance with ISO I&))I.

Safety and work environment By systematically assessing risk of the tra8c environment, Nobina can take preventive measures to minimise safety inci- dents. A holistic approach has been initiated on the issues of quality, work environment and safety. For example, Nobina continues to convey the issues to its work force as an e#ort to increase awareness in daily operations. Actual issues are fol- lowed-up monthly by all companies and tra8c areas within the Company via the KAMS council (quality and environ- mental managers).

52 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) SELECTED CONSOLIDATED HISTORICAL FINANCIAL AND OTHER INFORMATION

SELECTED CONSOLIDATED HISTORICAL FINANCIAL AND OTHER INFORMATION

"e selected consolidated historical #nancial data set forth below as of and for FY)//)1, FY)2/)/ and FY)3/)2 have been derived from Nobina’s audited consolidated #nancial statements, which have been prepared in accordance with IFRS as adopted by the EU. "e FY)//)1 #nancial statements have been audited by PwC, as set forth in their audit report included elsewhere herein. "e FY)2/)/ and FY)3/)2 #nancial statements have been audited by EY, the Company’s previous auditor, as set forth in their audit report included elsewhere herein. "e selected historical key performance indicators set forth below have been derived from Nobina’s regularly maintained records and account- ing and operating systems. See “Forward-looking statements and presentation of #nancial and other information— Presentation of #nancial and other information” for de#nitions and concepts of certain terms set out in the tables below. "e following information should be read in conjunction with “Operational and #nancial review” and “Financial statements”.

SELECTED CONSOLIDATED INCOME STATEMENT DATA For the financial year (SEK million) ABCD/ABCF ABCG/ABCD ABCA/ABCG

Net sales \,WJ] \,YT] \,YIY

Operating expenses Fuel, tyres and other consumables –X,`__ –X,`YY –X,ba^ Other external expenses –X,aZX –X,XaX –X,XbZ Personnel costs –[,ffX –[,`Z^ –[,`a` Capital losses from the disposal of non-current assets –[_ –X_ –X_ Depreciation/amortisation and impairment of PPE and intangible assets –_X` –YZX –Y`Y Operating profit/loss U\I UYT YJT

Profit from net financial items Financial income f Z Z Financial expense –^[f –^Yf –^`Y Net financial items –YUZ –YU] –YWW

Profit/loss before tax (EBT) IJI X\ –] Tax –Yb –[X `Z Profit/loss for the year ]J WT TZ

Earnings per share attributable to Parent Company shareholders, before dilution and the Reverse Share Split (SEK) a.X_ a.aZ a.^_ Earnings per share attributable to Parent Company shareholders, after dilution but before the Reverse Share Split (SEK) a.X_ a.aZ a.^_

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 53 SELECTED CONSOLIDATED HISTORICAL FINANCIAL AND OTHER INFORMATION

SELECTED CONSOLIDATED BALANCE SHEET DATA As of AI February (SEK million) ABCF ABCD ABCG

ASSETS Non-current assets Intangible assets Goodwill _ff _f_ _ZX Other intangible assets X` XZ ^X Total intangible assets TZJ TZJ TIY

Property, plant and equipment Costs for improvements on third-party properties ^X Xb ^X Equipment, tools, fixtures and fittings `X [^ _` Vehicles Y,[_Y [,Z_a Y,X`f Total property, plant and equipment J,JUT U,]]] J,YJW

Financial assets Total financial assets ff XXf X[Z Total non-current assets W,IYX J,\YI J,]]T

Current assets Trade receivables _XZ [b_ [`Z Other current assets Yb` _Xf _Ya Cash and cash equivalents Y_[ [aZ X[b Total current assets I,JJX I,YZY I,ZJT TOTAL ASSETS T,W\T W,]YU T,ZJY

SHAREHOLDERS’ EQUITY AND LIABILITIES Shareholders’ equity attributable to parent Company shareholders UIZ YYJ IX\

Non-current liabilities Borrowing [,b`_ [,Yf[ [,faa Other non-current liabilities X_b X[X X^^ Total non-current liabilities U,]YY U,TIJ U,]YY

Current liabilities Accounts payable Yb` Yba Y`_ Borrowing `[Y _`_ YZ` Other current liabilities XbY X__ X_[ Accrued expenses and deferred income X,a`a fZ_ fXZ Total current liabilities Y,UJJ Y,ZXW I,]UU Total liabilities T,YTT W,T]] W,XWW TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES T,W\T W,]YU T,ZJY

SELECTED CONSOLIDATED CASH FLOW STATEMENT DATA For the financial year (SEK million) ABCD/ABCF ABCG/ABCD ABCA/ABCG

Cash flow from operating activities Z`Y fZZ f`` Cash flow from investing activities –^X[ –XX –XXf Cash flow from financing activities –`Xa –bX_ –bX_ Cash flow for the year XYX Xb[ [[ Cash and cash equivalents at the beginning of the year UZ] IU\ IZ\ Cash and cash equivalents at the end of the year JWU UZ] IU\

54 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) SELECTED CONSOLIDATED HISTORICAL FINANCIAL AND OTHER INFORMATION

SELECTED KEY PERFORMANCE INDICATORS For the financial year (SEK million unless otherwise stated) ABCD/ABCF ABCG/ABCD ABCA/ABCG

EBITDA X), _) Z^^ f[^ b^_ EBITDA margin (%) ^) X^.^ XX.Y Xa.X EBITDAR [), _) X,aXZ Zb[ Z^b EBITDAR margin (%) Y) X[._ X[.Y X^.Z Equity free cash flow `) Xfa Xff bY Equity/assets ratio (%) Y.b [.f [.X Equity [Xa ^^Y Xfb Number of buses [,[Yb [,[_Z [,Y__ Net sales/bus ^.^` ^.X` ^.aZ Average number of employees b,`a[ b,_Yb b,f`f

X) The Company defines EBITDA as profit/loss for the year before net financial items, tax, depreciation/amortisation and impairment of PPE and intangible assets, capital losses from the disposal of non-current assets. ^) The Company defines EBITDA margin as EBIDTA in relation to net sales. [) The Company defines EBITDAR as profit/loss for the year before net financial items, tax, depreciation/amortisation and impairment of PPE and intangible assets and capital losses from the disposal of non-current assets and operating lease costs. Y) The Company defines margin as EBITDAR as a percentage of net sales. _) EBITDA and EBITDAR are non-IFRS measures and are not substitutes for any IFRS measure. Nobina uses these measures for many purposes in managing and directing the Company. The reconciliation of profit/loss for FYXY/X_, FYX[/XY and FYX^/X[ to EBITDA and EBITDAR is as follows:

For the financial year SEK million ABCD/ABCF ABCG/ABCD ABCA/ABCG

Profit/loss for the year ]J WT TZ Tax Yb [X -`Z Net financial items ^[a ^[Z ^__ Depreciation/amoritisation and impairment of PPE and intangible assets _X` YZX Y`Y Capital losses from the fisposal of non-current assets [_ X_ X_ EBITDA ]YY XUY \YW Operating lease costs Zb XYX ^a^ EBITDAR I,ZI] ]\U ]Y\

cont. next page

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 55 SELECTED CONSOLIDATED HISTORICAL FINANCIAL AND OTHER INFORMATION

`) The Company defines equity free cash flow as cash flow for the year before certain cash flow items from financing activities, certain cash flow items from operating activities and financial expense (from the income statement), all of which relate to the Company’s bond or incentive programme. The reconciliation of cash flow for the year for FYXY/X_, FYX[/XY and FYX^/X[ to equity free cash flow, EBITDA and EBITDAR is as follows: For the financial year (SEK million) ABCD/ABCF ABCG/ABCD ABCA/ABCG

Cash flow for the year IJI I\U UU Cash flow from financing activities New share issue – – –^ New issue of shares (to bond holders) – – –XfX Borrowing expenses Xf – [Y New borrowing, other external loans – – –__X New borrowing, including payment of old bonds (SEK `b million) –Yf[ – – New issue of shares to senior executive –X – – Amortisation of bond loan and other external loans Yf_ – b[[

Cash flow from operating activities Adjustments for non-cash items Other items –^` –_ –X_ Changes in provisions, pensions, etc XX Z f Financial expense (from cash flow statement) –^aZ –^[_ –^_Z Unrealised foreign exchange gains/losses ` –^ Xa

Financial expense (from income statement) ^[f ^Yf ^`Y Equity free cash flow IXZ IXX \J Cash taxes X – ^ Net financials (excluding financial leasing interest expense) a) `_ ba ba Change in restricted cash –YX –XY ^` Asset disposals –YX –XY –[_ Underlying cash flow X`Y ^[a X[b Lease payments b) `Za `YX `ab Underlying cash flow before lease payments f_Y fbX bYY Cash-financed capital expenditure c) X^b [Z X^b Debt-financed new vehicles c) –ZX[ –^_^ –X,X^Z New vehicle investments c) ZX[ ^_^ X,X^Z Change in net working capital –_Z –bf –XY` EBITDA ]YY XUY \YW Operating lease cost Zb XYX ^a^ EBITDAR I,ZI] ]\U ]Y\ a) Includes interest paid, received interest income less finance lease interest expense b) Includes amortisation of finance lease liability and finance lease interest expense c) The Company’s investments mainly relate to purchases of vehicles. New vehicles are principally financed with asset-backed debt financing, of which the vast majority under finance lease arrangements. The following table illustrates Nobina’s investments for the last three years and sources of financing:

For the financial year (SEK million unless otherwise stated) ABCD/ABCF ABCG/ABCD ABCA/ABCG

Uses Intangible assets W W IJ Cost for improvements on third-party properties Z X Xb Equipment, tools, fixtures and fittings Y` XX XZ Vehicles Zfa ^bY X,^a` Total tangible assets I,ZUW YXT I,YJY Total procurement of intangible and intangible assets I,ZJZ Y]I I,YWT

Sources New finance leases bY_ ^_^ X,X^Z Asset-backed financed vehicles X`f – – Debt-financed new vehicles ]IU YWY I,IY]

Cash-financed capital expenditure IY\ U] IY\ Cash-financed capital expenditure as a percentage of net sales (%) X,b a,_ X,f

Vehicles Zfa ^bY X,^a` Debt-financed new vehicles –ZX[ –^_^ –X,X^Z Net cash-financed vehicle capital expenditure T\ YY \\

56 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) OPERATIONAL AND FINANCIAL REVIEW

OPERATIONAL AND FINANCIAL REVIEW

"e following commentary should be read together with the “Selected consolidated historical #nancial and other information” and “Financial Statements”. Nobina’s audited consolidated #nancial statements for FY)//)1, FY)2/)/ and FY)3/)2 have been prepared in accordance with IFRS as adopted by the European Union. "is section may contain “ forward-looking statements.” Such statements are subject to risks, uncertainties and other factors, including those set forth under the heading “Risk factors,” which could cause our future results of oper- ations, #nancial position or cash +ows to di&er materially from the results of operations, #nancial position or cash +ows expressed or implied in such forward-looking statements. See “Forward-looking statements” for information on risks associated with reliance on forward-looking statements.

OVERVIEW in line with the Company’s clear focus on qualitative risk Nobina is the leading public bus transport operator in the assessment. All risks are 1rst quanti1ed before management Nordic region measured by revenue with an aggregated mar- centrally analyses and determines pricing strategy. Following ket share of %(5. %) e Company operates in Sweden, Norway, the award of a contract, the performance and pro1tability of Finland and Denmark. Nobina’s public bus transport services the contract is evaluated on a continuous basis by reference to accounted for '(5 of its net sales in FY%&/%$. e Company certain key performance indicators, for example, passenger also o#ers express bus services in Sweden through Swebus, satisfaction, completed routes as a percentage of planned which accounted for &5 of Nobina’s net sales in the same routes and tra8c e8ciency. Comparisons between calculated period. In FY%&/%$, Nobina generated net sales of SEK -,$&' and actual performance are tracked monthly and selective million and an EBITDA margin of %+.+5. Since FY)$/)(, the improvement measures are taken immediately if any devia- Company’s net sales have increased at a compound annual tions appear. KPIs are de1ned in each tender and are subse- growth rate of $.&5, while EBITDA increased from SEK –$* quently reviewed in the Company’s monthly contract review. million in FY)$/)( to SEK '++ million in FY%&/%$. Nobina Nobina has, over the last ten years, invested in its opera- had approximately -,()) full-time equivalent employees as of tional e8ciency. Planning e8ciency, which is de1ned as the +* February +)%$ and carried more than one million passen- number of timetable hours (i.e., the Company’s estimate of gers per day in FY%&/%$. As of +* February +)%$, the Company the number of hours compensated under a contract) in the had one of the largest bus 7eet in the Nordics, with 0,0&- buses relevant client contract divided by the number of total hours in operation. worked, increased from (-5 in FY)$/)( to -+5 in FY%%/%+, Nobina has a visible and diversi1ed revenue base with low largely driven by optimised routes, timetables and improved dependency on any single region or contract and a high credit depot locations. Since FY%)/%%, planning e8ciency has quality, publicly-funded, client base. Revenues are generated remained stable at around -+5, which the Company considers primarily through long-term contracts, which typically have to be the optimal level in the current contract portfolio. Sub- durations of 1ve to ten years and often include extension sequently, Nobina has focused on contract portfolio optimisa- options of one to two years, which may be exercised through tion. e shift towards higher pro1tability contracts is contin- mutual agreement between the PTA and the operator. In uing and existing contracts are proactively being re-evaluated Nobina’s contracts that expired during the last three years, to improve e8ciency and thus pro1tability while ensuring this option was exercised at a weighted average rate of *-5 %) . that clients’ needs are met. Since the mid-+)))s, Nobina has expanded its contract port- e Company purchases and manages buses through its folio and has been successful in winning new contracts: the wholly-owned subsidiary, Nobina Fleet. Nobina Fleet pur- number of buses secured under successful tender processes has chases buses based on an LCC analysis, of which fuel consump- exceeded the number of buses in Nobina contracts up for re- tion is the most important component. As a result of this cen- tender during the relevant year, by an average of %&5 per year. tralised structure, Nobina is able to reallocate buses internally In FY%&/%$, the Company won %0 of 0+ submitted bids. In addi- between di#erent contracts, both during the duration of the tion, Nobina has successfully focused on improving the pro1t- contract and at the end of the contract. In FY%&/%$, $&- buses ability of its contracts by optimising its contract portfolio mix were re-allocated. is 7exibility is enabled by the large scale and existing contracts. As of +* February +)%$, the Company of the 7eet, combined with Nobina’s competency and central- had %)$ contracts, with the +$ largest contracts representing ised focus. (%5 of net sales. 0) e Company is partly protected from input cost increases Nobina has strict internal return requirements when ten- by indexation clauses under its contracts in accordance with dering for new contracts, and upcoming tenders are evaluated industry norm, where Nobina, as the largest Nordic operator,

%) Based on the latest reported revenue, excluding long distance tra8c (i.e. express bus). +) Based on the percentage of options exercised in each country in which the Group operates, weighted by the percentage of total Group revenue earned in that country. 0) Excluding Swebus.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 57 OPERATIONAL AND FINANCIAL REVIEW

takes an active role in de1ning the industry practice. Manage- of net sales in FY%&/%$. In the ordinary course of its business, ment believes that the indexation formula typically employed, Nobina must, over time, identify and win a su8cient number su8ciently re7ects Nobina’s current cost structure. In addi- of contracts at the right price to maintain its operations. tion, the Company has a 7exible cost structure where major Contracts with PTAs are subject to a competitive tender pro- costs, e.g. employee agreements, maintenance contracts and cess and are generally for a 1xed-term with an option to service depots are matched with contract length. extend the contract by one or two years which may be exer- cised through mutual agreement between the PTA and the KEY FACTORS AFFECTING NOBINA’S RESULTS operator. In Nobina’s contracts that were up for re-tender dur- OF OPERATIONS ing the last three years, this option was exercised at a weighted Our results of operations have been, and may continue to be, average rate of *-5 %) . Applicable law requires that these 1xed- a#ected by certain key factors, including, in particular, our term public tender contracts are re-tendered at the end of their ability to win public tender contracts from PTAs over time, respective terms. Between FY)&/)$ and FY%&/%$, Nobina’s our ability to identify attractive contracts and actively opti- average annual net win rate was %%&5 (de1ned as the number mise the contract portfolio, the e#ect of contract migration, of buses secured under successful tender processes, divided by our ability to estimate and manage risks and costs associated the number of buses included in Nobina’s contracts that were with the contracts and seasonality. Each of these factors is up for re-tender). In FY%&/%$, the Company’s contract net win discussed in more detail below. rate for the year amounted to +&*5. Contract wins in FY%&/%$ included the contract for public bus transport services in the Ability to win public tender contracts from PTAs Tyresö, Haninge and Nynäshamn municipalities in Stock- over time holm, which is Nobina’s largest contract to date with a con- A key driver of Nobina’s business has historically been its tract value of SEK $ billion, and the contract for Varmland, ability to win public tender contracts over time. Nobina’s pub- Sweden, with a contract value of SEK & billion. e graph lic bus transport clients consist almost exclusively of PTAs, below sets forth Nobina’s annual net win rate based on the and the Company’s contracts with PTAs accounted for '(5 number of buses for the periods indicated.

FIGURE 10:1 CONTRACT WIN RATE Contract renewal rate based on the number of buses

248% 833 762 713 650 557 556 568 114% 97% 221 370 451 190

(180) (229) (390) (418) (496) (460) (573) (563) (584) (720) (892)

FY04/05 FY05/06 FY06/07 FY07/08 FY08/09 FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 FY14/15

Won contracts Exposed contracts Renewal rate (%) Avg. renewal rate (%)

In FY%&/%$, FY%0/%& and FY%+/%0, Nobina won &'5, $05 and win new tra4c contracts over time and to secure extension options +-5, respectively, of the tendered buses included in tenders in under its existing contracts with public transport authorities .” In which Nobina submitted a bid. Based on Nobina’s long histo- addition, the Company has a diverse contract portfolio with ry of working with PTAs throughout the Nordics and its his- low dependency on individual contracts. In FY%&/%$, the +$ torical success in winning tender processes, Nobina believes largest contracts accounted for (%5 of net sales (excluding net that it is well positioned to continue to win contracts. See sales from Swebus). e following graph illustrates the Com- “Risk factors—Risks related to Nobina—Risks related to the pany’s low dependency on individual contracts in its contract industry and business—"e Group’s prospects and future #nan- portfolio. cial and operational performance are dependent on its ability to

%) Based on the percentage of options exercised in each country in which the Group operates, weighted by the percentage of total Group revenue earned in that country.

58 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) OPERATIONAL AND FINANCIAL REVIEW

FIGURE 10:2 CONTRACT DEPENDENCY * regulatory developments, that the level of tender opportuni- Percentage of net sales per contract excluding Swebus (FYXY/X_) ties will increase further in the future. See “ Market overview ”. e Company further believes that it is well equipped to han- 7% dle the complex tendering process and assess costs and that it 6% is therefore well placed to bene1t from this expected increase 5% in tenders. See “ —Ability to estimate and manage risks and costs 4% associated with the contracts .” Based on currently announced 3% tender processes, the Company expects a total of +,'$( buses 2% to be tendered during FY%$/%(. e graph below sets forth the 1% numbers of buses included in announced tender processes 0% between FY))/)% and FY%&/%$, as well as the number of buses that Nobina expects to be announced in FY%$/%(. No. 1 No. 2 No. 3 No. 4 No. 5 No. 6 No. 7 No. 8 No. 9 No. 10 No. 11 No. 12 No. 13 No. 14 No. 15 No. 16 No. 17 No. 18 No. 19 20 No. No. 21 22 No. No. 23 24 No. No. 25 FIGURE 10:3 NUMBER OF BUSES ANNOUNCED * Individual PTAs may be the counterparty of several individual contracts. IN TENDERS However, due to the long-term nature of the contracts and the fact that they run * over different time periods, the Company does not consider itself dependent on Total number of advertised buses any single PTA. 3,034 3,002 2,956 2,682 2,483 e long-term nature of Nobina’s contract portfolio, the 2,030 2,039 2,053 structure of the PTA contracts and Nobina’s ability to win 1,673 1,290 1,285 new contracts provide for high annual revenue visibility and 1,024 stable earnings. As of +* February +)%$, the original contract term of Nobina’s current contract portfolio was -.$ years on average and the average contract age as of the same date was &.$ years. For more information about the revenue visibility FY11/12 FY10/11 FY12/13 Outlook FY15/16 FY13/14 of Nobina’s contracts, see “ Business description—Clients and FY14/15 FY09/10 FY07/08 FY06/07 FY05/06 FY08/09 contract portfolio .” FY04/05 PTAs as counterparties, in their capacity as publicly-funded * entities, are characterised by strong credit quality and by a ^aaY–^aa` excludes Denmark. propensity for making timely payments of their contractual obligations. In addition, the portion of Nobina’s revenue that Ability to identify attractive contracts and actively is characterised by a high level of predictability has bene1ted optimise the contract portfolio from indexation provisions in the Company’s contracts, which e Company has historically been able to secure and main- are intended to compensate for increases in and in7ation of tain a portfolio of pro1table contracts by proactively identify- the Company’s costs. For further information on revenue and ing attractive tenders, maintaining a disciplined tendering pro1tability stability, which is largely due to the Company’s approach and focusing on active tendering and contract opti- ability to estimate and manage risks and costs associated with misation. e Company maintains close dialogue with PTAs its contracts, see “ —Ability to estimate and manage risks and in the Nordics to identify upcoming tender contract opportu- costs associated with the contracts .” nities and determine whether or not the opportunities are e tender process for new contracts granted by PTAs is appropriate for Nobina’s business and 1t with its existing dependent, among other things, on political conditions and contract portfolio and bus 7eet. For more information about local and national concerns regarding the outsourcing of Nobina’s tender approach, including prospecting, in7uencing activities to private sector companies. Changes in the political and selecting tender processes, see “ Business description— climate and popular mood in the markets in which Nobina Business model .” Maintaining a disciplined tendering approach operates can have a signi1cant e#ect on the Company’s ability is essential to generate pro1tability, particularly given the to win tenders. See also “ Risk factors— Risks related to Nobina long-term nature of the PTA contracts. Nobina selectively —Risks related to the industry and business—"e Group’s pros- bids only for contract opportunities that it considers attractive pects and future #nancial and operational performance are from a risk and reward perspective and it applies strict return dependent on its ability to win new tra4c contracts over time and requirements to all tenders. In addition, Nobina works active- to secure extension options under its existing contracts with public ly to optimise its existing contract portfolio by choosing not to transport authorities .” e market has historically provided renew expiring contracts that do not meet its current internal stable and large volumes of contract opportunities. e Com- return requirements. pany believes, based on general market trends and recent EU

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 59 OPERATIONAL AND FINANCIAL REVIEW

Nobina’s work with public-sector clients subjects the kilometres driven) with incentive-based compensation models Company to various risks inherent in government contracts, and/or incentive contracts (i.e., contracts in which compensa- which are based on commercial terms, or concluded in a con- tion is partly or entirely linked to a variable component, such tracting environment, that may be di#erent from the terms or as number of passengers or certain qualitative measurements, contracting environment that may prevail in commercial for example, timetable punctuality or amount of cancelled arrangements with private entities. Terms and conditions of journeys). Incentive contracts, including both production and public contracts tend to be more onerous and more di8cult to incentive components, are more commonly deployed by PTAs negotiate than those in commercial contracts. e Company in Sweden, while such contracts thus far are less prevalent typically enters into 1ve to ten year contracts with PTAs among PTAs in the other Nordic countries. For example, the where the pricing terms, cost indices and scope of operations new contract for Tyresö, Haninge and Nynäshamn munici- are determined by the PTA at the commencement of the con- palities in Stockholm that commences in June +)%$, is a pure tract. Following the award of a contract, the Company must incentive contract with revenue based solely on the number of perform the contract as tendered, even if unpro1table, and paying passengers. In FY%&/%$, the share of production con- there is generally no, or only very limited, scope to renegotiate tracts made up around -&5 of Nobina’s public bus transport the terms of the contract. In cases where the Company con- revenues, while contracts including substantial incentive com- cludes that a contract is loss-making (i.e., the contractual ponents (at least $5 of total contract revenue) made up the income is not su8cient to cover the direct and apportionable remaining +(5. expenses for ful1lment of the contractual obligations) and is Incentive contracts have made it more di8cult to evaluate deemed to remain so for the remainder of the contract term PTA contracts as the variable component increases the uncer- (typically as a result of the contract not re7ecting the opera- tainty and thus the risk associated with the contract. Conse- tional reality, as opposed to having potential for improved quently, such contracts place a larger burden on the bidder to operational e8ciency), then Nobina makes negative provi- calculate a bid and correctly assess the pro1t potential of the sions to cover for losses expected during the remainder of the contract. In this landscape, Nobina maintains a prudent contract term. e total amount of the negative provision is approach when evaluating various incentive components, recorded as an expense on the income statement and a corre- including by assuming, for pricing purposes, that the number sponding liability is recorded on the balance sheet. e provi- of passengers will not increase, and avoiding tenders that place sion recorded on the balance sheet is thereafter gradually very high emphasis on incentive components that the Com- dissolved and brought back to the income statement to cover pany believes to be uncertain. rough this disciplined losses during the remainder of the contract term. However, approach, the Company believes that it is able to mitigate risk such loss-making contracts will still have a negative impact on in its contracts and that there is potential for further revenue the Company’s cash 7ow. e provision is reviewed annually and margin upside as the proportion of incentive and hybrid and, if necessary, adjusted to re7ect changes in expectations. contracts in its portfolio increases. Contract optimisation, During the periods under review, the Company has not made together with close operational control, have been key contrib- any negative provisions for loss-making contracts. As of +* utors to Nobina’s positive revenue and margin development, February +)%$, +)%& and +)%0, provisions from loss-making see “ —Ability to estimate and manage risks and costs associated contracts (residual provisions attributable to previous periods) with the contracts .” amounted to SEK ) million, SEK % million and SEK * million. In order to ensure and maintain contract pro1tability The effect of contract migration throughout the contract term, it is essential to e8ciently exe- e cash 7ow pro1le and pro1tability margin associated with cute existing contractual obligations and respond to any a contract are typically closely linked to the age of the con- requests from PTAs for variations to existing contract terms, tract. Public bus transport operators are typically required to for example, requests for increased bus tra8c, new or revised make signi1cant investments, for example, in acquiring new bus routes or additional bus stops. Certain changes are typi- buses, during the initial contract migration phase of a contract cally permitted under the existing contract if within a pre- term in order to be in a position to ful1l the contractual obli- agreed range, but if the requested changes exceed this agreed gations. In addition, it is di8cult to run bus transport opera- scope, then additional negotiations may be commenced and tions at full e8ciency from day one of a new contract as it new tra8c outside of the pre-agreed scope has a positive e#ect takes time for a new operator to design an e8cient travel plan on net sales. Nobina actively responds to such requests with and determine the most e8cient use of drivers and buses. counter-proposals and practical ideas from an operator’s point Consequently, cash 7ow and pro1tability under the Company’s of view, with the aim of creating mutual bene1ts for both contracts typically improve throughout the life of the contract parties, as well as optimising the tra8c for its passengers. as the need for cash investment decreases. e 1nal years of a In recent years, Nobina has experienced an increase in contract, particularly the years when contracts are extended PTAs supplementing pure production contracts (i.e., contracts past their original term, therefore generate additional positive in which operators are paid a 1xed compensation for running cash 7ow and increase the Company’s 1nancial return. e a given network and timetable, such compensation being graph below illustrates the revenue, cash 7ow and margin based on the number of buses deployed, hours worked and/or pro1le of a typical contract.

60 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) OPERATIONAL AND FINANCIAL REVIEW

FIGURE 10:4 ILLUSTRATION OF TYPICAL MARGIN AND CASH FLOW RELATIVE TO CONTRACT AGE Example of typical b-year contract with a ^-year extension

+

By using financial leases, cash flow remains positive Current throughout the avg. contract contract period age: 4.5 years

0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9

Significant large initial cash flow outflow if applying equity financing of new buses

– EBITDA Acc. Cash Flow (Cash) Acc. Cash Flow (Leasing) Revenue

is cash 7ow and pro1tability pattern signi1cantly in7uenc- FIGURE 10:5 HISTORIC CONTRACT MIGRATION es the Company’s focus on contract optimisation. If a number of older contracts expire, and the Company commences a For the financial year ABCD/ABCF number of new contracts during the same period (i.e., the Number of Number of average age of the Company’s contract portfolio decreases), buses in buses in commenced expired then the Company’s margins would typically decrease, its contracts contracts cash consumption would typically increase and its 1xed assets would typically expand. is, in turn, could have an adverse Sweden Y^[ _af e#ect on the Company’s results of operations and 1nancial Finland – fY condition. In addition, given the positive cash 7ow and pro1t Norway ^a ^ margin typically generated during contract extension periods, Denmark ZZ __ to the extent that contracts are not extended, this would typi- Total WJY TJ] cally have an adverse e#ect on the Group’s pro1tability. e table below sets forth Nobina’s contract migration for FY%&/%$.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 61 OPERATIONAL AND FINANCIAL REVIEW

e table below sets forth Nobina’s expected contract migra- tracts will mature and increasingly contribute with positive tion for FY%$/%( based on new contracts entered into as of the cash 7ow and pro1tability. Overall, the Company believes date hereof and starting up during the coming year, and con- that the expected contract migration for FY%$/%( will result in tracts expiring during the coming year. Due to its contract signi1cantly increased net sales, while operating pro1t and portfolio, Nobina believes that it is well-positioned to absorb cash 7ow will also increase, although not at the same rate as the expected in7ow of new contracts, as existing large con- net sales due to the contract migration factors discussed above.

FIGURE 10:6 EXPECTED CONTRACT MIGRATION

Number of Number of buses required new buses to Traffic starts under Contract pursuant to the be obtained to new contracts PTA term (years) Traffic starts contract service contract

Sweden Storstockholms lokaltrafik (SL) f June ^aX_ ^`X X^_ LT Örebro b August ^aX_ ^Y ^^ Värmlandstrafiken Xa December ^aX_ Xa_ ^Z Värmlandstrafiken Xa December ^aX_ XYZ X`a Skånetrafiken b December ^aX_ Y a Finland HSL ^ August ^aX_ `` ^a HSL b August ^aX_ ^f ^X HSL b August ^aX_ _ _ HSL b January ^aX` [ [ Norway Ruter f June ^aX_ `^ `Z Ruter _ June ^aX_ XY a Total \YI JWJ

Expiring contracts PTA Traffic ends Number of buses

Sweden Storstockholms lokaltrafik (SL) June ^aX_ Z_ LT Örebro August ^aX_ ^[ Värmlandstrafiken December ^aX_ ZZ Skånetrafiken December ^aX_ b LT Västerbotten December ^aX_ ^ Finland HSL August ^aX_ [[ Norway Ruter June ^aX_ ^` Ruter June ^aX_ ^^ Total UZ\

In order to reduce the signi1cant cash out7ows that are typi- of assumptions about the future costs of operating the con- cally required in the initial contract migration phase, Nobina tract in accordance with the contract speci1cations in a way has moved towards a 1nance lease structure for its buses. For that enables the contract to meet Nobina’s internal return more details on the Company’s 7eet 1nancing structure, see requirements. ese cost assumptions include, but are not “—Ability to estimate and manage risks and costs associated with limited to, tra8c planning and bus allocation, lease payments the contracts” and “Centralised +eet management and +eet #nanc- for depots and parking lots, fuel costs, personnel costs and ing .” management expenses relating to operating a PTA contract. If such assumptions turn out to be inaccurate, a bus operator Ability to estimate and manage risks and costs may win contracts with low pro1t margins or contracts that associated with the contracts must be operated at a loss and such contracts may be unpro1t- e ability to correctly estimate and manage the risks, costs able for a limited period of time or for the life of the contract. and e8ciency potential associated with a relevant contract is See “ Risk factors—Risks related to Nobina—Risks related to the fundamentally important and directly impacts contract prof- industry and business—"e Group depends on its ability to accu- itability and the Company’s ability to meet its internal return rately price contracts and identify risks and it may be adversely requirement, particularly given the long-term nature of the a&ected by long-term contracts won on the basis of inaccurate PTA contracts and the fact that there is generally no or limited price and risk assumptions .” e chart below sets forth certain scope to renegotiate the terms of such contracts once they are factors that typically impact contract pro1tability, Nobina’s in place. In order to bid on a PTA contract, the Company estimation of typical probability and the measures taken by must determine the price at which it is prepared to enter into Nobina to manage these factors. the contract. Determining the price requires it to make a series

62 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) OPERATIONAL AND FINANCIAL REVIEW

FIGURE 10:7 RISKS IMPACTING CONTRACT FIGURE 10:8 REVENUE AND MARGIN DEVELOPMENT * PROFITABILITY Strong turnover and margin development

Risk area Mitigating factor YoY revenue growth

PTA changes the NJ ‚“†‡–‚‚š”Š”‡„•“‚„•Ʋ conditions renegotiate contract terms 2% 1% 4% 7,549 7,212 7,269

NJ ‡‡†„•–•„Ž†—Š‚Š•†“‚‡˜Ʒ Operational up on several levels, continuous performance refinement of processes 13% 13% 13%

12% 11% NJ  “–‘ † Š„‚•† •‡˜Ʒ–‘‚  10% Incorrect assumption analysis, lessons learned applied to future tender processes 725 832 922

FY12/13 FY13/14 FY14/15

NJ “†‘‚“† †””Ʋˆ–Š †Š†”‡“ External factors EBITDA (SEKm) EBITDA margin (%) incidents, practice with scenarios Revenue (SEKm) EBITDAR margin (%)

* EBITDA and EBITDAR are non-IFRS measures and are not substitutes for any rough its extensive experience of working under tender IFRS measure. Nobina uses these measures for many purposes in managing and contracts, Nobina has achieved a level of operational control directing the Company. For a reconciliation of EBITDA and EBITDAR to profit/loss that the Company believes allows it to estimate and manage for the period, see “ Selected consolidated historical financial and other informa- tion—Selected key performance indicators .” the various risks and costs associated with PTA contracts. e main factors in enabling this ability are revenue indexation, centralised 7eet management and 7eet 1nancing and opera- Revenue indexation to cover cost increases tional e8ciency. Together with contract optimisation, these Given the long-term nature of PTA contracts, it is essential to factors have been key contributors to Nobina’s positive reve- manage cost increases over the terms of the contracts. Histori- nue and margin development. Since FY)$/)(, the Company’s cally, the impact of cost increases has been mitigated by cost net sales have increased at a compound annual growth rate of indexation provisions in the Company’s PTA contracts. e $.&5, while EBITDA has increased from SEK -$* million in contractual fee amount that the Company receives is adjusted FY)$/)( to SEK '++ million in FY%&/%$. e graph below sets periodically based on several price indices that are intended to forth Nobina’s revenue, EBITDA, EBITDA margin, EBIT- compensate for increases in and in7ation of the Company’s DAR margin and period on period percentage of revenue costs during the term of the speci1c PTA contract. With change for the periods indicated. respect to the Company’s income statement, net sales for the period increase in line with index adjustments, while the Company’s operating results for the period will be neutral as long as there is a complete match between the Company’s increased costs and the index adjustments. Index provisions work both ways and adjust downwards in cases of cost decreases, as has been the case with fuel and interest rates in recent periods. e price indices used are based on labour costs, fuel costs, consumer price indices (“ CPIs ”) (typically including interest rate 7uctuations) and other items. Evaluat- ing the adequacy of price indices included in the proposed tender terms is an essential part of the risk assessment and ten- der pricing process. Nobina regularly evaluates the relevance and adequacy of underlying indices and actively engages in index discussions with PTAs, and the Company has on numerous occasions managed to eliminate structural incon- sistencies in this regard. In addition, historically some PTA’s have not provided %))5 index coverage under their proposed tender terms, which is important to take into account when pricing the tender bid. e graph below sets forth the portion of Nobina’s cost structure for FY%&/%$ that is covered by index- ation. e column re7ecting Nobina’s index re7ects the Company’s accumulated index coverage for all contracts.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 63 OPERATIONAL AND FINANCIAL REVIEW

FIGURE 10:9 INDEXATION OF COST STRUCTURE importance of Nobina’s focus on evaluating the relevance and adequacy of underlying indices. Should price indices in cur- 2.9% rent or future PTA contracts fail to re7ect Nobina’s actual cost structures, changes in the Company’s costs that are not 28.2% 31.1% re7ected in the price indices could have an adverse e#ect on

15.3% 15.4% Nobina’s results of operations.

Centralised fleet management and fleet financing 53.6% 53.5% Nobina’s competitiveness and ability to win PTA contracts is closely linked to the size and e8cient management of its 7eet of buses and the e8cient operation of its existing PTA con- Cost structure for Nobina Index tracts. Nobina’s 7eet management is centralised under Nobina Labour Diesel CPI and other No index Fleet, which is responsible for the purchase, 1nancing, admin- istration, utilisation and sale of the Company’s 0,0&- buses as of +* February +)%$. All buses are leased by Nobina Fleet to While increases in labour, fuel and other costs are generally the operating companies in the various markets under a rental covered by indexation and cost-adjustment provisions in agreement on an arm’s length basis via the Nobina Fleet enti- Nobina’s contracts, there can be no assurances that such ties in each country. e rental fee is calculated to cover exter- indexation/adjustment provisions will adequately cover future nal costs with a risk premium to cover costs for redundant cost increases. While the Company proactively seeks to man- buses and 7eet management administration costs. See “ Risk age its labour and fuel costs by actively planning and optimis- factors—Legal and tax risks—A loss of a tax dispute or a success- ing utilisation of employees and buses, Nobina may incur ful tax challenge to the Group’s operating structure or to the costs that it is unable to recoup. See “ Risk factors—Risks related Group’s tax payments could result in a higher tax rate on the to the industry and the Group’s business—Revenue indexation Group’s earnings. "e Group is also subject to possible retroactive provisions in PTA contracts may not fully compensate the Group adjustments to its previously assessed taxation .” As part of the for cost variations .” e Company’s operations are labour centralised 7eet management, buses are regularly reallocated intensive and are a#ected by the development of wages and between contracts and regions to optimise use where they are salaries, regulations on working hours, social security contri- most bene1cial and to satisfy varying demands as they occur butions and the range of bene1ts available to the Company’s under the PTA contracts, including upon clients’ requests for employees. In addition, Nobina also incurs signi1cant fuel changes during the duration of the contract, which is a key costs, for which prices 7uctuate signi1cantly. e index advantage when entering into new contracts. Between *–%$5 weighting in the Company’s contract portfolio may deviate of Nobina’s bus 7eet (depending on the number of surplus from its actual cost structure, so that indexation adjustments buses being released from expiring contracts from time to do not fully compensate the Company’s cost variations. time) are regularly reallocated from one contract to another. Depending on the contract, index adjustments typically occur e ability to reallocate buses between contracts and to max- on a monthly, quarterly, semi-annual or annual basis and are imise utilisation of idle buses is a key tool in Nobina’s contract generally applicable to the future contract period, and not optimisation work as it enables the Company to fully utilise applied retroactively to the contract period prior to such the accounting lives of the buses and optimise the age of buses adjustments. As a result, there is generally a time lag between to match them with the terms of the Company’s various con- changes in the Company’s costs and the index adjustment and tracts. For a more detailed description of the structure of the Company may therefore be undercompensated or over- Nobina’s 7eet management, see “ Business description—Plan- compensated for a period of time before the index adjustment ning e4ciency and +eet management—Fleet management .” takes e#ect. Fee adjustments are not intended to reimburse the e centralised structure and large scale bene1ts have had bus transport provider in full, but to adjust the fees paid to the several positive e#ects on Nobina’s operations, such as the transport provider going forward and, as a result, price indices release of surplus capacity, a reduced need for new buses and by their nature may never provide for full, timely compensa- increased negotiating power when purchasing new buses, tion of actual costs and cost increases. Furthermore, Nobina’s which have enabled Nobina to reduce the capital deployed in actual individual expenses may deviate from the macroeco- its operations and optimise the Company’s cost structure. is nomic factors that the price indices reference when adjusting is particularly important when obtaining buses under 1nance fees. For example, over some past 1nancial years, the salaries leases, as Nobina assumes the residual value risk of these buses of the Company’s drivers in certain jurisdictions have been and, should the average age of Nobina’s contract portfolio increasing more than the market-related index. Part of the rea- decrease substantially, this would make it more challenging son for this discrepancy is that the salary indicators used by for Nobina to generate these positive e#ects from its central- many of the indices in the contracts include truck drivers and ised structure and large 7eet. As a result of Nobina’s large bus train drivers. Moreover, there have historically been examples 7eet and the increased 7exibility and e8ciency achieved due of mismatch between the costs that an underlying index is to the centralised structure, Nobina has been able to push aimed to address and the costs incurred pursuant to a PTA prices under its PTA contracts and been able to bid, win and contract, for example, such that the index set forth in the PTA generate pro1t from certain contracts in a way that it would contract tracks diesel prices while the relevant contract otherwise not have been able to. In addition, Nobina has been requires buses to run on biogas. Such mismatch highlights the

64 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) OPERATIONAL AND FINANCIAL REVIEW

able to reduce the number of buses relative to revenue, which FIGURE 10:12 SHARE OF FINANCING CATEGORY has had a direct e#ect on the Company’s results of operation. e graph below sets forth Nobina’s revenue per bus for the periods indicated. Bus manufacturers, 73% Lease companies with residual FIGURE 10:10 REVENUE PER BUS value guarantees from bus manufacturers, 22% Revenue per bus (SEK million) Independent lease companies, 5% 2.3 2.2 2.1

rough this asset-backed 1nancing model, the Company is able to obtain buses on 7exible and competitive terms. Since +))-, Nobina has invested between SEK 0)) million and SEK %.+ billion annually in new buses, with the level of investment to a large extent depending on the current contract renewal FY12/13 FY13/14 FY14/15 rate, but also in7uenced by continuous operational improve- ments and increased e8ciency. e table below sets forth the annual bus investments during the periods under review. Nobina has moved towards a 1nance lease structure for its FIGURE 10:13 BUS INVESTMENTS buses and has, since +))(, primarily used 1nance leases for obtaining new buses. As discussed under “ —"e e&ect of con- tract migration ”, by using 1nance leases instead of equity For the financial year 1nancing, cash 7ow can remain positive throughout the entire (SEK in millions) ABCD/ABCF ABCG/ABCD ABCA/ABCG contract period. e graph below provides an overview of the Total bus investments –]XZ –Y\J –I,YZT development of the Company’s 7eet 1nancing structure. Finance leases –bY_ –^_^ –X,X^Z Loan financing –X`f – – FIGURE 10:11 FLEET FINANCING STRUCTURE * Cash-financed bus capital Number of buses (aaa’s) expenditure –`b –^^ –bb

3.5 3.4 3.3 e duration of Nobina’s 1nance leases is typically ten years. 15% 13% 11% After ten years, the lease contract has an average residual value 15% 23% 21% of %)5. Upon expiration of the contract, Nobina can either assume ownership of the buses from the 1nancing company, which results in an increase of cash out7ow, or seek to re1- 74% 62% 66% nance the lease for an additional period of time. Financing costs are based on STIBOR, NIBOR, CIBOR or EURIBOR plus a margin at a variable rate, for which the interest rate risk FY12/13 FY13/14 FY14/15 to a large extent is covered by indexation. When purchasing a

Financial lease Operating lease Owned new bus, Nobina evaluates the prospective investment based on an LCC analysis. e LCC analysis takes into account all costs incurred during the life cycle of a bus, including pur- For an overview of Nobina’s 7eet 1nancing structure over a chase price, fuel consumption (the most signi1cant compo- longer period of time, see ” Business description ” 1gure *:%%. nent of the analysis), maintenance and spare parts, warranties Nobina primarily enters into 1nance leases directly with and 1nancing terms. is approach enables the Company to 1nance companies of the bus manufacturers, with other exter- evaluate di#erent suppliers and brands based on fully compa- nal 1nance companies or with banks. In some cases where rable and transparent parameters. e Company’s annual PTAs require the use of a speci1c bus type that is more expen- reinvestment need in light of the expected life cycle of its cur- sive and has a higher residual value than other bus types and rent 7eet is approximately %/%& of the entire bus 7eet at any which Nobina therefore believes is not bene1cial to handle given time, corresponding to a long-term investment (over a within its standard 7eet management procedures, then Nobina re1nancing cycle of %& years) of approximately SEK &))–$)) requires that the PTA provides a residual value-guarantee. e million annually. Since the average actual age of Nobina’s 7eet graph below sets forth the share of each 1nancing category. is lower than the average age “implied” by applying a %& year depreciation cycle (the actual age of Nobina’s current bus 7eet is $.* years old on average compared to its “implied” average age of seven years), the Company’s reinvestment need in the coming years is expected to be lower than the average rate (assuming a future contract win rate in line with historic expe- rience) and already assumed investments are related to new contracts. Should the Company increase its portfolio of PTA contracts, it would likely need to lease additional buses at the

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 65 OPERATIONAL AND FINANCIAL REVIEW

commencement of the contract to service additional routes In +)%0, the International Accounting Standards Board and, consequently, further reduce the average age of the Com- (“ IASB ”) issued a revised exposure draft outlining proposed pany’s 7eet below the “implied” average age of seven years. changes to current lease accounting of operating leases. e As described in more detail below, additional buses obtained proposed changes, if ultimately adopted in their current form, under 1nance leases would expand the Company’s balance could result in signi1cant changes to current accounting, sheet and reduce pro1tability. including the capitalisation of operating leases on the balance sheet that are currently recorded o# balance sheet. Such Finance leases changes could adversely impact the balance sheet of operators As a result of the Company’s use of 1nance leases, Nobina that, to a large extent, are using operating leases and could maintains a high level of leverage. Under the 1nance leases, therefore impact such operators’ ability to raise 1nancing from Nobina (as the lessee) is entitled to most of the bene1ts and is banks or other sources. For Nobina, implementation of the liable for most of the risks associated with ownership of the proposed rules would have only a minor impact due to the leased buses. Consequently, in accordance with applicable limited volume of operating leases. accounting rules, these buses are designated as being econom- For more information about the Company’s 1nance leases ically owned by Nobina and recorded on the Company’s and operating leases, see Note ( to Nobina’s audited consoli- balance sheet as a leased asset together with a corresponding dated 1nancial statements as of and for the years ended +* liability. Lease payments consist of an interest component and February +)%0, +)%& and +)%$ included elsewhere in this an amortisation component. Interest payments are recognised Prospectus. as 1nance expenses on the income statement and amortisa- tions result in a reduction in the liability on the balance sheet. Financing of buses in Denmark Nobina’s buses are depreciated over %& years, which is re7ected Due to the fact that public bus transport services in Denmark on the asset side of the balance sheet. Upon expiration of the are VAT exempt, the Danish tax authority does not recognise lease contract, Nobina is obligated to assume ownership of the the concept of 1nance leases. In order to 1nance new buses on buses from the 1nancing company, which means that Nobina terms similar to 1nance leases, Nobina and other public bus also assumes the residual value risk. In this respect, Nobina transport operators in Denmark use loan 1nancing to acquire can take advantage of its centralised 7eet system by reallocat- new buses, which is obtained on similar terms as 1nance leases ing buses internally between contracts, with a goal of fully uti- with respect to amortisation, contract tenor, etc. e loan lising the accounting life of its buses by matching it with the amount is transferred from the 1nance company to Nobina, terms of the Company’s various contracts. In addition, the who thereafter pays the bus manufacturer. As a result, in con- lease payment curves of 1nance leases are typically well trast to 1nance leases, the loan is recognised in Nobina’s cash matched with the cash 7ow generation pattern of PTA con- 7ow statement and the purchase of the bus is a recorded as a tracts, see “ —"e e&ect of contract migration .” e Company capital expenditure. For example, in February +)%$, Nobina also sells buses in various markets to realise any remaining purchased a substantial number of buses in Denmark using value. such loan 1nancing arrangements, which had a positive impact on the Company’s consolidated cash 7ow in the Operating leases amount of SEK &) million. Funding from a loan was received Under operating leases, the lessor retains the leased buses on during the last week of February +)%$, while an invoice from its balance sheet. Nobina (as the lessee) treats the leased buses the bus manufacturer was due in the beginning of March +)%$ as an o#-balance sheet arrangement and records lease pay- and booked as a payable of SEK &) million, leading to a posi- ments as an operating expense on the income statement. e tive change in working capital. lease payments include both interest and payment of the prin- cipal amount. Operating leases are typically divided in two Operational efficiency tranches of 1ve years each, with the 1rst tranche having a Nobina has over the last ten years focused extensively on the steeper payment curve, which, in Nobina’s view, makes oper- e8ciency of its bus transport operations. Nobina utilises a ating leases less attractive from a cash 7ow perspective. Nobina centralised management system for its tra8c planning in therefore believes that using 1nance leases is the most e8cient many major regions in order to improve delivery quality and way to 1nance bus acquisitions. In comparison, when using increase pro1tability under its contracts. e focus on tra8c operating leases, operations incur upfront payment costs, planning has enabled the Company to increase e8ciency by which result in a disproportionate amount of cash being optimising bus routes, timetables and depot locations. required in the initial contract migration phase when cash Nobina’s planning e8ciency (de1ned as the number of time- 7ow generated by the contracts is typically low. Consequently, table hours, or the Company’s estimate of the number of Nobina has primarily employed 1nance leases since +))( and hours compensated under a contract in the relevant client the remaining operating leases are currently being phased out contract divided by the number of total worked hours) has as the contracts expire. However, in some cases, where PTAs increased from (-5 in FY)$/)( to -+5 in FY%&/%$. During the require the use of a speci1c bus type which Nobina believes past 1ve years, the level has been stable around -+5, which, has a residual value that exceeds what is feasible to handle according to Nobina’s management, is re7ecting a maximised within 7eet management, then Nobina requires that the PTA planning e8ciency (assuming the current mix of the contract provides a residual value-guarantee. Such buses, although portfolio). e graph below sets forth Nobina’s planning obtained and operated on 1nance lease terms, are classi1ed as e8ciency development for the periods indicated. operating leases for accounting purposes.

66 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) OPERATIONAL AND FINANCIAL REVIEW

FIGURE 10:14 PLANNING EFFICIENCY IMPROVEMENT Planning efficiency

72.2% 71.6%

70.0%

66.5%

FY05/06 FY08/09 FY11/12 FY14/15

Nobina actively monitors the pro1tability of its contracts by due to high production hour volumes in Nobina’s contracts tracking certain KPIs to ensure that the Company’s perfor- and limited holiday periods. Nobina’s fourth quarter (% Decem- mance and other circumstances are in line with the assump- ber to +*/+' February) is typically susceptible to 7uctuations tions made when tendering for the relevant contracts. Such year-on-year due to uncertain winter weather conditions and KPIs include the number of buses in operation, number of whether the holidays surrounding Christmas are falling on kilometres driven and number of hours operated, as well as weekdays or weekends. However, the impact of these seasonal- revenue per bus, kilometre and hour. ity patterns can be a#ected by the start-up of new contracts or the expiration of existing contracts. For example, in the second Seasonality and net working capital developments quarter of +)%&, loss-making contracts in Dalarna, Sweden Nobina’s 1nancial year runs between % March and +*/+' and Vesfold, Norway expired, which had a negative e#ect on February. Tra8c volumes are uneven during a 1nancial year Nobina’s net sales, but a positive e#ect on pro1tability for the largely due to 7uctuating passenger supply, with a correspond- period. In addition, in the second quarter of FY%$/%(, Nobina ing impact on earnings from Nobina’s contracts. Generally, will incur start-up costs related to the new contract for public tra8c volumes are lower during weekends and public holiday bus transport services in Tyresö, Haninge and Nynäshamn periods. Nobina’s second quarter (% June to 0% August) typical- municipalities in Stockholm (Nobina’s largest contract to ly generates less revenue due to long holiday periods and low date), which is expected to negatively a#ect pro1tability for production hour volumes in Nobina’s contracts during the the quarter. e table below sets forth Nobina’s revenue and summer months. Nobina’s third quarter (% September to 0) operating pro1t development by quarter during the periods November) is generally the busiest quarter in terms of tra8c under review. volumes and characterised by high and stable revenue streams

QC QA QG QD QC QA QG QD QC QA QG QD (SEK millions) FYCA/CG FYCA/CG FYCA/CG FYCA/CG FYCG/CD FYCG/CD FYCG/CD FYCG/CD FYCD/CF FYCD/CF FYCD/CF FYCD/CF Net sales X,f[f X,ba` X,fb_ X,bZ[ X,fY` X,bXf X,ffZ X,fX` X,ff` X,fX_ X,ZY[ X,Za_ Operating profit/loss `_ f[ fX Xb `_ Xab X^^ [^ _Z XXX X`a YX

Nobina’s net working capital (excluding cash and cash equiva- for payments received from PTAs than for payments payable lents and restricted bank accounts) has historically been nega- to its suppliers. Consequently, the fourth quarter is typically tive, primarily due to seasonal, personnel and contractual the strongest quarter for Nobina’s net working capital in terms matters, such as accruals relating to personnel costs paid in of released capital, as a result of high level of payments from arrears and payment terms under the Company’s PTA and PTAs connected to the typically strong third quarter with supply contracts. e high intra-quarter variations in net high production hour volumes in Nobina’s contracts. As of the working capital may periodically a#ect changes in net work- end of FY%&/%$, FY%0/%& and FY%+/%0, Nobina’s net working ing capital. e largest intra-month cash 7ow items relate to capital was negative SEK *0) million, negative SEK -*0 million sta# salaries, 1nancial lease payments and payments received and negative SEK -)0 million, respectively. As a percentage of from PTAs. High production and business growth does not revenue in the same periods, Nobina’s net working capital was typically result in an increased amount of tied up capital for %%.)5, %).*5 and '.-5, respectively. e table below sets forth Nobina, as the Company generally has shorter payment terms Nobina’s net working capital as of the dates indicated.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 67 OPERATIONAL AND FINANCIAL REVIEW

As of AI February (SEK million unless otherwise stated) ABCF ABCD ABCG

Inventories YZ _[ YY Trade receivables _XZ [b_ [`Z Other current receivables b` bY fX Deferred expenses and accrued income ^[` ^[_ ^Ya Total current assets XXZ \U\ \UJ

Accounts payable –Yb` –Yba –Y`_ Other current liabilities –XbY –X__ –X_[ Accrued expenses and deferred income –X,a`a –fZ_ –fXZ Total current liabilities –I,\IZ –I,WYZ –I,JU\ Net working capital –XUZ –\XU –\ZU Net working capital as a percentage of revenue (%) –XX.a –Xa.f –Z.b

e table below sets forth Nobina’s net working capital including as a percentage of revenue for the last twelve month period (“ LTM ”), as of the dates indicated.

QC QA QG QD QC QA QG QD QC QA QG QD (SEK millions) FYCA/CG FYCA/CG FYCA/CG FYCA/CG FYCG/CD FYCG/CD FYCG/CD FYCG/CD FYCD/CF FYCD/CF FYCD/CF FYCD/CF Net working capital –_XY –`Xa –`[f –ba[ –``X –`_a –_`b –bf[ –`fY –_bb –`^Y –f^Z As a % of LTM revenue –b –Z –Z –Xa –Z –Z –f –XX –Z –f –f –XX

RECENT DEVELOPMENTS Fuel, tyres and other consumables e Company’s results throughout April of FY%$/%( were in Fuel, tyres and other consumables consist of costs directly line with expectations. Net sales increased in both March and connected to the bus 7eet and its usage. April, compared to the corresponding periods of FY%&/%$, as a result of, among other things, volume growth of certain exist- Other external expenses ing contracts in various regions and positive e#ects of revenue Other external expenses relate to costs for buildings, consult- indexation. Operating expenses remained stable in March and ant fees, audit fees, indirect administration costs and other April and slightly lower than in the corresponding periods of overhead costs, as well as lease payments under Nobina’s oper- the previous year. No major tenders were announced and no ating bus leases. material contracts were commenced during the period. Personnel costs SEGMENT REPORTING Personnel costs consist of salary expenses, employer’s contri- Nobina’s operations are managed and reported in operating butions, pension expenses and other personnel costs. segments, Sweden (including Swebus), Norway, Finland, Denmark and central functions and other items. e account- Capital losses from the disposal of non-current assets ing policies applied for the reporting segments are the same as Capital losses from the disposal of non-current assets contain those applied for the consolidated 1nancial statements. e capital losses from the disposal of buses. Company evaluates the operations in each operating segment based on the operating pro1t for each such segment, and nor- Depreciation/amortisation and impairment of mally records sales and transfers between operating segments PPE and intangible assets on an arm’s length basis at market prices. For a discussion of Depreciation/amortisation and impairment largely comprise net sales and operating pro1t/loss on a segment basis, see “ — depreciation of buses, but also relate to depreciation of equip- Operating results—Consolidated income statement for FY)//)1 ment, tools, inventories and 1ttings, 1xtures and buildings. compared to FY)2/)/ ” and “ —Operating results— Consolidated income statement for FY)2/)/ compared to FY)3/)2 .” Financial income Financial income consists of interest on cashpool, restricted EXPLANATION OF INCOME STATEMENT ITEMS bank accounts and expected return on plan assets for payment Net sales of the companies’ pension liabilities. Net sales consist primarily of revenue earned on public bus transportation in the Nordic region with operations in Financial expense Sweden, Norway, Finland and Denmark, but also revenue Financial expense consists of the interest portion of 1nance from express bus services in Sweden. To a lesser extent, net leases, interest paid on the Company’s SEK $$) million bond sales includes leasing, workshop services and the sale of diesel. listed on Nasdaq Stockholm and interest expense on the companies’ pension liabilities.

68 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) OPERATIONAL AND FINANCIAL REVIEW

Income tax year, applying the tax rates that apply as at the balance sheet Income tax consists of current and deferred tax. Income taxes date, including adjustments for current tax attributable to are recognised through pro1t or loss unless the underlying previous periods. Deferred income tax is calculated according transaction is directly recognised in equity or other compre- to the balance sheet method based on temporary di#erences hensive income, in which case the related tax e#ect is also between the carrying value of assets and liabilities and their recognised in equity or other comprehensive income, respec- value for tax purposes. Deferred income tax also includes a tively. Current tax is the tax paid or received for the current portion of calculated tax on loss carryforwards.

OPERATING RESULTS Consolidated income statement for FY14/15 compared to FY13/14 e table below sets forth Nobina’s results of operations and the period on period percentage of change for the periods indicated. For the financial year (SEK million) ABCD/ABCF Change in % ABCG/ABCD

Net sales \,WJ] U.] \,YT]

Operating expenses Fuel, tyres and other consumables –X,`__ a.b –X,`YY Other external expenses –X,aZX –a.Z –X,XaX Personnel costs –[,ffX _.X –[,`Z^ Capital losses from the disposal of non-current assets –[_ – –X_ Depreciation/amortisation and impairment of PPE and intangible assets –_X` _.X –YZX Operating profit/loss U\I IU.X UYT

Profit from net financial items Financial income f –XX.X Z Financial expense –^[f –Y.a –^Yf Net financial items –YUZ –U.X –YU]

Profit/loss before tax (EBT) IJI TY.I X\ Tax –Yb _X.` –[X Profit/loss for the year ]J T\.] WT

Net sales contracts also had positive impact on net sales. e increase Nobina’s net sales increased by SEK +*) million, or 0.'5, from in net sales was o#set by index adjustments in all segments SEK -,+(' million in FY%0/%& to SEK -,$&' million in FY%&/%$. related to decreased fuel prices and the loss of net sales from e increase was driven primarily by the start-up of new tra8c certain expired loss-making contracts. contracts resulting in larger volume and sales. Due to careful preparations when concluding and starting up several con- Net sales by operating segment tracts at the beginning of the contract term, Nobina was able e table below sets forth our net sales for each of our seg- to successfully execute contract migration for a total of just ments and the period on period percentage of change for the over ')) buses. Index adjustments in all segments related to periods indicated. increased salaries and CPIs and volume growth of existing For the financial year (SEK million) ABCD/ABCF Change in % ABCG/ABCD

Sweden Regional _,X[f _.Z Y,f_[ Interregional ^f[ –Xa.Y [X` Denmark [Z_ XY.^ [Y` Norway ZY[ –_.^ ZZ_ Finland fX^ –X.^ fa^ Eliminations * –^^ –Yf.f –Y[ Total \,WJ] U.] \,YT]

* Includes Group-internal transactions.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 69 OPERATIONAL AND FINANCIAL REVIEW

Sweden: Nobina’s net sales in Sweden (including both regional Other external expenses and interregional tra8c) increased by SEK +$+ million, or Nobina’s other external expenses decreased by SEK %) million, &.'5, from SEK $,%(' million in FY%0/%& to SEK $,&+% million or ).'5, from SEK %,%)% million in FY%0/%& to SEK %,)'% mil- in FY%&/%$. e increase was driven by the start-up of new lion in FY%&/%$. As a percentage of net sales, Nobina’s other tra8c contracts with larger volume and sales, particularly for external expenses decreased from %$.%5 in FY%0/%& to %&.$5 in Skaraborg and Västernorrland counties. ese contracts FY%&/%$. e decrease was driven by reduced lease payments replaced contracts that expired during the year. e new con- under Nobina’s operating leases as these leases are being tracts contained increased incentive components. Volume phased out as the contracts expire. growth of existing contracts in various regions due to requests from PTAs for changes in the agreed tra8c also had a positive Personnel costs impact on net sales. e increase in net sales was o#set by the Nobina’s personnel costs increased by SEK %*' million, or expiration of a loss-making contract in Dalarna, and a $.%5, from SEK 0,('+ million in FY%0/%& to SEK 0,**% million decrease in net sales from Swebus’ interregional tra8c, due to in FY%&/%$. As a percentage of net sales, Nobina’s personnel lower demand and increased price competition. costs increased from $).*5 in FY%0/%& to $%.&5 in FY%&/%$. e increase was driven primarily by increased salaries and payroll Denmark: Nobina’s net sales in Denmark increased by SEK overhead incurred in connection with operating tra8c under &' million, or %&.+5, from SEK 0&( million in FY%0/%& to SEK new regional contracts, as well as contractual salary increases. 0'$ million in FY%&/%$. e increase was driven by contract e increase was also due to lower e8ciency, partly explained wins for public bus transport services in the Copenhagen area. by the migration of new contracts and the ordinary-course e Company’s existing contract for Copenhagen was loss- optimisation phase of sta# utilisation under new contracts, making and covered only one region, while the new contract and cost in7ation. renewed Nobina’s services for the same region on substantially improved terms, as well as added two new regions in Copen- Capital losses from the disposal of non-current assets hagen. Services under these contracts commenced in Decem- Nobina’s capital losses from the disposal of non-current assets ber +)%&. increased by SEK +) million, from SEK %$ million in FY%0/%& Norway: Nobina’s net sales in Norway decreased by SEK $+ to SEK 0$ million in FY%&/%$. e increase was driven by million, or $.+5, from SEK ''$ million in FY%0/%& to SEK '&0 increased sales of buses, due to movements in the Company’s million in FY%&/%$. e decrease was driven by the expiration contract portfolio, such as the expiration of loss-making of a loss-making contract in Vestfold. e decrease was o#set contracts in Dalarna, Sweden and Vesfold, Norway, which by positive e#ects of a cost indexation mismatch under exist- resulted in surplus bus capacity. ing contracts, as index adjustments under the Company’s PTA contracts in Norway are only made biannually, which resulted Depreciation/amortisation and impairment of in a time lag of downward index adjustments related to PPE and intangible assets decreased fuel prices. Nobina’s depreciation/amortisation and impairment of PPE and intangible assets increased by SEK +$ million, or $.%5, Finland: Nobina’s net sales in Finland increased by SEK %) from SEK &'% million in FY%0/%& to SEK $%( million in million, or %.+5, from SEK *)+ million in FY%0/%& to SEK *%+ FY%&/%$. e increase was driven by depreciation of existing million in FY%&/%$. e increase was driven by the start-up of buses as the Company continued to expand its use of 1nance new tra8c contracts with larger volume and sales, primarily in leases, as well as continued depreciation of equipment, tools, the Helsinki region, and the full-year e#ect from contracts inventories and 1ttings, 1xtures and buildings. that started up at the end of FY%0/%&. e increase in net sales was o#set by the loss of a contract for advertisement on buses Operating profit/loss and revised interpretation of the bonus system under an Nobina’s operating pro1t increased by SEK &$ million, or existing PTA contract. %0.*5, from SEK 0+( million in FY%0/%& to SEK 0-% million in FY%&/%$. e increase was driven by generally successful con- Fuel, tyres and other consumables tract migration as a result of the expiration of loss-making con- Nobina’s expense for fuel, tyres and other consumables tracts and the start-up of new tra8c contracts and the positive increased by SEK %% million, or ).-5, from SEK %,(&& million e#ects of these new contracts on the Company’s overall con- in FY%0/%& to SEK %,($$ million in FY%&/%$. As a percentage of tract portfolio. e increase in operating pro1t was o#set by net sales, Nobina’s expense for fuel, tyres and other consuma- costs related to the start-up phase of new tra8c contracts, as bles decreased from ++.(5 in FY%0/%& to +%.'5 in FY%&/%$. e well as increased salaries and payroll overhead and increased increase was driven by growth in tra8c volumes, which result- fuel expenses incurred in connection with operating tra8c ed in increased fuel and maintenance costs. e increase was under the new contracts. also due to lower e8ciency, partly explained by the migration of new contracts and the ordinary course optimisation phase of tra8c and maintenance planning under new contracts, and cost in7ation. e increase in expenses for fuel, tyres and other consumables was o#set by reduced fuel prices in the market.

70 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) OPERATIONAL AND FINANCIAL REVIEW

Operating pro't/loss by segment e table below sets forth our operating pro1t/loss for each of our segments and the period on period percentage of change for the periods indicated.

For the financial year (SEK million) ABCD/ABCF Change in % ABCG/ABCD

Sweden Regional [b[ X[.b [^f Interregional Z n/m [ Denmark –X_ b.X –XY Norway –^ –[[.[ –[ Finland Yb Y.Y Y_ Central functions and other items –YX ^Y.^ –[[ Total U\I IU.X UYT

Sweden: Nobina’s operating pro1t in Sweden (including both Finland: Nobina’s operating pro1t in Finland increased by regional and interregional tra8c) increased by SEK $% million, SEK + million, or &.&5, from SEK &$ million in FY%0/%& to or %$.&5, from SEK 00% million in the FY%0/%& to SEK 0*+ mil- SEK &- million in FY%&/%$. e increase was driven by lion in FY%&/%$. e increase was driven by successful contract improved e8ciency in the Company’s operations, due to migration as a result of the expiration of a loss-making con- closer follow-up of bus damage and fuel consumption. tract in Dalarna and the start-up of new tra8c contracts, Central functions and other items: Central functions and including in Skaraborg and Västernorrland counties, and the other items include expenses related to Nobina’s o8ce head- positive e#ects of these new contracts on the Company’s over- quarters, including Group functions, such as management, IT all contract portfolio. e increase was also due to positive and 1nance. Nobina’s operating loss from central functions e#ects of a cost indexation mismatch under existing contracts, and other items increased by SEK * million, or +&.+5, from as the Company’s personnel expenses in Sweden were general- negative SEK 00 million in FY%0/%& to negative SEK &% million ly lower than adjustments made under the relevant index. in FY%&/%$. e increase was driven by external consultants Despite lower demand and increased price competition, Swe- engaged to develop the Company’s IT system for performance bus’ interregional tra8c contributed to increased operating management and analysis. pro1t, due to the full-year e#ect of discontinuing its Arlanda Airport shuttle bus services and certain e8ciency measures, Financial income which both had positive e#ects on expenses. e increase in Nobina’s 1nancial income decreased by SEK % million, or operating pro1t was o#set by costs related to the start-up %%.%5, from SEK ' million in FY%0/%& to SEK * million in phase of new tra8c contracts, particularly maintenance costs. FY%&/%$. e decrease was driven by generally decreased inter- e increase was also o#set by the negative outcome of a legal est rates on the Company’s restricted bank accounts, which proceeding against a PTA regarding contract interpretation, consist of collateral for certain contractual obligations and which had a net negative e#ect of SEK +0 million in FY%&/%$ pension liabilities. compared to FY%0/%&, in which year a positive provision of SEK %% million was made with respect to the same matter. Financial expense Denmark: Nobina’s operating loss in Denmark increased Nobina’s 1nancial expense decreased by SEK %) million, or by SEK % million, or -.%5, from negative SEK %& million in &.)5, from SEK +&* million in FY%0/%& to SEK +0* million in FY%0/%& to negative SEK %$ million in FY%&/%$. e increase FY%&/%$. e decrease was driven by generally reduced interest was primarily due to operating losses related to the old con- rates in the market, which decreased interest rates under the tract for public bus transport services in Copenhagen, which, Company’s bus 1nance leases. e decrease was also due to however, expired in December +)%& and was replaced with an improved 1nancing terms achieved by the Company following improved contract. e increase was also due to costs related the re1nancing of its indebtedness and concurrent issuance to the start-up phase of the new Copenhagen contract. of a SEK $$) million bond listed on Nasdaq Stockholm. e decrease in 1nancial expense was o#set by advisory costs related Norway: Nobina’s operating loss in Norway decreased by SEK to the issuance of the new bond and the expense of remaining % million, or 00.05, from negative SEK 0 million in FY%0/%& to capitalised borrowing costs related to the Company’s previous negative SEK + million in FY%&/%$. e decrease was primarily bond. due to the expiration of a loss-making contract in Vestfold and certain e8ciency measures to streamline the Company’s operations, such as centralisation of contract management, which had positive e#ects on lost time and other KPIs.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 71 OPERATIONAL AND FINANCIAL REVIEW

Income tax EBITDA Nobina’s tax expense increased by SEK %( million, or $%.(5, Nobina’s EBITDA increased by SEK ') million, or %).*5, from SEK 0% million in FY%0/%& to SEK &- million in FY%&/%$. from SEK *0+ million in FY%0/%& to SEK '++ million in e Company’s e#ective tax rate decreased from 0$.(5 in FY%&/%$. e increase was driven by generally successful con- FY%0/%& to 00.05 in FY%&/%$. e Company has accounted for tract migration as a result of the expiration of loss-making deferred tax related to tax losses carried forward. e deferred contracts and the start-up of new tra8c contracts and the tax has been calculated using tax rates that currently apply, or positive e#ects of these new contracts on the Company’s over- that are expected to apply when the related deferred tax asset all contract portfolio. e increase in EBITDA was o#set by is realised or the tax liability is settled. e deferred tax asset costs related to the start-up phase of new tra8c contracts, as that pertains to deductible temporary di#erences and unused well as increased salaries and payroll overhead and increased tax losses has been reported to the extent that it is expected to fuel expenses incurred in connection with operating tra8c be utilised in the foreseeable future, and doing so is deemed under the new contracts. probable. Current tax for Nobina amounted to negative SEK EBITDA is a non-IFRS measure and is not a substitute for % million and the change of assessed deferred tax assets and any IFRS measure. Nobina uses this measure for many pur- deferred tax liabilities impacted pro1t for FY%&/%$ by negative poses in managing and directing the Company. For a recon- SEK &( million. e Company may, from time to time, ciliation of EBITDA to pro1t/loss, see “ Selected consolidated account for additional deferred tax, which will in7uence its historical #nancial and other information—Selected key tax expense accordingly. See “ Risk factors—Risks related to performance indicators .” Nobina—Legal and tax risks—"e Group’s e&ective tax rate may vary due to numerous factors including changes in tax laws in any of the jurisdictions in which the Group operates ”.

Profit/loss for the year Nobina recognised a net pro1t of SEK '& million in FY%&/%$ and a net pro1t of SEK $( million in FY%0/%&.

Consolidated income statement for FY13/14 compared to FY12/13 e table below sets forth Nobina’s results of operations and the period on period percentage of change for the periods indicated.

For the financial year (SEK million) ABCG/ABCD Change in % ABCA/ABCG

Net sales \,YT] Z.X \,YIY

Operating expenses Fuel, tyres and other consumables –X,`YY –[.Y –X,ba^ Other external expenses –X,XaX –`.` –X,XbZ Personnel costs –[,`Z^ ^.Y –[,`a` Capital losses from the disposal of non-current assets –X_ – –X_ Depreciation/amortisation and impairment of PPE and intangible assets –YZX _.f –Y`Y Operating profit/loss UYT UY.W YJT

Profit from net financial items Financial income Z–Z Financial expense –^Yf –`.X –^`Y Net financial items –YU] –T.U –YWW

Profit/loss before tax X\ – –] Tax –[X – `Z Profit/loss for the year WT –T.\ TZ

Net sales had positive impact on net sales e increase was o#set by Nobina’s net sales increased by SEK $- million, or ).*5, from contracts that expired during the year, which were not fully SEK -,+%+ million in FY%+/%0 to SEK -,+(' million in FY%0/%&. replaced by new contracts. e increase was driven primarily by volume growth of exist- ing contracts, the start-up of new tra8c contracts resulting in Net sales by segment larger volume and sales and the full-year e#ect of certain con- e table below sets forth our net sales for each of our seg- tracts that started up at the end of FY%+/%0. Index adjustments ments and the period on period percentage of change for the in all segments related to increased salaries and fuel costs also periods indicated.

72 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) OPERATIONAL AND FINANCIAL REVIEW

For the financial year (SEK million) ABCG/ABCD Change in % ABCA/ABCG

Sweden Regional Y,f_[ X.a Y,faf Interregional [X` –XX.a [__ Denmark [Y` X._ [YX Norway ZZ_ _.^ ZY` Finland fa^ a.X faX Eliminations * –Y[ Xa.[ –[Z Total \,YT] Z.X \,YIY

* Includes Group-internal transactions.

Sweden: Nobina’s net sales in Sweden (including both regional Other external expenses and interregional tra8c) increased by SEK ( million, or ).%5, Nobina’s other external expenses decreased by SEK -* mil- from SEK $,%(0 million in FY%+/%0 to SEK $,%(' million in lion, or (.(5, from SEK %,%-' million in FY%+/%0 to SEK %,%)% FY%0/%&. e increase was driven by volume growth of existing million in FY%0/%&. As a percentage of net sales, Nobina’s other contracts due to requests from PTAs for changes in the agreed external expenses decreased from %(.05 in FY%+/%0 to %$.%5 in tra8c in various regions. e increase in net sales was o#set by FY%0/%&. e decrease was driven by reduced lease payments contracts that expired during the year, such as in Bromma, under Nobina’s operating leases as these leases are being Stockholm, which were not fully replaced by new contracts, as phased out as the contracts expire. well as a decrease in net sales from Swebus’ interregional traf- 1c, due to lower demand and increased price competition. Personnel costs Nobina’s personnel costs increased by SEK *( million, or Denmark: Nobina’s net sales in Denmark increased by SEK $ +.&5, from SEK 0,()( million in FY%+/%0 to SEK 0,('+ million million, or %.$5, from SEK 0&% million in FY%+/%0 to SEK 0&( in FY%0/%&. As a percentage of net sales, Nobina’s personnel million in FY%0/%&. e increase was driven by positive e#ects costs increased from $).)5 in FY%+/%0 to $).*5 in FY%0/%&. e of a cost indexation mismatch under existing contracts, as fuel increase was driven primarily by increased salaries and payroll indices in PTA contracts were overcompensating when fuel overhead incurred in connection with operating tra8c under cost increased. e increase in net sales was slightly o#set by new regional contracts, as well as contractual salary increases. the expiration of a contract. e increase was also due to certain management challenges and reorganisations in Norway. Norway: Nobina’s net sales in Norway increased by SEK &' million, or $.+5, from SEK '&( million in FY%+/%0 to SEK ''$ Capital losses from the disposal of non-current assets million in FY%0/%&. e increase was driven by the full-year Nobina’s capital losses from the disposal of non-current assets e#ect of certain contracts that started up at the end of FY%+/%0, remained stable at SEK %$ million in FY%0/%& compared to including the contract for Oslo Vest. FY%+/%0.

Finland: Nobina’s net sales in Finland increased by SEK % mil- Depreciation/amortisation and impairment of lion, or ).%5, from SEK *)% million in FY%+/%0 to SEK *)+ PPE and intangible assets million in FY%0/%&. e increase was driven by the start-up of Nobina’s depreciation/amortisation and impairment of PPE new tra8c contracts, which added additional routes to exist- and intangible assets increased by SEK +- million, or $.*5, ing regions. from SEK &(& million in FY%+/%0 to SEK &'% million in FY%0/%&. e increase was driven by depreciation of existing Fuel, tyres and other consumables buses as the Company continued to expand its use of 1nance Nobina’s expenses for fuel, tyres and other consumables leases, as well as continued depreciation of equipment, tools, decreased by SEK $* million, or 0.&5, from SEK %,-)+ million inventories and 1ttings, 1xtures and buildings. in FY%+/%0 to SEK %,(&& million in FY%0/%&. As a percentage of net sales, Nobina’s expenses for fuel, tyres and other consuma- bles decreased from +0.(5 in FY%+/%0 to ++.(5 in FY%0/%&. e decrease was driven by lower than expected additional costs due to winter conditions, such as fuel consumption, damage and maintenance.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 73 OPERATIONAL AND FINANCIAL REVIEW

Operating profit/loss nance and cancelled departures. Operating pro1t was also Nobina’s operating pro1t increased by SEK *) million, or a#ected by certain positive and negative one-o# items. 0+.$5, from SEK +&( million in FY%+/%0 to SEK 0+( million in FY%0/%&. e increase was driven by general e8ciency Operating pro't/loss by segment improvements in bus operations and tra8c planning in all e table below sets forth our operating pro1t/loss for each of segments, and lower than expected additional costs due to our segments and the period on period percentage of change winter conditions, such as fuel consumption, damage, mainte- for the periods indicated.

For the financial year (SEK million) ABCG/ABCD Change in % ABCA/ABCG

Sweden Regional [^f f.[ [a[ Interregional [ –Ya _ Denmark –XY –Y`.^ –^` Norway –[ –ff –^_ Finland Y_ Ya.` [^ Central functions and other items –[[ –^[.[ –Y[ Total UYT UY.W YJT

Sweden: Nobina’s operating pro1t in Sweden (including both Central functions and other items: Nobina’s operating loss regional and interregional tra8c) increased by SEK +0 million, from central functions and other items decreased by SEK %) or -.$5, from SEK 0)* million in FY%+/%0 to SEK 00% million million, or +0.05, from negative SEK &0 million in FY%+/%0 to in FY%0/%&. e increase was primarily due to the repayment of negative SEK 00 million in FY%0/%&. e increase was driven SEK +$ million by Fora (the company responsible for handling by certain reorganisations. Nobina’s collective pension plans) during the fourth quarter as the pension payments that Nobina had previously been Financial income required to pay had exceeded the stipulated liabilities. e Nobina’s 1nancial income remained stable at SEK ' million increase in operating pro1t was o#set by decreased operating in FY%0/%& compared to FY%+/%0. pro1t from Swebus’ interregional tra8c, due to lower demand and increased price competition, although discontinuing its Financial expense Arlanda Airport shuttle bus services and certain e8ciency Nobina’s 1nancial expense decreased by SEK %( million, or measures both o#set the decrease in operating pro1t from (.%5, from SEK +(& million in FY%+/%0 to SEK +&* million in Swebus. FY%0/%&. e decrease was driven by generally reduced interest rates in the market, which decreased interest rates under the Denmark: Nobina’s operating loss in Denmark decreased by Company’s bus 1nance leases. e decrease in 1nancial SEK %+ million, or &(.+5, from negative SEK +( million in expense in FY%0/%& was o#set by the foreign exchange rate FY%+/%0 to negative SEK %& million in FY%0/%&. e decrease gains in FY%+/%0 with respect to the Company’s EUR denomi- was driven by lower operating losses generated by a contract nated bonds, which was re1nanced in connection with the that started up in +))*, due to e8ciency improvements as a concurrent issuance of a SEK denominated bond in +)%+. result of improved utilisation of sta# and closer follow-up of maintenance. Income tax Nobina’s tax expense increased by SEK %)) million from Norway: Nobina’s operating loss in Norway decreased by positive SEK (' million in FY%+/%0 to negative SEK 0% million SEK ++ million, or **5, from negative SEK +$ million in in FY%0/%&. e Company has accounted for deferred tax FY%+/%0 to negative SEK 0 million in FY%0/%&. e decrease was related to tax losses carried forward. e deferred tax has been driven by improved bus operations and tra8c planning. e calculated using tax rates that currently apply, or that are decrease in operating loss was o#set by a one-o# payment of expected to apply when the related deferred tax asset is realised SEK %0 million due to a settlement with Skyss related to a dis- or the tax liability is settled. e deferred tax asset that per- pute of SEK 0% million in total claims regarding contract inter- tains to deductible temporary di#erences and unused tax pretation of contracts in Sunnhordaland and Nordhordaland. losses has been reported to the extent that it is expected to be utilised in the foreseeable future, and doing so is deemed Finland: Nobina’s operating pro1t in Finland increased by probable. Current tax for Nobina amounted to SEK ) million, SEK %0 million, or &).(5, from SEK 0+ million in FY%+/%0 to and retroactively calculated deferred tax assets and deferred SEK &$ million in FY%0/%&. e increase was driven by tax liabilities impacted pro1t for the year by SEK - million. improved e8ciency in the Company’s operations, due to closer follow-up of maintenance, and lower than expected additional costs due to winter conditions, such as fuel con- sumption, damage, maintenance and cancelled departures.

74 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) OPERATIONAL AND FINANCIAL REVIEW

Profit/loss for the year LIQUIDITY AND CAPITAL RESOURCES Nobina recognised a net pro1t of SEK $( million in FY%0/%& Nobina’s liquidity requirements consist mainly of interest pay- and a net pro1t of SEK () million in FY%+/%0. ments and amortisations on the bus leases, interest payments on the Company’s bond and funding of its capital expenditure EBITDA and working capital. Nobina’s principal source of liquidity is Nobina’s EBITDA increased by SEK %)- million, or %&.*5, cash generated from its operating activities. from SEK -+$ million in FY%+/%0 to SEK *0+ million in FY%0/%&. e increase was driven by general e8ciency Working capital improvements in bus operations and tra8c planning in all It is Nobina’s assessment that the available working capital is segments, and lower than expected additional costs due to su8cient to meet its requirements for a period of twelve winter conditions, such as fuel consumption, damage, mainte- months from the date of this Prospectus. nance and cancelled departures. EBITDA is a non-IFRS measure and is not a substitute for Cash flows any IFRS measure. Nobina uses this measure for many pur- e following table sets forth the principal components of our poses in managing and directing the Company. For a recon- cash 7ows for the periods indicated. ciliation of EBITDA to pro1t/loss, see “ Selected consolidated historical #nancial and other information—Selected key perfor- mance indicators .”

For the financial year (SEK million) ABCD/ABCF ABCG/ABCD ABCA/ABCG

Cash flow from operating activities Z`Y fZZ f`` Cash flow from investing activities –^X[ –XX –XXf Cash flow from financing activities –`Xa –bX_ –bX_ Cash flow for the year XYX Xb[ [[ Cash and cash equivalents at the beginning of the year UZ] IU\ IZ\ Cash and cash equivalents at the end of the year JWU UZ] IU\

Cash flow from operating activities investing activities in FY%0/%& was primarily due to lower vol- Nobina’s cash 7ow from operating activities increased by SEK ume of bus purchases which were not lease 1nanced. ($ million, from SEK *'' million in FY%0/%& compared to SEK '(& million in FY%&/%$. e increase in cash 7ow from Cash flow from financing activities operating activities in FY%&/%$ was primarily due to improved Nobina’s cash out7ow from 1nancing activities decreased by operating results. e increase was also due to positive changes SEK %)$ million, from SEK -%$ million in FY%0/%& compared in working capital, including as a result of renegotiated cus- to SEK (%) million in FY%&/%$. is decrease in cash out7ow tomer payment terms that ensured payments well before from 1nancing activities in FY%&/%$ was primarily due to month-end and generally reduced overdue receivables. reduced interest rates on 1nancial leases and decreased interest Nobina’s cash 7ow from operating activities increased by on the Company’s bond. e decrease in cash out7ow from SEK 00 million, from SEK *(( million in FY%+/%0 to SEK *'' 1nancing activities was o#set by payment of advisor fees in million in FY%0/%&. is increase in cash 7ow from operating connection with the bond re1nancing. activities in FY%0/%& was primarily due to improved operating Nobina’s cash out7ow from 1nancing activities remained results. e increase in cash 7ow from operating activities was stable at SEK -%$ million in FY%0/%& compared to FY%+/%0. o#set by decreased changes in operating liabilities due to the timing of holidays, as a result of which a large number of Capital expenditure suppliers were paid after year-end. Nobina’s capital expenditure consists mainly of cash invest- ment of new buses and equipment for buses and bus depots Cash flow from investing activities related to new contracts. Nobina’s capital expenditure Nobina’s cash out7ow from investing activities increased by increased by SEK +$( million, from SEK 0' million in FY%0/%& SEK +)+ million, from SEK %% million in FY%0/%& compared to SEK +'$ million in FY%&/%$. As a percentage of total revenue, to SEK +%0 million in FY%&/%$. e increase in cash out7ow Nobina’s capital expenditure increased from ).$5 in FY%0/%& from investing activities in FY%&/%$ was primarily due to pur- to 0.'5 in FY%&/%$. e increase was due primarily to new chase of buses that were loan-1nanced, and thereby recorded buses, which were partly funded through external loans. in the cash 7ow statement (as opposed to lease 1nanced buses). Nobina’s capital expenditure decreased by SEK ** million, e increase in cash out7ow from investing activities was o#- from SEK %+- million in FY%+/%0 to SEK 0' million in FY%0/%&. set by higher divestments of buses than the previous year. As a percentage of total revenue, Nobina’s capital expenditure Nobina’s cash out7ow from investing activities decreased decreased from %.*5 in FY%+/%0 to ).$5 in FY%0/%&. e decrease by SEK %)- million, from SEK %%* million in FY%+/%0 to SEK was primarily due to smaller volume of new contracts. %% million in FY%0/%&. e decrease in cash out7ow from

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 75 OPERATIONAL AND FINANCIAL REVIEW

Liquidity arrangements Shortly after completion of the O#er, Nobina intends to Bonds use SEK (0* million of the net proceeds from the O#er to On %0 May +)%&, Nobina Europe issued SEK-denominated repay the Bonds in full by exercising Nobina Europe’s right senior secured 1xed rate bonds in an aggregate amount of SEK in the terms and conditions to redeem the Bonds early. e $$) million (the Bonds), within a framework amount of SEK bonds will be redeemed with an amount corresponding to (() million, in order to re1nance an existing bond. e issuer’s the sum of (i) %)&5 of the Bonds’ principal amount, (ii) the obligations under the terms and conditions of the Bonds have accrued interest on the Bonds and (iii) the sum of the remain- been secured by a pledge of all of the shares in Nobina ing interest payments up to, and including, %& November Europe’s direct subsidiaries, Nobina Sweden, Swebus, Nobina +)%(. is will involve a payment of a premium by Nobina Finland, Nobina Norway, Nobina Danmark Holding ApS of SEK ** million and Nobina’s net indebtedness will conse- and Nobina Denmark in favour of the bondholders and their quently be reduced by SEK $$) million. A notice with infor- agent Nordic Trustee & Agency AB (publ). mation regarding the record date for the redemption and the e principal amount of each Bond is SEK % million. e redemption date will be sent to the bondholders not later than Bonds have a yearly coupon rate of *5 of the principal amount %$ banking days before the redemption date. and payment of interest is made semi-annually on %0 May and %0 November each year. No physical bonds have been issued as Credit facility the Bonds are registered with the account based system of In addition to the Bonds, Nobina Europe entered into a credit Euroclear Sweden AB (ISIN: SE)))$-'-$-*). Furthermore, facility agreement with Danske Bank on %) December +)%& the Bonds are admitted to trading on the corporate bond list with a total credit limit of SEK %$) million. e initial term at Nasdaq Stockholm under the short name NOBA %)0. e of the agreement expires on % December +)%$, but may be maturity date of the Bonds is %0 May +)%'. prolonged by %+ months at a time through mutual agreement. e terms and conditions of the Bonds contain certain As of +* February +)%$, SEK %* million of the total credit limit 1nancial and other covenants for Nobina Europe, which of SEK %$) million had been utilised. e utilised credit car- include restrictions in relation to the incurrence of new ries an interest rate of STIBOR ') –).$)5. Furthermore, the indebtedness, granting of new guarantees or security, disposal total credit limit is subject to interest at STIBOR ') ++.))5. of assets and subsidiary companies, payment of dividends, All interest falls due on 0% March, 0) June, 0) September and repurchase of own shares, redemption of share capital or any 0% December each year. Utilised credit falls due upon expiry other similar distribution or transfer of value to Nobina or its of the credit facility. Danske Bank is entitled to terminate the direct and indirect shareholders or any a8liate thereof. If the agreement early by giving six months’ notice. Danske Bank is covenants are not met, the agent has the right to terminate the further entitled to immediately terminate if Nobina Europe Bonds prematurely with immediate repayment to the bond- does not ful1l its obligations under the agreement. holders. e terms and conditions of the Bonds also include As continuing security for Nobina Europe’s obligations provisions which regulate other situations when the agent is under the credit facility, Nobina Sweden has granted a 7oat- entitled to declare all Bonds, including accrued interest, due ing charge of a total amount of SEK %$) million, in favour of and payable (so called default-provisions). e agent is entitled Danske Bank. Furthermore, Nobina, Nobina Europe and to such actions if, among other things, Nobina Europe does Nobina Sweden have undertaken to ensure that Nobina Sweden not ful1l its 1nancial or other covenants under the terms and has, at any given time, non-restricted equity of not less than conditions of the Bonds or is in a payment default. SEK $)) million. Should this not be the case, Danske Bank is Nobina Europe has a right to redeem the Bonds early, in entitled to, among other things, demand immediate repayment full, against payment of a premium of up to &5 of the Bonds’ of any utilised credit. principal amount, together with accrued, and in some situa- tions remaining, interest (applicable premium and interest payable is determined by when the early redemption takes place). If a change of control event occurs, each bondholder has a put option whereby Nobina Europe commits to redeem such Bonds at a price of %)%5 of the Bonds’ principal amount, together with accrued interest. e term change of control event includes a situation where one or more persons, not being a direct or indirect shareholder as of the issue date, acquires or controls, directly or indirectly, more than $)5 of the shares in Nobina Europe.

76 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) OPERATIONAL AND FINANCIAL REVIEW

Contractual obligations e table below sets forth the 1nancial payments that Nobina will be obligated to make, including under its debt instruments, as of +* February +)%$. As of AI February ABCF Due F Accrual of Due Due Due Due Due YAB/AC financial Total (SEK millions) FYCF/CZ FYCZ/C[ FYC[/CI FYCI/C\ FYC\/AB or later expenses liability

Bond loan and other external loan ^Y ^Y ^[ ^[ _`Z _[ –X` baa

Nobina leases a substantial part of its bus 7eet pursuant to 1nance lease agreements. e table below sets forth the present value of future minimum lease payments under the Company’s 1nance bus leases grouped by maturity date.

As of AI February ABCF Due Due QC Due QA Due QG Due QD Due Due Due FYC\/AB (SEK millions) FYCF/CZ FYCF/CZ FYCF/CZ FYCF/CZ FYCZ/C[ FYC[/CI FYCI/C\ or later Total

Future minimum lease payments XZZ ^ba Xf` X`f f_Z _^^ _[` X,[Zf Y,X[f Present value of future minimum lease payments XZf ^`_ Xf^ X`[ fX^ Yfa Yb` X,XXY [,`Za

In addition, Nobina leases a small part of its bus 7eet pursuant to operating lease agreements. Nobina has primarily employed 1nance leases since +))( and the remaining operating leases are currently being phased out as the contracts expire. e table below sets forth the present value of future minimum lease payments under the Company’s operating bus leases grouped by maturity date. As of AI February ABCF Due Due QC Due QA Due QG Due QD Due Due Due FYC\/AB (SEK millions) FYCF/CZ FYCF/CZ FYCF/CZ FYCF/CZ FYCZ/C[ FYC[/CI FYCI/C\ or later Total Future minimum lease payments X[ X^ X^ X^ Y` [_ ^Z X^` ^f_ Present value of future minimum lease payments X[ X^ X^ X^ YY [Y ^f XX[ ^`f

e table below sets forth aggregated minimum lease payments under Nobina’s other non-cancellable operating leases, including premises and vehicles (excluding buses). As of AI February ABCF Due Due Due Due CI/C\ (SEK millions) FYCF/CZ CZ/C[ C[/CI or later Total

Property rents XZb Xf^ X`a Xfa bXZ Lease payments for vehicles (excluding buses) Z f ^ – XZ Other operating leases ––––– Total nominal value of other operating leases YZT I]Z ITY IXZ \UX

Other financial obligations: pension obligations Off balance sheet arrangements For a description of certain pension plans and obligations, see Nobina leases a small part of its bus 7eet pursuant to operat- Note - and Note +% to Nobina’s audited consolidated 1nancial ing lease agreements. ese operating leases are accounted for statements as of and for FY%&/%$, FY%0/%& and FY%+/%0. included o# balance sheet. See “ —Key factors a&ecting Nobina’s results elsewhere in this Prospectus. of operations—Ability to estimate and manage risks and costs associated with the contracts”, “—Key Factors—Centralised +eet management and +eet #nancing—Operating leases ” and “— Key Factors—Contractual obligations .”

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 77 OPERATIONAL AND FINANCIAL REVIEW

QUANTITATIVE AND QUALITATIVE DISCLOSURES Translation exposure ABOUT FINANCIAL RISK Nobina’s and Nobina Europe’s currency exposure on transla- Liquidity risk tion of foreign subsidiaries is normally not hedged. A weaken- Liquidity risk is de1ned as the risk that cash and cash equiva- ing/strengthening of the SEK by %)5 when translating the lents are not available or that 1nancing cannot be obtained income statements of foreign subsidiaries would a#ect the when required. As of +* February +)%$, the Group had work- Group’s pro1t after 1nancial items by approximately SEK $ ing capital credit of SEK %$) million. million.

Interest risk Raw material risk Interest rate risk refers to the risk that 7uctuations in market e Group is exposed to 7uctuations in the prices of raw interest rates will negatively a#ect the Group’s net interest materials through its purchases of diesel. e raw material income. e rate at which interest rate 7uctuations a#ect net price accounts for less than half of the total diesel price and interest income depends on the 1xed interest period of the the remainder pertains to taxes, transports and re1nement. loans. e Group is primarily exposed to interest rate risk For regional tra8c, the Group is compensated for changes in through the company’s 1nancial and operating leases since the price of diesel fuel via a revenue index in its tra8c agree- the leasing fees are based on a variable market rate of interest. ments. e index baskets are relatively well matched with the An increase in the variable interest rate by one 5 would Group’s costs. But, due to the delay in index regulation, there increase the Group’s interest expense by SEK &% million before is a certain negative impact on earnings when costs increase. the e#ect of compensation through revenue indexation in the e Company had no outstanding diesel derivatives as of +* tra8c contracts. Interest rate risk is, however, partially com- February +)%$ and has not entered into any diesel derivatives pensated by the in7ation component of revenue indexation in during the periods under review, primarily because increases the tra8c contracts, and there is also an interest component in in fuel costs are generally covered by cost indexation provi- the index basket of some tra8c contracts. e Group’s bond sions in the Company’s PTA contracts. runs with 1xed coupon interest and thereby entails no interest rate risk. Indexation risk Since the contractual agreements require cost compensation Refinancing risk in accordance with agreed indices (including in7ation) that e Group is exposed to re1nancing risk, since Nobina do not quite follow cost trends in the industry, full compensa- Europe’s existing bond of SEK $$) million falls due on %0 May tion for cost increases is not received, as the industry’s costs +)%'. are rising faster than the compensation received via indexation from public transport authorities. Additionally, there is a Credit and counterparty risk certain delay in revenue compensation. Nobina’s 1nance policy states that credit risk shall be limited by only accepting counterparties with high credit ratings and SIGNIFICANT ACCOUNTING POLICIES through established limits. Commercial credit risks are limit- See Note % to Nobina’s audited consolidated 1nancial state- ed in that the Group has a diversi1ed customer base with high ments as of and for the years ended +* February +)%0, +)%& credit ratings, primarily comprising municipal and county and +)%$ included elsewhere in this Prospectus. council-owned public transport authorities. Provisions have been made for accounts receivable deemed to be doubtful and this has had an impact on operating pro1t/loss.

Currency risk Currency exposure arises in connection with payment 7ows in foreign currency (transaction exposure) and with the trans- lation of foreign subsidiaries’ income statements and balance sheets to SEK (translation exposure). e Group’s 1nance policy states that currency exposures may be hedged.

Transaction exposure Subsequent to the bond re1nancing in +)%&, the entire bond loan is 1nanced in SEK. e Group is also exposed to exchange rate 7uctuations through its purchases of diesel, which is traded in the international commodities markets in USD. is currency risk can be hedged by entering into diesel derivatives in local currency. e Company had no outstand- ing diesel derivatives as of +* February +)%$ and has not entered into any diesel derivatives during the periods under review, primarily because increases in fuel costs are generally covered by cost indexation provisions in the Company’s PTA contracts.

78 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) CAPITALISATION, INDEBTEDNESS AND OTHER FINANCIAL INFORMATION

CAPITALISATION, INDEBTEDNESS AND OTHER FINANCIAL INFORMATION

e table below sets forth our capitalisation and net indebted- As of +* February +)%$, Nobina’s direct and indirect contingent ness as of +* February +)%$. e information presented below liabilities, on a consolidated basis, were SEK (,+(( million. should be read in conjunction with “ Operational and #nancial For additional information on Nobina’s debts and liabilities, review ” and our consolidated 1nancial statements and the see Note +0 to Nobina’s audited consolidated 1nancial state- notes related thereto included elsewhere in this Prospectus. ments as of and for the years ended +* February +)%0, +)%& and +)%$ included elsewhere in this Prospectus. As of AI After completion of the O#er, the Company intends to use February (SEK million) ABCF SEK (0* million from the net proceeds, available to the Com- pany from its issue of new Shares, in order to repay the Bonds Capitalisation in full. e Company will repay the Bonds by exercising its Total current interest-bearing liabilities TUJ early redemption right under the terms and conditions. e Guaranteed X) `[Y Company’s net indebtedness will accordingly be reduced by Secured – SEK $$) million. e remaining net proceeds from the O#er Unguaranteed/unsecured – will be used to cover the costs of the Company’s existing incentive programmes. e participants in the management Total non-current interest-bearing liabilities U,XZI incentive programmes have undertaken to reinvest parts of the Guaranteed X) [,^[X ^) incentive payments into Shares by way of purchasing Shares in Secured _[Y the O#er. For this purpose, participants in the management Unguaranteed/unsecured [` incentive programme will be guaranteed an allocation of Total shareholders’ equity UIZ Shares in the O#er. See “ Corporate Governance—Compensa- Share capital ^^f tion for members of the Board of Directors and Group Manage- Paid-in capital ^,YfZ ment —Incentive programme ”. e table below sets forth the Reserves/retained earnings –^,Yab Company’s capitalisation and indebtedness as of +* February +)%$, assuming that the net proceeds from the O#er were Total capitalisation J,\JW available to the Company as of that date and adjusted for the events described above, in order to illustrate how the Compa- Net indebtedness ny’s 1nancial position would have been on +* February +)%$, [A] Cash Y_[ should these events have occurred on that date. [B] Cash equivalents – [C]Restricted bank accounts XX_ [D] Liquidity [A]+[B]+[C] WTX

[E]Current financial receivable –

[F] Current bank debt – [G] Current portion of non-current debt `[Y [H] Other current financial debt – [I] Current financial debt [F]+[G]+[H] TUJ

[J] Net current financial indebtedness [I]–[E]–[D] TT

[K] Non-current bank loans [L] Bonds issued __a [M]Other non-current loans [,^_X

[N] Non-current financial indebtedness [K]+[L]+[M] U,XZI

[O] Net financial indebtedness U) [J]+[N] U,XT\

X) Finance lease contracts guaranteed by Nobina. ^) The Bonds secured by a pledge of all the direct subsidiaries of Nobina Europe. [) Net financial indebtedness includes SEK [,`ZZ million related to buses operated under finance lease contracts.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 79 CAPITALISATION, INDEBTEDNESS AND OTHER FINANCIAL INFORMATION

Costs related to As of Receipt of net the management As of AI February proceeds from the incentive Redemption AI February ABCF, (SEK million) ABCF Offer G), D) programme of Bonds after adjustments

Share capital X) ^^f b` – – [aY Reserves/retained earnings f^ `Zf –X[Y –XaY `) _Y^ Total shareholders’ equity UIZ \\J –IUJ –IZJ XJT

Interest-bearing liabilities Y,Y[_ – – –_[Y b) [,ZaX Total interest-bearing liabilities Y) J,JUW – – –WUJ U,]ZI

Cash and cash equivalents Y_[ bbY –Xb^ _) –`[f `) YXb Restricted bank accounts XX_ – – – XX_ Current financial receivable – – – – – Net financial indebtedness U,XT\ – – – U,UT]

X) The annual general meeting held on ^b May ^aX_ resolved upon a X:Xa Reverse Share Split, i.e., ten (Xa) Shares will be exchanged into one (X) Share whereby the quota value of the Shares will increase from SEK a.[` to SEK [.`a and the number of Shares will decrease from `[[,__`,f^[ to `[,[__,`f^. As at the date of this Prospectus, the Reverse Share Split has not yet been registered with the Swedish Companies Registration Office, but registration is expected to occur on or around f June ^aX_. See “ Share capital and ownership structure ”. ^) Interest-bearing liabilities includes SEK [,`ZZ million related to buses operated under finance lease contracts. [) Assuming gross proceeds of SEK f_a million, reduced by expected transaction costs related to the Offer of SEK b` million. SEK [b million of transaction costs will be recorded in the income statement in the first quarter of FYX_/X` and SEK [Z million will be paid through the shareholders’ equity. Y) Includes receipt of proceeds from reinvestments in the Offer pursuant to the management incentive programme. _) Includes SEK [f million of deferred tax. The management incentive programme will be paid out in full in connection with the Offer to enable reinvestments in the Offer, SEK __ million will be recorded as a personnel expense in QX of FYX_/X` and SEK XXb million will be recorded as a personnel expense in Q^ of FYX_/X`. `) The cost related to early redemption of the Bonds amounts to SEK ff million in premium and SEK X` million in capitalised up-front fees. Consequently, the total cash outflow for redemption of the Bonds is SEK `[f million (the principal amount of SEK __a million and SEK ff million in premium payment). b) SEK X` million of capitalised up-front fees are accounted for net against the Bonds, resulting in a net liability of SEK _[Y million.

Except as set forth above or in “ Operational and #nancial decrease the Company’s 1nancial expenses and a#ect the review ,” there has not been any signi1cant change to the Com- Company’s cash 7ows. Assuming that the net proceeds from pany’s capitalisation or indebtedness since +* February +)%$. the O#er were available to the Company and the Bonds had Repayment of the Bonds in full, and the resulting reduc- been repaid in full on % March +)%&, the e#ect on the Com- tion of the Company’s net 1nancial indebtedness, will pany’s results for FY%&/%$ would have been as follows:

For the financial year CD/CF (SEK million) Actual As adjusted % change

Income statement Financial expense –^[f –XYZ –[f Profit/loss before tax (EBT) XYX ^[a X`[

For the financial year CD/CF (SEK million) Actual As adjusted % change

Cash flows Borrowing expenses –Xf – – Interest paid –^X[ –XYX –[Y Total interest and other financial expenses paid –YUI –IJI –UX

80 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) BOARD OF DIRECTORS, MANAGEMENT AND AUDITORS

BOARD OF DIRECTORS, MANAGEMENT AND AUDITORS

BOARD OF DIRECTORS indirectly, has extensive business contacts or other extensive According to the Company’s Articles of Association, the 1nancial dealings with the Company. An overall assessment Board of Directors shall consist of three to ten members of a Board member’s relationship to the Company shall be elected by the shareholders at a general meeting. e Board made in each individual case. As regards the composition of of Directors currently consists of six members elected by the the Company’s Board of Directors, all members, except for annual general meeting held on +- May +)%$ for the period Ragnar Norbäck who is also the Group’s Chief Executive until the end of the annual general meeting +)%(. O8cer, are considered independent of the Company and Pursuant to requirements of the Swedish Code of Corpo- Group Management. rate Governance (the “ Code ”) more than half of the members e table below sets out the members of the Board of of the Board of Directors elected by the general meeting must Directors, their year of birth, the year of their initial election, be independent of the Company and the Group’s manage- their position, whether or not they are considered to be inde- ment. is requirement does not apply to employee represent- pendent, as de1ned in the Code in relation to the Company atives. ere is no de1ned standard as to what is meant by and Group Management as well as in relation to principal “independent” but the independence of a member of the shareholders, and their shareholdings in the Company as of Board of Directors may be questioned, for example, in cases the date of this Prospectus. where the member of the Board of Directors, directly or

Member of Independent of Independent of Year of the Board of the Company and principal Shareholding in Name birth Directors since Position Group management shareholders the Company * Jan Sjöqvist XZYf ^aa_ Chairman Yes Yes X,`_Z,_f[ Birgitta Kantola XZYf ^aaZ Member Yes Yes – John Allkins XZYZ ^aX[ Member Yes Yes – Gunnar Reitan XZ_Y ^aX^ Member Yes Yes – Graham Oldroyd XZ`X ^aXY Member Yes Yes – Ragnar Norbäck XZ__ ^aXY Member No Yes [,_X^,bZ`

* Refers to the number of shares before the Reverse Share Split. See further ” Corporate Governance—Compensation for members of the Board of Directors and Group Manage- ment—Incentive Programme ” for further information about the members of the Board of Directors’ and Group Management’s re-investment of Shares under the manage- ment incentive programme and John Allkins intention to purchase additional Shares in the Offer.

Jan Sjöqvist Birgitta Kantola Born %'&*. Born %'&*. Chairman of the Board of Directors since +))$. Member of the Board of Directors since +))'. Other assignments: Industrial Advisor to Valedo Partners Other assignments: Director of Skandinaviska Enskilda Fund AB. Chairman of Aditro Logistics AB. Director of Käv- Banken AB (publ). linge Centrumutveckling AB, K() Förvaltnings AB, Aditro Previous assignments held during the past 've years: Logistics Holding AB and Portendo Stando# Detection AB. Director of Stora Enso Oyj and OMX Group, Inc. Previous assignments held during the past 've years: Dependence status: Independent in relation to Nobina, its Chairman of STRABAG Sverige AB, Utveckling i Noresund management and principal shareholders. AB and Ektorp Exploatering AB. Director of Green Cargo AB Education: LLM, University of Helsinki. Degree in and Aspen i Jönköping AB Economics, Commercial College of Vaasa. Dependence status: Independent in relation to Nobina, its Shareholding: –. management and principal shareholders. Education: MSc., Gothenburg School of Business, Economics John Allkins and Law. Born %'&'. Shareholding: %,($',$*0. Member of the Board of Directors since +)%0. Other assignments: Director of Punch Taverns plc, Renold plc and Fairpoint Group plc. Previous assignments held during the past 've years: Director of Volex plc, Linpac Group Ltd, Linpac Senior Holdings Ltd, Linpac Finance (No. 0) Ltd, Albemarle & Bond Holdings plc, Molins plc and Intec Telecom Systems Ltd. Dependence status: Independent in relation to Nobina, its management and major shareholders. Education: BA, En1eld College of Technology, Middlesex. Fellow of the Institute of Cost and Management Accountants. Shareholding: –. INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 81 BOARD OF DIRECTORS, MANAGEMENT AND AUDITORS

Gunnar Reitan Ragnar Norbäck Born %'$&. Born %'$$. Member of the Board of Directors since +)%+. Member of the Board of Directors since +)%&. Other assignments: Director of Bio Energy AS. Other assignments: Chairman or Director of a number of the Previous assignments held during the past 've years: Group’s subsidiaries. Chairman of RALT AB. Director of N0 Chairman of Strata Marine & O#shore AS. Group AB and Skofemman AB. Member of the K+ Research Dependence status: Independent in relation to Nobina, its Institute. management and principal shareholders. Previous assignments held during the past 've years: Education: MSc. Economics, Trondheim Business School. Director of Nilson Group AB and Alpus AB. Shareholding: –. Dependence status: Dependent in relation to Nobina and its management. Independent in relation to principal share- Graham Oldroyd holders. Born %'(%. Education: MSc. Engineering and Logistics, Chalmers Member of the Board of Directors since +)%&. Institute of Technology. Other assignments: Director of PHS Group Investments Shareholding: 0,$%+,-'(. Limited and Henderson Value Trust plc. Senior Adviser at Downing LLP and MCF Corporate Finance. Commissioner of the Church of England Commissioners. Previous assignments held during the past 've years: Partner at Bridgepoint Advisers Ltd. Director of Bridgepoint Advisers Holdings Ltd and Bridgepoint Private Equity Ltd. Geshäfts- führer of Bridgepoint GmbH. Dependence status: Independent in relation to Nobina, its management and principal shareholders. Education: MA Engineering, Cambridge University and MBA, INSEAD Business School. Shareholding: –.

GROUP MANAGEMENT e table below sets out the name, year of birth, current position, the year each person became a member of the Group Manage- ment, and their shareholdings in the Company as of the date hereof.

Group Manager Shareholding in Name Year of birth since Position the Company * Ragnar Norbäck XZ__ ^aaY Chief Executive Officer [,_X^,bZ` Per Skärgård XZ_b ^aaY Chief Financial Officer Zab,_bY Jan Bosaeus XZ`a ^aa^ Head of Regional Traffic and Managing Director of Nobina Sweden ``a,XY` Peter Hagert XZ`a ^aXX Director of Human Resources – Joakim Palmkvist XZ`[ ^aa` Head of Interregional Traffic and Managing Director of Swebus ^XX,`a^ Philipp Engedahl XZb^ ^aX^ Managing Director of Nobina Norway – Tom Ward XZ_` ^aaY Managing Director of Nobina Fin- land ^aZ,Yba Niels Peter Nielsen XZ`_ ^aXX Managing Director of Nobina Denmark – Annika Kolmert XZb[ ^aaf Head of Processes X,``b Martin Pagrotsky XZbY ^aa` General Counsel Y^,[^` Stina Thorman XZ`_ ^aX_ Head of Communications and IR –

* Refers to the number of shares before the Reverse Share Split. See further ” Corporate Governance–Compensation for members of the Board of Directors and Group Manage- ment–Incentive Programme ” for further information about the members of the Board of Directors’ and Group Management’s re-investment of Shares under the management incentive programme in the Offer.

82 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) BOARD OF DIRECTORS, MANAGEMENT AND AUDITORS

Ragnar Norbäck Tom Ward Born %'$$. Born %'$(. Chief Executive O8cer since +))&. Managing Director of Nobina Finland Oy since +))&. See further “ —Board of Directors ”. Other assignments: Director of a Group subsidiary. Director of Arbetsgivareförbund and Bussförbundet. Per Skärgård Previous assignments held during the past 've years: –. Born %'$-. Education: Bachelor of Commerce, Commercial College of Chief Financial O8cer since +))&. Lahti. Other assignments: Chairman or director of a number of Shareholding: +)',&-). the Group’s subsidiaries. Partner of Accord Promotion Handelsbolag. Niels Peter Nielsen Previous assignments held during the past 've years: –. Born %'($. Education: MSc. Business and Economics, Stockholm Managing Director of Nobina Danmark A/S since +)%%. University. Other assignments: Director of a Group subsidiary. Shareholding: ')-,$-&. Director of the Federation of Road Transport. Previous assignments held during the past 've years: Jan Bosaeus Operations Manager at Nobina Danmark A/S and Arriva Born %'(). A/S. Duty Manager at Arriva A/S. Head of Operations of Head of Regional Tra8c since +)%0 and Managing Director (Railfreight) DSB. at Nobina Sweden since +))+. Education: Business Diploma. Other assignments: Director of several of the Group’s subsidi- Shareholding: –. aries. Chairman of Sveriges Bussföretag Service AB. Director of Transportföretagen TF AB, X+ Kollektivtra1k AB, Alecta’s Annika Kolmert Council of Administration. Deputy Director of Ideella före- Born %'-0. ningen Svenskt Näringsliv med 1rma Svenskt Näringsliv Head of Processes since +))*. (non-pro1t). Other assignments: Director of How In Kvalitetsutveckling AB. Previous assignments held during the past 've years: Previous assignments held during the past 've years: –. Director of Buss and Samhälle i Sverige ek. för. Education: MBA, Stockholm University. Education: Business Administration, IHM Business School. Shareholding: %,((-. Shareholding: ((),%&(. Martin Pagrotsky Peter Hagert Born %'-&. Born %'(). General Counsel since +))(. Director of Human Resources since +)%%. Other assignments: Director of a number of the Group’s Other assignments: Director of Care & Career Consulting, subsidiaries. CCC, AB and Taggen Miljö och Landskap AB. Previous assignments held during the past 've years: –. Previous assignments held during the past 've years: Education: LLM, Stockholm University. Director of Human Resources at Amex Bank of Canada. Shareholding: &+,0+(. Education: Business and Economics BA, Stockholm School of Economics. Stina Thorman Shareholding: –. Born %'($. Head of Communications and IR since +)%$. Joakim Palmkvist Other assignments: Chairman of Agea AB. Head of IR and Born %'(0. PR consulting team at Intellecta Corporate. Head of the Interregional Tra8c since +)%) and Managing Previous assignments held during the past 've years: Vice Director of Swebus since +))(. president of Corporate Communications at Elekta AB. Other assignments: Director of Samtra1ken i Sverige AB. Education: Bachelor of Economics, Umeå and Stockholm Previous assignments held during the past 've years: –. University. Education: Business Administration, IHM Business School. Shareholding: –. Shareholding: +%%,()+.

Philipp Engedahl Born %'-+. Managing Director of Nobina Norge AS since +)%+. Other assignments: Director of NHO Transport. Previous assignments held during the past 've years: Director of CargoNet AS. CEO of Transportsentralen Oslo AS. Chief Supply Chain O8cer of Dooria AS. Education: Diplom Kaufmann in Administration, University of Mannheim, Germany Shareholding: –.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 83 BOARD OF DIRECTORS, MANAGEMENT AND AUDITORS

Other information on the Board of Directors and EXTERNAL AUDITOR Group Management e most recent auditor election was at the annual general All members of the Board of Directors and Group Management meeting +)%$, when PricewaterhouseCoopers AB was re-elected may be contacted at the Company’s address Armégatan 0*, as the Company’s auditor for the period until the end of the %-% -% Solna, Stockholm. annual general meeting +)%(. Michael Bengtsson, authorised Except as set out below, there have not, during the past 1ve public accountant and member of FAR, the Swedish Institute years, been any allegations and/or sanctions on the part of any for Authorised and Approved Public Accountants, is the authority or professional association under public law against auditor-in-charge. PricewaterhouseCoopers AB has been the any of these persons. No member of the Board of Directors or Company’s auditor since the annual general meeting +)%&. Group Management has represented a company which has PricewaterhouseCoopers AB’s o8ce address is Torsgatan +%, been declared bankrupt or 1led for liquidation in the past 1ve %%0 '- Stockholm, Sweden. years. No member of the Board of Directors or Group Man- Prior to the +)%& annual general meeting, Ernst & Young agement has been convicted in any case relating to fraud in AB (with Erik Åstrom, authorised public accountant and the past 1ve years. No member of the Board of Directors or member of FAR, the Swedish Institute for Authorised and Group Management has in the past 1ve years been subject to Approved Public Accountants, as the auditor-in-charge) was injunctions against carrying out business. No special arrange- the Company’s auditor. Ernst & Young AB’s o8ce address is ment has been entered into between major shareholders, Jakobsbergsgatan +&, %)0 '' Stockholm, Sweden. clients, suppliers or other parties according to which any of the members of the Board of Directors or Group Management have been appointed to their present position. On & May +)%%, Birgitta Kantola purchased 0,))) shares in Skandinaviska Enskilda Banken AB (publ) (“ SEB ”) as part of the reinvestment policy of SEB’s board of directors. e pur- chase was arranged by a Finnish bank o8ce, acting as an intermediary, and the shares were transferred to Birgitta Kantola’s Finnish securities account. Due to di#erences between the reporting systems in Finland (where the report- ing is automatic) and Sweden (where a noti1cation is required), Birgitta Kantola did not report her purchase of shares in SEB to the SFSA within the statutory period set forth in the Swedish Act concerning Reporting Obligations for Certain Holdings of Financial Instruments (+))):%)*-), as a result of which the SFSA imposed a special charge. No member of the Board of Directors or Group Manage- ment has any private interest that might con7ict with the Company’s interest. However, certain members of the Board of Directors and Group Management have certain 1nancial interests in the Company as a consequence of their holdings of Shares. ere are no family ties between members of the Board of Directors or Group Management.

84 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

Prior to listing on Nasdaq Stockholm, the corporate govern- their own names in the register of shareholders maintained by ance of the Company has been based upon Swedish law and Euroclear Sweden, in order to be entitled to participate in the internal rules and guidelines. Once listed on Nasdaq Stock- general meeting. Shareholders should inform their nominees holm, the Company will also comply with Nasdaq Stock- well in advance of the record date. holm’s Rule Book for Issuers and the Code. Nobina Europe Shareholders may attend general meetings in person or by has had bonds listed on Nasdaq Stockholm since +)%+ and has proxy and may be accompanied by a maximum of two assis- therefore complied with Nasdaq Stockholm’s Rule Book for tants. It will normally be possible for shareholders to register Issuers since +)%+. for the general meeting in several di#erent ways, as indicated e Code applies to all Swedish companies whose shares in the notice of the meeting. are listed on a regulated market in Sweden and is to be fully applied from the date of the 1rst annual general meeting held Shareholder initiatives the year after listing. Companies are not obliged to apply eve- Shareholders who wish to have an issue brought before the ry rule in the Code, but are permitted the freedom to choose general meeting must submit a request in writing to the Board alternative solutions which they consider are better in the of Directors. e request must normally be received by the company’s particular circumstances, provided they report Board of Directors no later than seven weeks prior to the every deviation, describe the alternative solution and explain general meeting. the reasons for the deviation in their annual corporate govern- ance reports (the “comply or explain” principle). e Company NOMINATION COMMITTEE has previously voluntarily complied with the Code in certain Under the Code, the Company shall have a nomination respects and intends to fully comply with the Code once listed committee, the purpose of which is to make proposals at the on Nasdaq Stockholm. To the extent that there are any future annual general meeting in respect of the chairman at general deviations, these will be described in the Company’s annual meetings, Board member candidates including the Chairman, corporate governance report. fees and other remuneration of each Board member as well as remuneration for committee work, election of and remunera- GENERAL MEETINGS tion for the auditor, and, to the extent deemed necessary, pro- Pursuant to the Swedish Companies Act, the general meeting posals for amendments to the instructions for the nomination is the Company’s highest decision-making body and share- committee. holders exercise their voting rights at such meetings. e At the annual general meeting held on +- May +)%$, it was annual general meeting must be held within six months from resolved that the Nomination Committee shall be composed the end of each 1nancial year. In addition to the annual gener- of representatives of the three largest shareholders or group al meeting, extraordinary general meetings may be convened. of shareholders listed in the share register maintained by e Company’s general meetings will be held in Stockholm or Euroclear Sweden on the last banking day in September +)%$, in Solna, Sweden. together with the Chairman of the Board of Directors. In the In accordance with the Articles of Association, notices event that any of the three largest shareholders decides to convening general meetings will be issued through announce- abstain from the right to appoint a representative to the ment in the Swedish Gazette ( Sw. Post- och Inrikes Tidningar ) Nomination Committee, this right shall transfer to the share- as well as on the Company’s website. Announcement to holder that has the next largest shareholding on the aforemen- the e#ect that a notice convening a general meeting has been tioned date. e names of the members of the Nomination issued will be made in Dagens Industri. A press release in Committee and of the shareholders they represent shall be Swedish and English with the notice in its entirety will be made public no later than six months prior to the annual issued ahead of each general meeting. general meeting. e mandate period of the Nomination Committee shall extend until the next nomination committee Right to attend general meetings is appointed. If the members of the Nomination Committee All shareholders who are directly recorded in the share register do not agree otherwise, the member representing the largest maintained by Euroclear Sweden 1ve weekdays (Saturdays shareholder on the basis of the number of votes held shall be included) prior to the general meeting and who have noti1ed appointed as chairman of the Nomination Committee. In the the Company of their intention to participate in the general event that a shareholder who has appointed a member ceases meeting not later than the date indicated in the notice of the to be one of the three largest shareholders during the mandate general meeting, are entitled to attend the general meeting period of the Nomination Committee, the appointed member and vote for the number of shares they hold. shall resign and be replaced by a new member in accordance In addition to notifying the Company, shareholders whose with the above procedures. However, unless there is speci1c shares are nominee registered through a bank or other nominee reason, no changes shall occur in the composition of the must request that their shares are temporarily registered in Nomination Committee if only minor changes in ownership

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 85 CORPORATE GOVERNANCE

have occurred or if changes occur later than two months prior tion and other employment terms for the Group Management; to the annual general meeting. A shareholder, which has (b) monitor and to evaluate current remuneration structures, appointed a member of the Nomination Committee, has the remuneration levels and programs for variable remuneration right to dismiss the member so appointed and appoint a new to the Group Management; and (c) to monitor and evaluate member. Changes in the composition of the Nomination the outcome of variable compensation schemes and the Com- Committee shall be made public on the Company’s website. pany’s compliance with remuneration guidelines adopted by e nomination committee shall perform its duties in the general meeting. accordance with the Code. At the request of the nomination committee, the Company shall provide personnel resources, Audit Committee such as a secretarial function in the nomination committee, to According to the Code, the Audit Committee is to comprise facilitate its work. If and as required, the Company shall also at least three members of whom the majority are to be inde- reimburse the nomination committee for reasonable costs for pendent in relation to the Company and Group Management, external consultants that the nomination committee considers and at least one of the members that are independent in rela- necessary for it to be able to ful1l its duties. tion to the Company and its Group Management must also be independent in relation to the Company’s principal share- THE BOARD OF DIRECTORS’ RESPONSIBILITIES holders and have accounting or auditing competence. e AND WORK Audit Committee currently has three members, John Allkins e Board of Directors is the highest decision-making body (Chairman), Birgitta Kantola and Gunnar Reitan, all of after the shareholders at the general meeting. whom are considered independent in relation to the Com- e duties of the Board of Directors are provided for in the pany, Group Management and principal shareholders. Swedish Companies Act, the Articles of Association and the e Audit Committee shall, without any impact otherwise Code, the latter of which will be applicable to the Company on the tasks and responsibilities of the Board of Directors: (a) after the listing of the Shares on Nasdaq Stockholm. In addi- monitor the Company’s 1nancial reporting; (b) in respect of tion to this, the work of the Board is guided by the rules of the 1nancial reporting, monitor the e#ectiveness of the Com- procedures for the Board of Directors, which the Board of pany’s internal control, internal audit, and risk management; Directors adopts every year. ese rules govern the division (c) keep itself informed of the audit of the annual report and of work and responsibility among the Board of Directors, its Group accounts; (d) review and monitor the impartiality and Chairman and the Chief Executive O8cer. e Board of independence of the auditor, giving particular attention to if Directors also adopts instructions for the Board committees the auditor provides the Company with services other than and the Chief Executive O8cer. auditing services; and (e) assist in preparation of proposals to e Board of Directors’ tasks include adopting strategies, the general meeting’s resolution regarding the election of the business plans and budgets, interim report and year-end auditor. 1nancial statements and setting policies and guidelines. e Board of Directors is also required to follow economic devel- THE CHIEF EXECUTIVE OFFICER AND opments and ensure the quality of 1nancial reporting and SENIOR EXECUTIVES internal controls and evaluate operations on the basis of the e Chief Executive O8cer is subordinated to the Board of objectives and guidelines set by the Board of Directors. Finally, Directors and is responsible for the everyday management and the Board of Directors decides on major investments and operations of the Company. e division of work between the changes in the organisation and activities of the Company. Board of Directors and the Chief Executive O8cer is set out e Chairman of the Board of Directors shall, in close collab- in the rules of procedure for the Board of Directors and the oration with the Chief Executive O8cer, monitor the Com- instructions for the Chief Executive O8cer. e Chief Execu- pany’s performance and prepare and chair Board meetings. tive O8cer is also responsible for the preparation of reports e Chairman is also responsible for ensuring that the Board and compiling information to Board meetings and for pre- of Directors evaluates its work each year and always receives senting such material at Board meetings. the information necessary to perform its work e#ectively. According to the instructions for 1nancial reporting, the Chief Executive O8cer is responsible for the 1nancial report- BOARD COMMITTEES AND COMMITTEE WORK ing in the Company and consequently must ensure that the e Board of Directors has two committees: the Remunera- Board of Directors receives adequate information for the tion Committee and the Audit Committee. Board of Directors to be able to evaluate the Company’s 1nan- cial condition. Remuneration Committee e Chief Executive O8cer must continually keep the According to the Code, the members of the Remuneration Board of Directors informed of developments in the Compa- Committee shall be independent in relation to the Company ny’s operations, the Company’s results and 1nancial condi- and Group Management. e Remuneration Committee tion, liquidity and credit status, important business events and currently has two members: Jan Sjöqvist (Chairman) and all other events, circumstances or conditions which can be Graham Oldroyd, both of whom are considered independent assumed to be of signi1cance to the Company’s shareholders. in relation to the Company and Group Management. e Remuneration Committee’s main tasks are to: (a) prepare the Board of Directors’ decisions on issues relating to compensa-

86 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) CORPORATE GOVERNANCE

COMPENSATION FOR MEMBERS OF THE BOARD OF e pension shall consist of a de1ned-contribution pension DIRECTORS AND GROUP MANAGEMENT plan, with pension premiums amounting to a maximum of Compensation for members of the Board of Directors 0)5 of the pensionable salary, which are to be paid for as long and Board Committees as the employment remains. Members of Group Management At the annual general meeting held on +- May +)%$, it was employed in a country other than Sweden shall have pension resolved that for the period until the end of the next annual agreements in line with national practices and that follow the general meeting, the compensation for the Board of Directors principles described above. shall amount to SEK ')),))) for the Chairman and SEK Other customary bene1ts are to be of limited value in rela- &$),))) for each of the other members elected by the annual tion to the total remuneration and are to be in line with com- general meeting, provided, however, that no compensation mon market terms. shall be paid to a member who is also an employee of the In the event of termination of employment, senior execu- Company or any of its subsidiaries. As regards compensation tives (being the Chief Executive O8cer, Chief Financing for committee work, it was resolved that no such compensa- O8cer, presidents of subsidiaries and other positions report- tion should be paid. ing directly or indirectly to the Chief Executive O8cer) are In FY%&/%$, the total compensation for members of the entitled to a maximum of %+ months’ compensation. As a Board of Directors amounted to SEK +,-)),))), as illustrated basic principle, a six-month mutual termination period applies by the below table. between the Company and the relevant senior executive. In addition, a maximum of six months of remuneration is Name Role Board fee (SEK) payable should employment be terminated by the Company. Jan Sjöqvist Chairman Zaa,aaa e Board of Directors shall have the right to deviate from Birgitta Kantola Member Y_a,aaa the above guidelines if, in an individual case, special circum- stances exist. John Allkins Member Y_a,aaa Gunnar Reitan Member Y_a,aaa Current terms of employment for the Chief Executive Graham Oldroyd Member Y_a,aaa Officer and other members of the Group Management Ragnar Norbäck Member – Remuneration Total Y,\ZZ,ZZZ Remuneration and other bene1ts for the Chief Executive O8cer and other members of Group Management consist of Guidelines for remuneration of the Chief Executive 1xed salary as well as variable compensation, pension and Officer and other members of the Group Management other customary bene1ts. At the annual general meeting held on +- May +)%$, it was In FY%&/%$, the total remuneration to the Chief Executive resolved that the following guidelines for remuneration to the O8cer amounted to SEK '.- million, of which SEK &.' mil- Chief Executive O8cer and other members of the Group lion consisted of 1xed salary and SEK &.* million of variable Management for the period until the end of the annual general salary %) . In addition, the pension premiums to the Chief Exec- meeting +)%(. e guidelines apply to agreements concluded utive O8cer amounted to SEK %.0 million. after such annual general meeting. In FY%&/%$, the total remuneration to Group Management, e remuneration for the Group Management shall consist excluding the Chief Executive O8cer, amounted to SEK ++.& of 1xed salary, variable remuneration, pension, other custom- million. In addition, the aggregate amount for pensions that ary bene1ts and severance pay (if any). e total remuneration was provided for and accrued was SEK &.* million package shall be in line with market terms, be competitive and re7ect the employee’s performance and responsibilities. e Pension and other benefits remuneration principles shall motivate the Group Manage- e Chief Executive O8cer and the other members of Group ment to enhance the Group’s market position and earnings Management are entitled to pension, health insurance and and be linked to the creation of shareholder value on a long- other bene1ts. e management is either entitled to pension term basis. bene1ts according to company policy or individual agree- e variable remuneration may comprise annual incentives ment. e Chief Executive O8cer’s pension premium for in cash and long-term incentives in cash, Shares and/or share- FY%$/%( is 0)5 of the annual salary. based instruments in Nobina. Variable salary in cash is condi- e Chief Executive O8cer is obliged to retire at the age tional upon the ful1lment of de1ned and measurable targets of (+. ereafter, the Chief Executive O8cer is entitled to and should be maximised in relation to the 1xed salary. Long- receive an early retirement pension from the Company, term incentives in the form of Shares and/or share-based expressed as a percentage of his 1xed annual salary at the time instruments in Nobina may be provided through participa- of retirement. e early retirement pension corresponds to tion in long-term incentive programs approved by a general ')5 of his 1xed annual salary until the age of (0; *)5 of his meeting. e terms and conditions for variable remuneration 1xed annual salary until the age of (&; and -)5 of his 1xed should be designed so that the Board of Directors, if excep- annual salary until the age of ($. tional economic circumstances prevail, may limit or refrain from payment of variable remuneration if such measure is considered reasonable.

%) In addition to the speci1ed compensation for the CEO, equity compensation of a total of approximately SEK 0.* million (including social security contributions and taxes) has also accrued but has not yet been settled. is relates to a previous incentive scheme and is subject to vesting upon approval at the AGMs in +)%( and +)%-.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 87 CORPORATE GOVERNANCE

Notice of termination AUDITING Each of the Chief Executive O8cer and the other members e external audit of the accounts of the Company and its of Group Management has a notice period of six months. subsidiaries, as well as the management by the Board of Direc- In addition, where the relevant contract of employment is tors and Group Management, is conducted in accordance terminated by the Group, the following members of Group with generally accepted auditing standards in Sweden. e Management are entitled to certain severance payments: each external auditor attends at least one Board meeting per year at of Phillip Engedahl, Niels Peter Nielsen, Jan Bosaeus and which the auditor goes through the audit for the year and dis- Joakim Palmkvist are entitled to severance pay corresponding cusses the audit with the members of the Board of Directors, to six months 1xed salary; Tom Ward is entitled to severance without the Chief Executive O8cer or any member of Group pay corresponding to three times his monthly compensation, Management being present. e Audit Committee reviews including bene1ts; and Peter Hagert is entitled to severance and monitors the external audit process and, in particular, the pay corresponding to six times his monthly compensation. independence of the Company’s auditor. e auditor receives compensation for its work in accordance with a resolution by Incentive programme the annual general meeting. For additional information, see e Company has a management incentive programme the note $ to the Company’s audited consolidated 1nancial state- members of the Group Management (including the Chief ments as of and for FY%&/%$ included in this Prospectus. Executive O8cer) and a management incentive programme for members of the Board of Directors (excluding the Chief Executive O8cer). e Company’s aggregate cost for these two programmes amount to SEK %-+ million (including social security contributions and taxes), of which the Group Man- agement will be entitled to an aggregate amount of approxi- mately SEK %++ million (excluding social security contribu- tions and taxes) and the Board of Directors will be entitled to an aggregate amount of approximately SEK %% million (exclud- ing social security contributions and taxes). Payment will be made in connection with the closing of the O#er and, to that end, the participants in both programmes have undertaken to reinvest an amount equivalent to -$5 of the amount paid (net of tax) into Shares by way of purchasing Shares in the O#er. For this purpose, participants in the management incentive programme will be guaranteed an allocation of Shares in the O#er. Assuming a price at the mid-point of the O#er Price Range, members of the Group Management and the Board of Directors will purchase a total of %,+&',0%$ Shares. e pur- chased Shares will be subject to lock-up undertakings. See further “ Plan of distribution—Lock-up arrangements ”. In addition, John Allkins, a director of the Company, has expressed an intention to acquire, in addition to the Shares he purchases by way of re-investment under the management incentive programme, such additional number of Shares in the O#er as will amount to a total of SEK -)),))), of which the number of Shares will be determined based on the 1nal price of the O#er. ese Shares will also be subject to a lock- up undertaking.

88 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) SHARE CAPITAL AND OWNERSHIP STRUCTURE

SHARE CAPITAL AND OWNERSHIP STRUCTURE

Under the Company’s Articles of Association, the share capital Rights to dividend and liquidation proceeds must be no less than SEK %)),))),))) and no more than SEK All Shares carry equal rights to dividends as well as to the &)),))),))) divided in to at least +$),))),))) but no more Company’s assets and potential surplus in the event of liquida- than %,))),))),))) shares. At the annual general meeting of tion. the Company of +- May +)%$, in connection with the Reverse Resolutions regarding dividends are passed by general Share Split, it was resolved to amend the number of shares meetings. All shareholders registered as shareholders in the permitted under the Company’s Articles of Association to no share register maintained by Euroclear Sweden on the record less than (),))),))) and no more than +&),))),))) Shares. date adopted by the general meeting are entitled to receive e new Articles of Association were registered with the dividends. Dividends are normally distributed to shareholders Swedish Companies Registration O8ce on +' May +)%$. As at as a cash payment per share through Euroclear Sweden, but the date of this Prospectus, the Company has only one class of may also be paid out in a manner other than cash (in-kind shares, the Shares, of which a total of (00,$$(,*+0 are in issue, dividend). If shareholders cannot be reached through Euro- denominated in SEK with a quota value of SEK ).0( each. In clear Sweden, such shareholder still retains its claim on the connection with the O#er, the number of Shares will change. Company to the dividend amount, subject to a statutory limi- See further “ —Share capital history ”. tation of ten years. Upon the expiry of the limitation period, All Shares have been issued pursuant to Swedish law. All the dividend amount shall pass to the Company. issued Shares have been fully paid and are freely transferrable. ere are no restrictions on the right to dividends for e Shares are registered in a CSD register in accordance shareholders domiciled outside Sweden. Payments to share- with the Swedish Financial Instruments Accounts Act ( Sw. lag holders not resident in Sweden for tax purposes are subject to ()778:)/(7) om kontoföring av #nansiella instrument ). e Swedish withholding tax. See further “ Tax considerations in Shares are cleared through the electronic securities system Sweden ”. operated by Euroclear Sweden, the Swedish central securities depository (Euroclear Sweden AB, P.O. Box %'%, SE-%)% +0 SHARE CAPITAL HISTORY Stockholm, Sweden). No share certi1cates are issued with e table below summarises the historic developments in the respect to the Shares. e ISIN code for the Shares is Company’s ordinary share capital and the changes in the SE)))%$0$$*& before the Reverse Share Split and number of ordinary Shares and the share capital that will be SE)))-%*$&%* after the Reverse Share Split. made in connection with the listing of the Shares on Nasdaq Stockholm. CERTAIN RIGHTS ATTACHED TO THE SHARES Voting rights At general meetings of shareholders, each Share carries one vote and each shareholder is entitled to vote the full number of Shares such shareholder holds in the Company.

Pre-emption rights If the Company issues Shares, warrants or convertibles in a cash issue or a set-o# issue ( Sw. kvittningsemission ), the holders of Shares have pre-emption rights to subscribe for such securi- ties in proportion to the number of Shares held prior to the issue. Nothing in the Company’s Articles of Association restricts its ability to issue Shares, warrants or convertibles, with deviation from the shareholders’ pre-emption rights, if provided for in the Swedish Companies Act.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 89 SHARE CAPITAL AND OWNERSHIP STRUCTURE

Change in Total number of Change in share Share capital Quota value Year Event Shares Shares capital (SEK) (SEK) (SEK) XZZZ Formation X,aaa X,aaa Xaa,aaa Xaa,aaa Xaa ^aaa New issue Y,aaa _,aaa Yaa,aaa _aa,aaa Xaa ^aa_ New issue XZ,_aa,aaa ^a,aaa,aaa XZ,_aa,aaa ^a,aaa,aaa X.aa ^aab New issue * _,aaa,aaa ^_,aaa,aaa _,aaa,aaa ^_,aaa,aaa X.aa ^aaZ Exercise of warrants Xfa,_aa ^_,Xfa,_aa Xfa,_aa ^_,Xfa,_aa X.aa ^aaZ Exercise of warrants Yb,X_a ^_,^^b,`_a Yb,X_a ^_,^^b,`_a X.aa ^aaZ Redemption ** –_,aaa,aaa ^a,^^b,`_a –_,aaa,aaa ^a,^^b,`_a X.aa ^aaZ New issue ^a^,^b`,_aa ^^^,_aY,X_a ^a^,^b`,_aa ^^^,_aY,X_a X.aa ^aaZ New issue X,fYZ,aZY ^^Y,[_[,^YY X,fYZ,aZY ^^Y,[_[,^YY X.aa ^aXa New issue b,[Z`,[b` ^[X,bYZ,`^a b,[Z`,[b` ^[X,bYZ,`^a X.aa ^aXa Reverse share split X:Z –^a_,ZZZ,``[ ^_,bYZ,Z_b – ^[X,bYZ,`^a Z.aa ^aXa Redemption –f^X,fXf ^Y,Z^f,X[Z –b,[Z`,[`Z ^^Y,[_[,^_X Z.aa ^aX^ Reduction – ^Y,Z^f,X[Z –^X`,fbY,faZ.[ –b,Ybf,YYX.b a.[a ^aX^ New issue `aa,`bf,aYf `^_,`a`,Xfb Xfa,^a[,YXY.Y Xfb,`fX,f_`.X a.[a ^aX^ New issue b,aa_,aZf `[^,`XX,^f_ ^,XaX,_^Z.Y XfZ,bf[,[f_._ a.[a ^aX^ Bonus issue – `[^,`XX,^f_ [b,Z_`,`bb.X ^^b,bYa,a`^.` a.[` ^aXY New issue `^^,fYa `[[,^[Y,X^_ *** ^^Y,^^^.Y ^^b,Z`Y,^f_ a.[` ^aX_ New issue [^^,`Zf `[[,__`,f^[ XX`,XbX.^f ^^f,afa,Y_`.^f a.[` ^aX_ Reverse Share Split X:Xa **** –_ba,^^X,XYX `[,[__,`f^ – ^^f,afa,Y_`.^f [.`a ^aX_ New issue in connection ^[,^fb,`bX f`,`Y[,[_[ f[,f[_,`X` [XX,ZX`,ab^ [.`a with the Offer ***** * _,aaa,aaa preference shares were issued. ** _,aaa,aaa preference shares were redeemed. *** As at ^f February ^aX_, the total number of Shares in the Company amounted to `[[,^[Y,X^_. According to the Company’s articles of association prevailing at that time, the share capital was to be no less than SEK Xaa,aaa,aaa and no more than SEK Yaa,aaa,aaa and the Company was to have no less than ^_a,aaa,aaa and no more than X,aaa,aaa,aaa Shares. **** As at the date of this Prospectus, these events have not yet been registered, see “ —Comments to the share capital history ” below. ***** The Board of Directors will, based on the authorisation provided on ^b May ^aX_ by the annual general meeting, resolve to issue a maximum of ^[,^fb,`bX new shares in connection with the Offer in accordance with this Prospectus. The change in the number of Shares, and the share capital, assumes a final price in the Offer at the mid- point of the Offer Price Range. These shares will, due to technical reasons pertaining to a share issue, wholly or partly be subscribed for by Danske Bank of behalf of those who are entitled to subscribe pursuant to this Prospectus. The Shares comprised by the Offer will thereby be issued at a price of SEK a.[` per share, after which Danske Bank, on behalf of those who are entitled to subscribe, will provide capital to the Company in an amount corresponding to the difference between the final price in the Offer and the subscription price of SEK a.[` per share.

Comments to the share capital history e issue of the Shares in connection with the O#er could, At an extraordinary general meeting on +& October +)%+, it assuming a price in the O#er at the mid-point of the O#er was resolved to reduce the Company’s share capital by SEK Price Range, increase the number of the Company’s Shares by +%(,*-&,*)'.0. e purpose of the reduction was to reduce the a maximum of +0,+*-,(-%, corresponding to a dilution of +-5. quota value of the Shares from SEK nine to SEK ).0) to enable a re1nancing of Nobina Europe’s then outstanding bonds by AUTHORISATION way of the bondholders contributing bonds in an aggregate At the annual general meeting held on +- May +)%$, the share- value of SEK %*),('',0-$ in exchange for Shares. holders of the Company resolved to authorise the Board of At the annual general meeting held on +- May +)%$, the Directors to, at one or several occasions before the next annual shareholders of the Company resolved upon a direct non-pre- general meeting, resolve upon a new issue of Shares in the emptive issue of no more than (&$,0'( new Shares to the CEO Company, in connection with which it shall be possible to of the Company. Accordingly, 0++,('* Shares have since been deviate from the shareholders’ pre-emption rights. e reason subscribed for by the CEO. Furthermore, the annual general for deviating from the shareholders’ pre-emption rights shall, meeting resolved upon a %:%) reverse share split, i.e, ten (%)) in such case, be to enable an o#ering of Shares to investors in Shares will be exchanged into one (%) Share whereby the quota connection with capital raisings and/or diversi1cation of the value of the Shares is increased from SEK ).0( to SEK 0.() and Company’s shareholder base. Payment for subscribed Shares the number of Shares decreases from (00,$$(,*+0 to (0,0$$,(*+ may be made in cash, by set-o# or in kind. In the event that a (the “ Reverse Share Split ”). As of the date of this Prospectus, new issue of Shares is made with deviation from the share- the Reverse Share Split has not yet been registered with holders’ pre-emption rights, the Shares shall be issued at mar- Euroclear but registration is expected to occur on or around ket price as determined by the Board of Directors in consulta- * June +)%$. tion with the Company’s 1nancial advisors. If deemed appropriate by the Board of Directors, and in order to facili- DILUTION IN TERMS OF SHAREHOLDING tate the settlement mechanics in connection with capital rais- As of the date of this Prospectus, the Group has no outstand- ings and/or diversi1cation of the Company’s shareholder base, ing convertible debentures, warrants or other 1nancial instruc- Shares may also be issued at a subscription price equal to the tions which would, if they were exercised, imply a dilutive quota value of the Shares. e#ect for the shareholders of the Company.

90 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) SHARE CAPITAL AND OWNERSHIP STRUCTURE

OWNERSHIP STRUCTURE PRIOR TO AND FOLLOWING THE OFFER e following table sets out the Selling Shareholders’ share- (“ Outcome I ”), (b) the maximum number of Shares that the holdings at the date of this Prospectus and the number of Selling Shareholders may sell assuming that the Over-allot- Shares that the Selling Shareholders expect to sell in the O#er. ment Option is not exercised (“ Outcome II ”) and (c) the e number of Shares expected to be sold in the O#er is indi- maximum number of Shares that the Selling Shareholders cated with the following alternative outcomes: (a) the mini- may sell assuming that the Over-allotment Option is exercised mum number of Shares that the Selling Shareholders may sell (“ Outcome III ”). assuming that the Over-allotment Option is not exercised

Shareholding on the date of this Prospectus Outcome I Outcome II Outcome III Selling Shareholder Number * % Number * % Number * % Number * %

Sothic Capital ** Xf,Z_b,[aZ ^Z.Z f,_[a,bfZ Y_ f,ZaZ,Z[_ Yb XX,[f^,bZf `a BlueMountain Xa,f^a,[f` Xb.X [,^Y`,XX` [a Y,[^f,X_Y Ya Y,[^f ,_Y Ya Invesco Z,a[_,f[a XY.[ Y,a``,X^Y Y_ Y,_Xb,ZX_ _a `,ZZa,bbf bb Anchorage f,f_a,aaa XY.a Y,Y^_,aaa _a `,[b`,Y^_ b^ f,fYZ,^ff Xaa BlueCrest `,[Yf,ZbY Xa.a `,[Yf,ZbY Xaa `,[Yf,ZbY Xaa `,[Yf,ZbY Xaa Ironshield [,Yaa,aaa _.Y X,baa,aaa _a [,Yaa,aaa Xaa [,Yaa,aaa Xaa Gladwyne ^,Y`a,aaa [.Z Yaa,aaa X` faa,aaa [[ faa,aaa [[ Kite Lake Zf^,`a[ X.` Zf^,`a[ Xaa Zf^,`a[ Xaa Zf^,`a[ Xaa Magnolia baa,aaa X.X ^aa,aaa ^Z Yaa,aaa _b Yaa,aaa _b

* The number of Shares assumes that the Reverse Share Split has been registered with Euroclear, which is expected to occur on or around f June ^aX_. ** The number of Shares assumes that, in the Reverse Share Split, Sothic Capital transfers, free of charge, a total of Xf_ Shares to shareholders of the Company whose share- holding is not evenly divided by ten.

e table below sets out the current ownership structure of the of the O#er Price Range. As at the date of this Prospectus, Company, as well as expected ownership of Shares following there were, according to the Company’s knowledge, no natu- the completion of the O#er with the following alternative out- ral or legal persons owing $5 or more of the Shares or voting comes: (a) Outcome I (b) Outcome II and (c) Outcome III, in rights in the Company other than as shown in the table below. each outcome assuming a price in the O#er at the mid-point

Shareholding on the date of this Prospectus Outcome I Outcome II Outcome III Shareholder Number * % Number * % Number * % Number * %

Sothic Capital ** Xf,Z_b,[aZ ^Z.Z Xa,Y^` _^a X^.a Xa,aYb,[bY XX.` b,_bY,_XX f.b BlueMountain Xa,f^a,[f` Xb.X b,_bY ^ba f.b `,YZ^,^[^ b._ `,YZ^,^[^ b._ Invesco Z,a[_,f[a XY.[ Y,Z`Z ba` _.b Y,_Xb,ZX_ _.^ ^,aY_,a_^ ^.Y Anchorage f,f_a,aaa XY.a Y,Y^_ aaa _.X ^,Yb[,_b_ ^.Z bX^ a BlueCrest `,[Yf,ZbY Xa.a a a a a a a Ironshield [,Yaa,aaa _.Y X,baa aaa ^.a a a a a Gladwyne ^,Y`a,aaa [.Z ^,a`a ^.Y X,``a,aaa X.Z X,``a,aaa X.Z Kite Lake Zf^,`a[ X.` a a a a a a Magnolia baa,aaa X.X _aa,aaa a.` [aa,aaa a.[ [aa,aaa a.[ Others X,afa,a`a X.b X,afa,a`a X.^ X,afa,a`a X.^ X,afa,a`a X.^

Board and Group Management Ragnar Norbäck [_X,^fa a.` `Zb,a^^ a.f `Zb,a^^ a.f `Zb,a^^ a.f Per Skärgård Za,b_f a.X ^aZ,XbX a.^ ^aZ,XbX a.^ ^aZ,XbX a.^ Other members of the Board and Group Management ^bf,Yf^ a.Y X,a`[,`Y^ X.^ X,a`[,`Y^ X.^ X,a`[,`Y^ X.^

New shareholders a a _X,Z[b,Z`^ _Z.Z _f,Xa^,[`^ `b.X `_,_^a,Z_^ b_.` Total TU,UWW,TXY IZZ XT,TJU,UWU IZZ XT,TJU,UWU IZZ XT,TJU,UWU IZZ

* The number of Shares assumes that the Reverse Share Split has been registered with Euroclear, which is expected to occur on or around f June ^aX_. ** The number of Shares assumes that, in the Reverse Share Split, Sothic Capital transfers, free of charge, a total of Xf_ Shares to shareholders of the Company whose share- holding is not evenly divided by ten and that X[ of these Shares are allotted to shareholders in the category “ Other shareholders ”.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 91 SHARE CAPITAL AND OWNERSHIP STRUCTURE

SHAREHOLDERS’ AGREEMENT Other considerations Certain of the existing shareholders of the Company are party e shareholders’ meeting may, as a general rule, not declare to a shareholders’ agreement with respect to their holdings in dividends in an amount higher than the Board of Directors the Company, which will terminate in connection with the has proposed or approved. O#er. Under the Swedish Companies Act, minority shareholders that together represent at least %)5 of all outstanding shares of LOCK-UP ARRANGEMENTS the Company have the right to request a payment of dividend After completion of the O#er, the Selling Shareholders will, (to all shareholders) from the Company’s pro1ts. Following assuming a price in the O#er at the mid-point of the O#er such a request, the annual general meeting is required to Price Range, continue to hold, in the aggregateat least resolve to distribute $)5 of the remaining pro1t for the rele- +$,&'%,)'( Shares and no more than 0%,($$,&'( Shares and vant year as reported on the statement of 1nancial position votes in the Company (assuming that the Over-allotment adopted at the annual general meeting, after deductions made Option is exercised in full). e Selling Shareholders will for: (a) losses carried forward that exceed unrestricted reserves agree with the Joint Bookrunners not to divest their remain- (Sw. fria fonder ); (b) amounts which, by law or the Articles of ing Shares for a period of %*) days from the date of the 1rst Association, must be transferred to restricted equity; and (c) day of trading of the Shares. In addition, members of the amounts which, pursuant to the Articles of Association, are to Board of Directors and Group Management will agree with be used for any purpose other than distribution to the share- the Joint Bookrunners not to divest their Shares for a period of holders. However, the general meeting is not obliged to 0() days from the date of the 1rst day of trading of the Shares. declare dividends in excess of 1ve 5 of the Company’s share- See further “ Plan of distribution—Lock-up arrangements ”. holders’ equity. Moreover, the general meeting may not declare dividends to the extent that there will not be full cov- DIVIDENDS erage of the Company’s restricted equity or in violation of the General prudence rule described above. Holders of the Company’s Shares will be entitled to receive Dividends will normally be paid to shareholders in SEK on future dividends, including any dividends declared in respect a per share basis through Euroclear Sweden, but may also be of FY%$/%( and in respect of any subsequent period, provided paid in kind. On the record date established by the general dividends are declared. meeting, all shareholders recorded as owners of shares in the register of shareholders maintained by Euroclear Sweden will Dividend policy be entitled to receive dividends. Under normal circumstances %) , the Company expects to dis- e Company declares dividends in SEK. Dividends to tribute annual dividends in excess of -$5 of EBT. For the cur- shareholders who do not have an account for the receipt of rent 1nancial year ending +' February +)%(, in the absence of dividend ( Sw. avkastningskonto ) in SEK will, following a cur- unforeseen circumstances, Nobina expects to declare divi- rency exchange implemented by the Company or Euroclear dends of at least -$5 of adjusted EBT +) . Sweden, be paid in EUR. Shareholders with nominee regis- Nobina has not made any dividend payments for FY%&/%$, tered holdings should contact their nominee regarding divi- FY%0/%& and FY%+/%0. dend payment currency. See further “ Risk Factors—Risks Relating to the O&er and the Shares—Investors with a reference Legal requirements currency other than SEK will become subject to certain foreign e declaration of dividends or other capital distributions by exchange risks when investing in the Shares ”. Swedish companies is decided upon by the general meeting of If a shareholder cannot be paid through Euroclear Sweden, shareholders. Dividends or other capital distributions may such shareholder still retains its claim to the dividend amount, only be declared to the extent that there is unrestricted equity and the claim remains against the Company subject to a statu- (Sw. fritt eget kapital ) available, meaning that there must be tory limitation of ten years. Should the claim become barred full coverage for the Company’s restricted equity ( Sw. bundet by the statute of limitations, the dividend amount is forfeited eget kapital ) after the distribution. Restricted equity, includes, to the Company. among other things, the Company’s share capital and its Neither the Swedish Companies Act nor the Company’s statutory reserve. Articles of Association contain any restrictions regarding divi- Furthermore, in addition to the requirement regarding full dend rights of shareholders resident outside Sweden. Subject coverage for the Company’s restricted equity, dividends or other to any restrictions imposed by banks or clearing systems in the capital distributions may only be declared to the extent that relevant jurisdiction, payments to such shareholders are made such declaration is prudent, taking into consideration: (a) the in the same manner as for shareholders resident in Sweden. demands with respect to the size of the equity which are However, shareholders with limited tax liability in Sweden are imposed by the nature, scope and risks associated with the oper- normally subject to Swedish withholding tax. For a discussion ations of the Company and, if applicable, the Group; and (b) of withholding taxes on the payment of dividends, see further the need to strengthen the balance sheet, liquidity and 1nan- “Tax consideration in Sweden ”. cial position of the Company and, if applicable, the Group.

%) Taking into account Nobina’s cash 7ow, investment needs and general business conditions. +) EBT for the 1nancial year ending +' February +)%( will be adjusted for costs relating to the O#er as well as all costs accounted for in relation to the interest on, and early repayment of, the outstanding senior bond and costs related to the payments under the management incentive programme.

92 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) PLAN OF DISTRIBUTION

PLAN OF DISTRIBUTION

THE STRUCTURE OF THE OFFER e obligations of the Joint Bookrunners to procure pur- e O#er consists of: (i) a public o#ering to retail and institu- chasers for Shares are subject to the ful1lment of certain con- tional investors in Sweden pursuant to the Swedish Prospec- ditions, including the delivery of opinions on certain legal tus; and (ii) private placements to international institutional matters from legal counsel to the Company and the Joint investors in various jurisdictions, including a private place- Bookrunners. Pursuant to the Placing Agreement, the Com- ment in the United States only to persons reasonably believed pany makes customary representations and warranties to the to be both QIBs in reliance on Rule %&&A or another available Joint Bookrunners, primarily in relation to the information in exemption from the registration requirements under the U.S. the Prospectus being correct and the Prospectus ful1lling the Securities Act. All o#ers and sales of Shares outside the United requirements of applicable laws and regulations. e Compa- States will be made in compliance with Regulation S. ny and the Selling Shareholders will pay fees to the Joint e Shares have not been, and will not be, registered under Bookrunners based on a percentage of the aggregate purchase the U.S. Securities Act or with any securities regulatory price of the Shares, including pursuant to the exercise of the authority of any state of the United States for o#er or sale as Over-allotment Option. In addition, the Company and the part of their distribution and may not be o#ered or sold within Selling Shareholders may choose to pay a discretionary fee to the United States except in certain transactions exempt from the Joint Bookrunners, also calculated based on a percentage the registration requirements of the U.S. Securities Act. e of the aggregate purchase price of the Shares, including pursu- Shares may only be resold outside the United States in o#shore ant to the exercise of the Over-allotment Option. e Com- transactions in compliance with Regulation S under the U.S. pany will also reimburse the Joint Bookrunners for certain of Securities Act and in accordance with applicable law. Any their expenses in connection with the O#er. o#er and sale in the United States will be made by a8liates of e Company has agreed to indemnify the Joint Bookrun- the Joint Bookrunners who are broker-dealers registered under ners against certain losses and liabilities arising in connection the U.S. Exchange Act. with the O#er, including liabilities under the Securities Act. No action has been or will be taken in any jurisdiction e Placing Agreement will provide that, upon the occurrence other than Sweden that would permit a public o#ering of the of certain events, such as a general suspension of trading on Shares, or the possession, circulation or distribution of this Nasdaq Stockholm or if there shall have been any breach of, or Prospectus or any other material relating to the Company or event rendering untrue or incorrect in any respect, the warran- the Shares, in any jurisdiction where action for that purpose is ties and representations given by the Company or the Selling required. Accordingly, the Shares may not be o#ered or sold, Shareholders under the Placing Agreement, or any failure to directly or indirectly, and neither this Prospectus nor any perform any covenants, in each case, which may reasonably be other o#ering material or advertisements in connection with expected to result in a material adverse change in the condi- the Shares may be distributed or published, in or from any tion, 1nancial, operational, legal or otherwise, or in the earn- country or jurisdiction except in compliance with any appli- ings, management, business a#airs or business prospects of cable rules and regulations in such country or jurisdiction. the Company and its subsidiaries, the Joint Bookrunners may elect to terminate their several commitments under the THE PLACING AGREEMENT Placing Agreement. e Company, the Selling Shareholders and the Joint Book- runners expect to enter into the Placing Agreement on or LOCK-UP ARRANGEMENTS about %- June +)%$ with respect to the Shares. Subject to cer- Pursuant to the Placing Agreement, the Company will agree tain conditions set forth in the Placing Agreement, the Joint with the Joint Bookrunners that it will not, for a period of 0() Bookrunners will agree, severally but not jointly, to procure days after the 1rst date of trading of the Shares, without the purchasers for, or failing which, to purchase themselves, and prior written consent of the Joint Bookrunners, submit to its each of the Company and the Selling Shareholders will agree shareholders any proposal for a capital increase that would to issue or sell, as applicable, to the Joint Bookrunners the enable it to, or otherwise take any action to, directly or indi- aggregate number of Shares sold in the O#er, taking account rectly issue, o#er, pledge, sell, contract to sell, or otherwise of the commitments of each Joint Bookrunner as set forth in dispose of any securities of the Company that are substantially the table below, at an o#er price per Share to be set forth in the similar to the Shares, including any securities that are convert- Placing Agreement and announced by the Company on or ible into or exchangeable for, or that represent the right to around %* June +)%$. receive, Shares of the company; and not to purchase or sell any option or other security or enter into any swap, hedge or other Joint Bookrunner Percentage of Shares agreement that would have similar economic consequences to Carnegie [b._ such actions. e Company’s undertaking is subject to certain Danske Bank Yb._ customary exceptions and shall also not apply in connection Pareto Securities X_.a with the Company’s historical, current or future share-based Total IZZ incentive schemes.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 93 PLAN OF DISTRIBUTION

e Selling Shareholders and the members of the Board of Selling Shareholders have agreed that the Joint Bookrunners Directors and Group Management of the Company will each may over-allot Shares by accepting o#ers to purchase a greater undertake to the Joint Bookrunners not to, with the prior number of Shares than for which they are obligated to procure written consent of the Joint Global Coordinators, o#er, purchasers under the Placing Agreement, creating a short pledge, sell, contract to o#er, pledge or sell, sell any option or position. A short sale is covered if the short position is no contract to purchase, purchase any option or contract to sell, greater than the number of Shares available for purchase by grant any option, right or warrant to purchase, lend or other- the Joint Bookrunners under the Over-allotment Option. e wise transfer or dispose of, directly or indirectly, any Shares or Joint Bookrunners can close out a covered short sale by exer- any securities of the Company that are convertible into or cising the Over-allotment Option or purchasing Shares in the exercisable or exchangeable for, or that represent the right to open market. In determining the source of Shares to close out receive, Shares of the Company or any such substantially simi- a covered short sale, the Joint Bookrunners will consider, lar securities; enter into any swap, hedge or other agreement among other things, the open market price of Shares com- that transfers to another, in whole or in part, any of the eco- pared to the price available under the Over-allotment Option. nomic consequences of ownership of the Shares; or propose or e Joint Bookrunners may also sell Shares in excess of the vote in favour of a capital increase proposed with respect to Over-allotment Option, creating a naked short position. e the Company, unless the Company itself would be permitted Joint Bookrunners must close out any naked short position by to make such proposal, whether any such transaction is to be purchasing Shares in the open market. A naked short position settled by delivery of Shares, in cash or otherwise, for a period is more likely to be created if the Stabilising Manager is con- of %*) days from the 1rst day of trading of the Shares for the cerned that there may be downward pressure on the price of Selling Shareholders and for a period of 0() days from the 1rst the Shares in the open market after pricing that could adverse- day of trading of the Shares for the members of the Board of ly a#ect investors who purchase Shares pursuant to the O#er. Directors and Group Management. (Such lock-up restrictions As an additional means of facilitating the O#er, the Stabilis- will also apply to the Shares purchased by members of the ing Manager or its agents may e#ect transactions to stabilise Board of Directors and Group Management by way of re- or maintain the price of the Shares or any options, warrants or investment of amounts received under the management incen- rights with respect to, or interests in, the Shares. ese activi- tive programme). e foregoing shall not apply to: certain dis- ties may support the market price of the Shares at a level high- posals of Shares to family members, partners, directors and er than that which might otherwise prevail in the open mar- entities under common control, provided that the transferee ket. Such transactions may be e#ected on Nasdaq Stockholm, agrees to a lock-up; any disposal pursuant to a bona 1de third- in the over-the-counter markets or otherwise. e Stabilising party takeover o#er or other similar transaction; any disposal Manager and its agents are not required to engage in any of in connection with a redemption or buy-back of shares by the these activities and, as such, there is no assurance that these Company; rights in connection with a pre-emptive o#ering by activities will be undertaken; if undertaken, the Stabilising the Company; any transaction required by law or regulation; Manager or its agents may end any of these activities at any any transfer or deposition of Shares to a capital insurance or time and they must be brought to an end at the end of the an investment savings account, subject to certain conditions; 0)-day period mentioned above. Save as required by law or transactions relating to Shares or other securities acquired in regulation, none of the Stabilising Manager or any of its open market transactions after the completion of the O#er. agents, or the Joint Bookrunners, intends to disclose the Furthermore, the lock-up restrictions do not prevent the Sell- extent of any stabilisation and/or over-allotment transactions ing Shareholders from holding their Shares through a prime in connection with the O#er. broker or custodian, who is able to make certain transactions with the Shares for its own account, or from granting a securi- OTHER ty interest over the Shares, with a right of sale in the event of From time to time, the Joint Bookrunners and their respective default. a8liates have provided, and may in the future provide, servic- es within the context of their day-to-day operations to the OVER-ALLOTMENT OPTION Company or the Selling Shareholders and to parties related to Pursuant to the Placing Agreement, Sothic Capital, Anchorage them in connection with other transactions, including, but and Invesco will grant an option to the Joint Global Coordi- not limited to, commercial banking, investment banking, nators, on behalf of the Joint Bookrunners, to purchase up to 1nancial advisory, and other services. In particular, Danske -,&%*,$') additional existing Shares from Sothic Capital, Bank is lender under Nobina Europe’s credit facility. Addi- Anchorage and Invesco, solely to cover over-allotments or tionally, the Joint Bookrunners may, in the ordinary course of short positions, if any, exercisable for a period of 0) calendar their business, hold the Company’s securities or securities of days after the 1rst day of trading of the Shares on Nasdaq the Selling Shareholders for investment on behalf of their Stockholm. respective clients. With respect to certain of these transactions and services, the sharing of information is generally restricted STABILISATION for reasons of con1dentiality, internal procedures or applicable In connection with the O#er, Danske Bank, acting as rules and regulations. e Joint Bookrunners have received Stabilising Manager, or its agents, on behalf of the Joint Book- and will receive customary fees and commissions for these runners may engage in transactions that stabilise, maintain or transactions and services and may come to have interests that otherwise a#ect the price of the Shares for up to 0) days from may not be aligned or could potentially con7ict with the the 1rst day of the listing of the Shares on Nasdaq Stockholm. interests of potential investors, the Company and/or the Sell- Speci1cally, the Joint Bookrunners, the Company and the ing Shareholders.

94 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) PLAN OF DISTRIBUTION

SELLING RESTRICTIONS United Kingdom United States Any o#er or sale of the Shares may only be made to persons in e Shares have not been, and will not, be registered under the United Kingdom who are “quali1ed investors” or other- the U.S. Securities Act or with any securities regulatory wise in circumstances that do not require publication by the authority of any state of the United States for o#er or sale as Company of a prospectus pursuant to section *$(%) of the U.K. part of their distribution and may not be o#ered or sold with- Financial Services and Markets Act +))). in the United States except in certain transactions exempt Any investment or investment activity to which this Pro- from the registration requirements of the U.S. Securities Act. spectus relates is available only to, and will be engaged in only e Shares may only be resold outside the United States in with persons who: (i) are investment professionals falling o#shore transactions in compliance with Regulation S under within Article %'($); or (ii) fall within Article &'(+)(a) to (d) the U.S. Securities Act and in accordance with applicable law. (“high net worth companies, unincorporated associations, Terms used above shall have the meanings given to them by etc.”), of the U.K. Financial Services and Markets Act +))) Regulation S under the U.S. Securities Act. (Financial Promotion) Order +))$ or other persons to whom such investment or investment activity may lawfully be made European Economic Area available (together, “relevant persons”). Persons who are not e Shares have not been, and will not be, o#ered to the pub- relevant persons should not take any action on the basis of this lic in any Member State of the EEA that has implemented the Prospectus and should not act or rely on it. Prospectus Directive, excluding Sweden (each, a “ Relevant Member State ”). Notwithstanding the foregoing, an o#ering General of the Shares may be made in a Relevant Member State: No action has been or will be taken in any country or jurisdic- tion other than Sweden that would, or is intended to, permit a t to any legal entity that is a quali1ed investor as de1ned in public o#ering of the Shares, or the possession or distribution the Prospectus Directive; of this Prospectus or any other o#ering material, in any coun- t to fewer than %)) or, if the Relevant Member State has try or jurisdiction where action for that purpose is required. implemented the relevant provision of the +)%) PD Persons into whose hands this Prospectus comes are Amending Directive, %$), natural or legal persons (other required by the Company, the Selling Shareholders and the than quali1ed investors as de1ned in the Prospectus Direc- Joint Bookrunners to comply with all applicable laws and reg- tive), as permitted under the Prospectus Directive, subject ulations in each country or jurisdiction in or from which they to obtaining the prior consent of the Joint Global Coordi- purchase, o#er, sell or deliver Shares or have in their posses- nators for any such o#er; sion or distribute such o#ering material, in all cases at their t in any other circumstances falling within Article 0(+) of the own expense. Neither we, the Selling Shareholders or the Joint Prospectus Directive; or Bookrunners accept any legal responsibility for any violation t provided that no such o#er of Shares shall result in a by any person, whether or not a prospective subscriber or pur- requirement for the publication by the Company, the Sell- chaser of any of the Shares, of any such restrictions. ing Shareholders or any Joint Bookrunner of a prospectus pursuant to Article 0 of the Prospectus Directive.

For the purposes of this provision, the expression “o#ered to the public” in relation to any Shares in any Relevant Member State means the communication in any form and by any means of su8cient information on the terms of the O#er and the Shares so as to enable an investor to decide to purchase or subscribe for the Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, the expression “Prospectus Directive” means Directive +))0/-%/ EC (and amendments thereto, including the +)%) PD Amend- ing Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “+)%) PD Amending Directive” means Directive +)%)/-0/EU.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 95 ARTICLES OF ASSOCIATION

ARTICLES OF ASSOCIATION

Articles of Association of Nobina AB (publ) adopted at the annual general meeting on +- May +)%$.

§1 Name the entire share register in e#ect 1ve weekdays prior to the e company’s name is Nobina AB (publ). meeting and must notify the company of their intention to attend no later than the day stipulated in the notice of the §2 Registered office meeting. e last-mentioned day may not fall on a Sunday, e company’s registered o8ce shall be situated in the public holiday, Saturday, Midsummer’s Eve, Christmas Eve or municipality of Stockholm. New Year’s Eve, nor may it fall earlier than the 1fth weekday prior to the meeting. §3 Objects of the company At a general meeting shareholders may be accompanied by e object of the company’s business is directly or indirectly one or two counsels provided that the shareholder has given to conduct business within the business areas of passenger noti1cation of this as speci1ed in the previous paragraph. conveyance and freight transportation and provide services within IT, human resources and real estate and also legal ser- §11 General meeting vices to group companies within the business areas stated and General meetings shall be held in Stockholm or in Solna, conduct any other activities compatible therewith (however, Sweden. the company shall not conduct any such activities referred to in the Swedish Banking Business Act or the Act of Financing e annual general meeting of shareholders shall be held Operation). within six months of the expiry of each 1nancial year. e following business shall be addressed at annual shareholders’ §4 Share capital meetings: e share capital shall be no less than SEK %)),))),))) and %. Election of a chairman of the meeting. no more than SEK &)),))),))). +. Preparation and approval of the voting list. 0. Approval of the agenda. §5 Number of shares &. Election of one or two persons who shall approve the e company shall have no less than (),))),))) shares and minutes. no more than +&),))),))) shares.* $. Determination of whether the meeting has been duly §6 Record day provision convened. e company’s shares shall be registered in a central securities (. Submission of the annual report and the auditor’s report register pursuant to the Swedish Financial Instruments and, where applicable, the consolidated 1nancial state- Accounts Act (%''*:%&-'). ments and the auditor’s report for the group. -. Resolutions regarding §7 Board of directors a. the adoption of the income statement and balance sheet e board of directors shall consist of no less than three (0) and, when applicable, the consolidated income state- and no more than ten (%)) members. ment and consolidated balance sheet; b. allocation of the company’s pro1ts or losses in accord- §8 Auditors ance with the adopted balance sheet; and e company shall have no less than one (%) and no more than c. discharge of the members of the board of directors and two (+) auditors with no more than two (+) deputy auditors. the managing director from liability. An authorised public accountant or a registered public *. Determination of the number of members and deputy accounting 1rm shall be appointed as auditor and, when members of the board of directors and, when applicable, applicable, deputy auditor. the number of auditors and deputy auditors. '. Determination of fees for members of the board of direc- §9 Notice of shareholder’s meeting tors and auditors. Notice to attend general meetings shall be announced in the %). Election of the members of the board of directors and, O8cial Swedish Gazette ( Sw. Post- och Inrikes Tidningar ) as where applicable, auditors and possible deputy auditors. well as on the company’s website. At the same time as the %%. Other matters which are set out in the Swedish Companies notice convening the meeting, information regarding the Act (+))$:$$%) of the articles of association. notice shall be published in Dagens Industri. §12 Financial year §10 Shareholder’s rights to participate in the e company’s 1nancial year shall be )0)%–)++*(+'). shareholders’ meeting Shareholders who wish to participate in a general meeting must be recorded in a transcription or other presentation of

* e number of Shares assumes that the Reverse Share Split has been registered with Euroclear, which is expected to occur on or around * June +)%$. Prior to the registration of the Reverse Share Split, the numbers of Shares in the Company shall amount to no less than +$),))),))) and no more than %,))),))),))).

96 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) LEGAL CONSIDERATIONS AND SUPPLEMENTARY INFORMATION

LEGAL CONSIDERATIONS AND SUPPLEMENTARY INFORMATION

GENERAL COMPANY AND GROUP INFORMATION e Company has its registered o8ce in Stockholm, e Company is a Swedish public limited liability company Sweden, and the Company’s corporate identi1cation number (Sw. publikt aktiebolag ) incorporated on ' September %''' and is $$($-(-&$('. e business is conducted in accordance with registered with the Swedish Companies Registration O8ce the Swedish Companies Act. e Group comprises the Com- (Sw. Bolagsverket ) on %- September %'''. e Company’s cur- pany and its subsidiary undertakings. e Company has the rent name, Nobina AB (publ), was registered on ++ December following subsidiaries, all of which are directly or indirectly +))'. %))5 owned by it:

Country of Name incorporation Ownership interest Principal activity Nobina Fleet AB Sweden Xaa% owned by Nobina AB Operating company Saltsjöbuss AB Sweden Xaa% owned by Nobina AB Dormant company Karlstadsbuss AB Sweden Xaa% owned by Saltsjöbuss AB Dormant company Nobina Busco AB Sweden Xaa% owned by Saltsjöbuss AB Operating company Nobina Europe AB Sweden Xaa% owned by Nobina AB Holding company Swebus Express AB Sweden Xaa% owned by Nobina Europe AB Operating company Nobina Sverige AB Sweden Xaa% owned by Nobina Europe AB Operating company Nobina Spår AB Sweden Xaa% owned by Nobina Sverige AB Operating company Nobina Europe Holding AB Sweden Xaa% owned by Nobina Sverige AB Holding company Nobina Finland Oy Ab Finland Xaa% owned by Nobina Europe AB Operating company Nobina Finland West Oy Ab Finland Xaa% owned by Nobina Finland Oy Operating company Nobina Finland South Oy Ab Finland Xaa% owned by Nobina Finland Oy Operating company Nobina Finland East Oy Ab Finland Xaa% owned by Nobina Finland Oy Operating company Nobina Norge AS Norway Xaa% owned by Nobina Europe AB Operating company Nobina (Norge) AS Norway Xaa% owned by Nobina Norge AS Operating company Nobina Danmark Holding ApS Denmark Xaa% owned by Nobina Europe AB Holding company Nobina Danmark A/S Denmark Xaa% owned by Nobina Danmark Holding ApS Operating company Nobina Fleet Danmark ApS Denmark Xaa% owned by Nobina Danmark Holding ApS Operating company Nobina Fleet Danmark No X ApS Denmark Xaa% owned by Nobina Fleet Danmark ApS Operating company Nobina Fleet Danmark No ^ ApS Denmark Xaa% owned by Nobina Fleet Danmark ApS Operating company Nobina Fleet Danmark No [ Aps Denmark Xaa% owned by Nobina Fleet Danmark ApS Operating company Nobina Fleet Danmark No Y Aps Denmark Xaa% owned by Nobina Fleet Danmark ApS Operating company

MATERIAL AGREEMENTS Interests of Advisors Save as disclosed below, there are no agreements (other than For a description of interests of advisors in connection with contracts entered into in the ordinary course of business) to the O#er, see “ Plan of distribution .” which the Company or any member of the Group is a party which (a) are material to the Group and which have been AGREEMENTS IN THE ORDINARY COURSE entered into in the two years immediately preceding the date OF BUSINESS of this Prospectus or (b) contain obligations or entitlements Client agreements which are material to the Group as at the date of this Prospec- For a general description of the Group’s contracts, see “ Market tus. overview—PTA overview ” and “ Business description—Clients and contract portfolio ”. Financing Arrangements As at +* February +)%$, the Group had %)$ contracts with For a description of the Group’s material 1nancing agree- PTAs throughout Sweden, Norway, Denmark and Finland. ments, see “ Operational and #nancial review—Liquidity e contractual terms of each contract stipulate, among other arrangements ”. things: the length of term and extension options; operational requirements including routes, scheduling and technical bus Placing Agreement speci1cations along with any permitted variations; remunera- For a description of the Placing Agreement in relation to the tion; applicable penalties, for example, if quality standards are O#er, see “ Plan of distribution .” not met such as punctuality and standards of vehicles; bonus-

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 97 LEGAL CONSIDERATIONS AND SUPPLEMENTARY INFORMATION

es; indexation; reporting requirements; quality standards; Supply agreements environmental speci1cations including emissions; corporate Supply of buses governance; employment standards and training; the leasing Nobina Fleet supplies buses to the Group’s operating compa- of real estate for use as depots; and any amendment or termi- nies typically through a form of sub-lease, on an arm’s length nation rights. Most contracts cover the same topics but the basis, which has the character of an intra-group operational parties’ respective rights and obligations may vary considera- lease. bly depending on the PTA that is party to the contract. Transport contracts generally have a term of 1ve to ten Other supply agreements years, plus extension options, however, operators may occa- Nobina Europe generally enters into framework agreements, sionally also enter into short-term contracts to ful1l tempo- on behalf of the Group subsidiaries, with the Group’s largest rary tra8c needs. In addition to the imposition of penalties suppliers of fuel, lubricants and maintenance. e Group’s for breach of contract, an operator may also be eligible for operating subsidiaries also enter into agreements directly with bonuses, for instance, for timely departures and arrivals of suppliers for the provision of tyres, vehicle inspection services buses and for obtaining a certain score on a passenger survey. and property leases as well as fuel, lubricants and mainte- A number of the Group’s contracts contain change of control nance. In such case, the Company may provide a parent com- clauses. Such clauses may either grant the PTA the right to pany guarantee, up to a certain amount, in respect of the sub- terminate the contract or require the operator to 1rst obtain sidiary’s obligations. A small proportion of supply agreements the PTA’s approval in the event of a change of ownership or are exclusive, for example, a Group subsidiary may be com- control within the Group. Under some contracts, however, a mitted to use a particular supplier to ful1l its entire demand PTA must 1rst be required to establish material reasons for for diesel. Certain supply agreements may also commit the the termination. A few contracts only permit the PTA to ter- subsidiary to purchase a certain agreed volume which may, in minate the contract if, in the PTA’s view, the change of control a limited number of contracts, entitle the supplier to compen- would impair the transport operator’s ability to perform its sation in the event that the actual volume is less than agreed. obligations. A PTA also generally has the right to terminate for an operator’s material or persistent breach of contract or REGULATION insolvency. Regulatory framework for public transport tenders e Nordic public transport market is governed by the Finance and operating leases Utilities Directive (i.e. directive +)%&/+$/EU on procurement e Group typically uses leases to acquire new buses for the by entities operating in the water, energy, transport and postal purpose of maintaining the Group’s existing 7eet and servicing services sectors which repealed the former EU Directive new contracts. As at +* February +)%$, 1nance leases account- +))&/%-/EC). According to the Utilities Directive, all PTAs in ed for -&5 of the Group’s bus 7eet and operating leases for the Nordic countries are required to hold an open and trans- %$5, with the remainder of buses owned directly by the Group. parent tender process when outsourcing transport services to e Group primarily enters into 1nance leases directly with a third party operator with a total value exceeding EUR 1nance companies of the bus manufacturers, with other exter- &%&,))). e Group’s contracts generally exceed this threshold. nal 1nance companies or with banks. Each 1nancial institu- Sweden, Denmark, and Finland are all in the process of tion uses its own standard agreements, but generally covers implementing the Utilities Directive, which must be trans- the same topics, and the agreements are similar. e duration posed into national law by %* April +)%(. Norway, as an EEA- of a 1nance lease is typically ten years. e main 1nancial risks member, is also planning to implement the Directives in April and bene1ts are transferred to Nobina Fleet. e material +)%(. e new regime aims to modernise and simplify the terms include lease rates, sub-letting rights, termination existing rules on public contracts and to codify EU case law. rights, price change mechanisms, penalties including for late e changes include enhanced rights for small- and medium- delivery; change of control provisions and obligations at the sized companies, more emphasis on quality and societal goals, end of the lease term. In the event of a change in the owner- rather than on price, in assessing bids, and the ability to ship or business of Nobina Fleet, or of a sub-lessee, the lease exclude bidders for persistent poor past performance. agreements provide the lessor with the right to terminate an e public transport tender process may be carried out in agreement and reclaim the vehicle. Alternatively, upon expiry, a number of ways, depending on the particular PTA and the Nobina Fleet is obliged to assume ownership of the buses from complexity of the contract to be tendered. Methods include an the lessor and therefore has full control of the vehicles on expi- “open procedure”, in which any operator may submit a tender ry of the contract. o#er, a “restricted procedure”, which entails pre-quali1cation Operating leases typically have a duration of 1ve years with of suitable operators that are subsequently invited to submit a an extension option of a further 1ve years. Upon expiration of tender o#er, and a “negotiated procedure”, in which selected the contract, Nobina Fleet returns the buses to the 1nancing operators are invited to participate in a negotiation following company, who, in return for an extra fee, thereby assumes the veri1cation of eligibility by the PTA. Transport operators base residual value risk. their o#ers on information contained in the contractual docu- mentation, which is made available by the PTA. is docu- mentation sets out any pre-quali1cation requirements, com- mercial conditions, technical bus speci1cations, timing, award procedure and the grounds for evaluation of the tender.

98 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) LEGAL CONSIDERATIONS AND SUPPLEMENTARY INFORMATION

PTAs evaluate tenders on the basis of the lowest price or, more e operations that are primarily subject to environmental typically (and the only method permitted under the new legislation are the Group’s depots, in which buses are washed, Utilities Directive), on the basis of the principle of the “most refuelled and serviced. Companies that operate at such depots economically advantageous tender”, using criteria linked to are required to notify the relevant authority of the activities. the object of the contract, including quality, price and envi- Such companies are further required to hold and maintain a ronmental characteristics, as well as the track record and number of permits, including for the storage and management r eputation of the relevant operator. of 7ammable and explosive products. In general, a washing e EU Remedies Directive +))-/((/EC imposes certain facility requires noti1cation to the municipal environmental common standards on the tender process with respect to board and the handling of fuel requires a permit. All Group potentially unfair contracts awards. When a decision to award entities currently hold the necessary permits to conduct their a contract is made, a stand-still period of at least %) days operations. e Company collects environmental data on the applies, during which time the PTA is prohibited from con- Group’s operations and submits an annual environmental cluding the 1nal contract and competing bidders may request report to the municipal authorities, which includes informa- further information and appeal the decision if they consider tion regarding the use of chemicals, emission levels in waste the PTA to have infringed any relevant public procurement water, any incidents that have occurred, and other environ- rules. In Sweden, public procurement decisions are subject to mental information. review in the Swedish administrative courts. e Swedish In Norway and Finland, Nobina has held ISO '))% quality Competition Authority, which is the competent government certi1cation and ISO %&))% environmental certi1cation for agency for public procurement, can also investigate a com- several years. In Denmark, all four transport areas became plaint if it is considered to be of general interest. In Denmark, certi1ed in +)%0 in accordance with the ISO %&))%. Since remedies or enforcement of procurement rules can be sought +))', e#orts have been underway in Sweden to obtain ISO from the Danish Public Contracts Appeals Board, including certi1cation for all tra8c areas. At the end of FY%&/%$, ' out by the Danish Competition Authority. In Norway, the of %- tra8c areas were ISO-certi1ed. enforcement of the laws on public procurement is assigned to the ordinary courts. e Norwegian Complaints Board for Other Public Procurement, an independent body assigned to review e Group’s operations are subject to numerous other regula- complaints regarding infringements of the laws on public pro- tions including concerning labour and employment, health curement, may also review complaints. In Finland, public and safety. procurement complaints are reviewed by the Market Court. A full tender process typically takes between three to six months, assuming that no complaints are 1led. LEGAL AND ADMINISTRATIVE PROCEEDINGS e Group is from time to time party to disputes and legal Transport permits proceedings arising in the ordinary course of its business (see e Group is required to obtain operating permits from further “ Risk Factors—"e Group may from time to time be authorities for passenger transport services. Each operating involved in litigation and disputes ”). In the past twelve months, company must hold a professional tra8c permit and a compa- the Group has not, and is not currently, a party to any govern- ny that conducts international passenger transport services mental, legal, administrative, arbitration or dispute proceed- must also hold a permit to conduct commercial transport ings that have had, or are expected to have, a material adverse within the EEA. Additionally, a permit is required for each e#ect on its 1nancial position or pro1tability, nor so far as the speci1c bus route. All Group subsidiaries currently hold the Group is aware, are any such proceedings pending or threat- necessary transport permits to conduct their operations. ened.

Environmental REAL ESTATE Nobina’s sustainability e#orts are an integral part of the e Group does not own any real estate but instead leases organisation and are based on creating economic, environ- premises from which it conducts its operations, including its mental and social value. e Company is of the opinion that headquarters, other o8ces and depots. In respect of depots, it fully operates in accordance with current legislation on all the Group typically enters into a lease agreement for a term environmental matters applicable to the Group, and the consistent with the duration of the relevant PTA contract Group continuously works to proactively anticipate changes including, if applicable, an equivalent extension option. Lease in such legislation. e Group allocates signi1cant resources agreements usually provide for automatic termination in the to ensure that it operates in accordance with both laws that event of termination of the underlying PTA contract. are generally applicable to it, but also industry-speci1c regulations.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 99 LEGAL CONSIDERATIONS AND SUPPLEMENTARY INFORMATION

INTELLECTUAL PROPERTY e Group is the registered holder of several domain names including www.nobina.com, .se, .no, .1 and .dk; www.swe- bus.com, .se, .no, and .dk; and www.swebusexpress.com, .se, .no and .dk. e Group also holds various trademarks, includ- ing “Nobina” and “Swebus”. e trademarks have been regis- tered in Finland, Norway, Sweden and the European Union. In +))', the Group rebranded itself from “Concordia Bus” to “Nobina”. Former trade names for Group entities including the words “Concordia” are still registered as secondary names in Finland, Norway, Sweden, and the European Union.

INSURANCE e Group carries the following types of insurance: business interruption, 1re interruption, common company insurance which contains directors’ and o8cers’ liability insurance, legal expenses, crime, third-party, and mandatory tra8c insurance. e Group also self-insures with respect to ordinary course damage to its bus 7eet. e Company believes that its insur- ance coverage is in line with the insurance coverage of other companies in the same business sector and that it is adequate for the risks normally associated with the Company’s business.

TRANSACTIONS WITH RELATED PARTIES e Group has not made any signi1cant transactions with related parties in FY%&/%$. For further information regarding transactions with related parties, see note +' to the Company’s audited consolidated 1nancial statements as of and for FY%&/%$ included in this Prospectus.

DOCUMENTS ON DISPLAY Copies of the following documents will be on display throughout the O#er period during ordinary o8ce hours on weekdays at the Company’s o8ces at Armégatan 0*, %-% -% Solna, Sweden: t the Company’s Articles of Association; and t the Company’s 1nancial statements for FY%+/%0, FY%0/%& and FY%&/%$ including auditors’ reports. e documents will also be available electronically on the Company’s website, www.nobina.com. Neither the annual reports listed above nor information contained on or referred to on the Company’s website form part of or are incorporated by reference into this Prospectus.

100 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) TAX CONSIDERATIONS IN SWEDEN

TAX CONSIDERATIONS IN SWEDEN

e following is a summary of certain Swedish tax issues related to the O#er and the admission for trading of Nobina’s shares on Nasdaq Stockholm for private individuals, limited liability companies that are resident in Sweden for tax purposes and shareholders not resident in Sweden for tax purposes, unless otherwise stated. e summary is based on current legislation and is intended to provide general information only regarding the Shares as from the admission for trading on Nasdaq Stockholm.

e summary does not cover: lated as the di#erence between the sales proceeds, after deducting sales costs, and the tax basis (i.e. the acquisition situations where Shares are held as current assets in busi- t cost increased by the improvement costs). e tax basis for all ness operations; listed shares of the same class and type is calculated in accord- situations where Shares are held by a limited partnership or t ance with the average cost method, alternatively, shareholders a partnership; may choose to use +)5 of the sales proceeds after deducting t the special rules regarding tax-free capital gains (including sales costs ( Sw. schablonmetoden ), as the tax basis. non-deductible capital losses) and dividends that may be applicable when the investor holds Shares in the Company Capital losses that are deemed to be held for business purposes (for tax Capital losses on listed shares may be fully o#set against taxa- purposes); ble capital gains arising during the same year on listed shares, the special rules which in certain cases may be applicable to t as well as on listed securities taxed as shares. Capital losses shares in companies which are or have been so-called close may however not be o#set towards gains on mutual funds companies or to shares acquired by means of such shares; (Sw. värdepappersfonder ) and hedge funds ( Sw. specialfonder ) t the special rules that may be applicable to private individu- containing Swedish receivables only ( Sw. räntefonder ). Capital als who make or reverse a so-called investor deduction losses not absorbed by these set-o# rules are deductible at -)5 (Sw. investeraravdrag ); in the capital income category. foreign companies conducting business through a perma- t Should a net loss arise in the capital income category, a nent establishment in Sweden; or reduction is granted of the tax on income from employment foreign companies that have been Swedish companies. t and business operations, as well as national and municipal property tax. is tax reduction is 0)5 of the net loss that Further, special tax rules apply to certain categories of share- does not exceed SEK %)),))) and +%5 of any excess loss. holders. e tax consequences for each individual shareholder A net loss cannot be carried forward to future tax years. depend to some extent on the particular circumstances at hand. Each shareholder is advised to consult a tax advisor as to ALLOTMENT OF SHARES TO EMPLOYEES the tax consequences relating to the holder’s particular cir- cumstances that could arise from the admission to trading of Normally, the allotment of shares is not a taxable event. For the Shares in the Company on Nasdaq Stockholm, including employees, the allotment of shares may in certain situations the applicability and e#ect of foreign tax legislation and provi- give rise to taxation of bene1ts. Taxation of bene1ts should, sions in tax treaties for the avoidance of double taxation. however, not occur if the employees (including directors and alternate directors) acquire, on the same terms and conditions PRIVATE INDIVIDUALS RESIDENT IN SWEDEN FOR as others, not more than +)5 of the total number of shares o#ered and the employee does not acquire shares for more TAX PURPOSES than SEK 0),))). Tax on dividends For private individuals resident in Sweden for tax purposes, INVESTMENT SAVINGS ACCOUNT AND capital income such as interest income, dividends and capital ENDOWMENT INSURANCE gains is taxed in the capital income category. e tax rate in the capital income category is 0)5. A preliminary tax of 0)5 In the event that the Shares are held in a Swedish investment is generally withheld on dividends paid to individuals resident savings account ( Sw. Investeringssparkonto ) or a Swedish in Sweden. e preliminary tax is withheld by Euroclear Swe- endowment insurance ( Sw. Kapitalförsäkring ), the taxation den or, for nominee-registered shares, by the Swedish nominee. will di#er from what has been described above. Only a private individual or the estate of a deceased individual may is per- Capital gains tax mitted to hold a Swedish investment savings account. No tax Upon the sale or other disposal of listed shares, which the is due on the results of an investment savings account. Instead, Shares are intended to become, a taxable capital gain may a standard amount is taxed as capital income. e standard arise. Capital gains are taxed as income in the capital income amount of income is calculated by the party that provides the category at a tax rate of 0)5. e capital gain or loss is calcu- account, such as a bank or investment 1rm, and this is report-

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) 101 TAX CONSIDERATIONS IN SWEDEN

ed as income of capital in the tax return of the person liable to SHAREHOLDERS NOT RESIDENT IN SWEDEN FOR pay tax. e standard amount is calculated in two steps. First, TAX PURPOSES the capital base is calculated and, thereafter, a standard For shareholders not resident in Sweden for tax purposes that amount of income is calculated which is reported as capital receive dividends on shares in a Swedish limited liability com- income. e capital base is calculated annually and broadly pany, such as the Company, Swedish withholding tax is nor- comprises one quarter of the value of the assets on the account mally withheld. e same withholding tax applies to certain at the beginning of each quarter. e capital base must be other payments made by a Swedish limited liability company, increased by a value equivalent to the deposits to the account for example, payments as a result of redemption of shares and and the transfers of securities to the account during the repurchase of shares through an o#er directed to all share- respective quarter. e standard amount of income is derived holders or all holders of shares of a certain class. e tax rate is by multiplying the capital base, as described above, by the 0)5. e tax rate is generally reduced through tax treaties for government borrowing rate at the end of November the year the avoidance of double taxation. For example, under the tax before the 1scal year. e standard amount of income is treaty between Sweden and the United States, the withhold- reported as capital income and taxed at 0)5. ing tax on dividends paid to shareholders resident in the US, e holder of a Swedish endowment insurance is not liable shall not exceed %$5. Under the Treaty, furthermore, the tax to pay special tax on returns ( Sw. avkastningsskatt ). Instead, it rate is reduced to $5 for companies possessing shares repre- is the life insurance company providing the insurance that is senting at least %)5 of the total voting rights of the company liable for any special tax on returns. However, a holder of a declaring the dividend. e tax rate for companies and pen- foreign endowment insurance may be obliged to pay special sion funds may be reduced to )5 if certain requirements set tax on returns in Sweden. is depends on the country of resi- out in the Treaty are met. dence of the assurer and whether the assurer has a permanent In Sweden, withholding tax deductions are normally carried establishment in Sweden. Special tax on returns is not charged out by Euroclear Sweden or, in respect of nominee-registered on the capital gains, but on a standard calculated amount. e shares, by the nominee. Tax is withheld provided that neces- standard calculated amount used for endowment insurance sary information is made available to Euroclear Sweden in purposes is calculated in two steps. First a capital base is cal- relation to the person entitled to such dividends. If such infor- culated and, thereafter, a standard amount on this capital is mation is not made available to Euroclear Sweden, and tax is calculated. e capital base broadly constitutes the value of not levied, the person entitled to such dividends may be taxed the insurance at the beginning of the 1scal year. e capital retroactively. If a 0)5 withholding tax is deducted from a pay- base must be increased by a value equivalent to the sum of any ment to a person entitled to be taxed at a lower rate, or in the premiums paid during the 1scal year. When calculating this event that too much tax has otherwise been withheld, a refund amount, only half of the premiums paid during the second can be claimed from the Swedish Tax Agency ( Sw. Skattever- half of the 1scal year should be included. e standard calcu- ket ) prior to the expiry of the 1fth calendar year following the lated amount is derived by multiplying the capital base, as dividend distribution. described above, by the average government borrowing rate at the end of November the year before the 1scal year. e spe- Capital gains tax cial tax on returns amounts to 0)5of the standard calculated Shareholders not resident in Sweden for tax purposes, which amount. are not conducting business through a permanent establish- ment in Sweden, are normally not liable for capital gains taxa- LIMITED LIABILITY COMPANIES RESIDENT IN tion in Sweden upon disposals of shares. Shareholders may, SWEDEN FOR TAX PURPOSES however, be subject to taxation in their state of residence. Dividends and capital gains tax According to a special rule, private individuals not resident in For limited liability companies ( Sw. aktiebolag ) all income, Sweden for tax purposes remain subject to Swedish capital including taxable capital gains and taxable dividends, is taxed gains taxation upon disposals of shares in the Company, if as income from business operations at a rate of ++5. they have been residents of Sweden or have had a habitual abode in Sweden at any time during the calendar year of dis- Capital losses posal or the ten calendar years preceding the year of disposal. Capital losses on listed shares may only o#set taxable capital e applicability of this rule is often limited by the applicable gains on shares and other securities taxed as shares. A net capi- tax treaty for the avoidance of double taxation. tal loss on shares that cannot be utilised during the year of the loss, may be carried forward and o#set against taxable capital gains on shares and other securities taxed as shares in future years, without any limitation in time. If a capital loss cannot be deducted by the company that has su#ered the loss, it may be deducted from another legal entity’s taxable capital gains on shares and other securities taxed as shares, provided that the companies are entitled to so-called group contributions with 1scal e#ect and both companies request this for a tax year having the same 1ling date for each company. Special tax rules may apply to certain categories of companies or certain legal persons, such as investment companies.

102 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

is section contains Nobina’s consolidated 1nancial statements for FY%&/%$, FY%0/%& and FY%+/%0 as set out below. e FY%&/%$ 1nancial statements have been audited by PwC and the FY%0/%& and FY%+/%0 1nancial statements have been audited by EY.

Consolidated income statement F-^

Statement of consolidated comprehensive income F-^

Consolidated balance sheet F-[

Consolidated statement of changes in equity F-Y

Consolidated cash flow statement F-_

Notes F-`

Audit report for FYXY/X_ F-[[

Audit reports for FYX[/XY and FYX^/X[ F-[Y

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-1 FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT

ABCD-BG-BC ABCG-BG-BC ABCA-BG-BC SEK million Note –ABCF-BA-AI –ABCD-BA-AI –ABCG-BA-AI Net sales X, ^, [ \,WJ] \,YT] \,YIY

Operating expenses Fuel, tires and other consumables Y –X,`__ –X,`YY –X,ba^ Other external expenses Y, _, ` –X,aZX –X,XaX –X,XbZ Personnel costs Y, b –[,ffX –[,`Z^ –[,`a` Capital losses from the disposal of non-current assets –[_ –X_ –X_ Depreciation/amortisation of intangible and tangible non-current assets f –_X` –YZX –Y`Y Operating profit/loss X, ^ U\I UYT YJT

Profit from net financial items Financial income Z f Z Z Financial expenses Xa –^[f –^Yf –^`Y Net financial items –YUZ –YU] –YWW

Profit/loss before tax IJI X\ –] Income tax XX –Yb –[X `Z PROFIT/LOSS FOR THE YEAR ]J WT TZ

Profit/loss for the year attributable to Parent Company shareholders ZY _` `a Average number of shares before dilution (aaas) XZ `[[,aXY `[^,`XX ^[f,a[[ Earnings per share attributable to Parent Company shareholders, before dilution (SEK) ^a a.X_ a.aZ a.^_ Earnings per share attributable to Parent Company shareholders, after dilution (SEK) ^a a.X_ a.aZ a.^_

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME

ABCD-BG-BC ABCG-BG-BC ABCA-BG-BC SEK million Note –ABCF-BA-AI –ABCD-BA-AI –ABCG-BA-AI Profit for the year ZY _` `a

Other comprehensive income

Items not to be reclassified to profit or loss Revaluation of defined-benefit pension plan ^X –XZ –XX ` Tax on items that will not be reclassified to profit or loss for the period XX Y – –

Items that can later be reclassified to profit or loss Exchange-rate differences in foreign operations ` –f –_ Other comprehensive income, net after tax –] –I] I Comprehensive income for the year XW U\ TI

Comprehensive income attributable to Parent Company shareholders f_ [b `X

F-2 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEET

SEK million Note ABCF-BA-AI ABCD-BA-AI ABCG-BA-AI ASSETS Non-current assets Intangible assets Goodwill X^ _ff _f_ _ZX Other intangible assets X^ X` XZ ^X Total intangible assets TZJ TZJ TIY

Property, plant and equipment Costs for improvements on third-party properties X[ ^X Xb ^X Equipment, tools, fixtures and fittings X[ `X [^ _` Vehicles X[ Y,[_Y [,Z_a Y,X`f Total property, plant and equipment J,JUT U,]]] J,YJW

Financial assets Non-current receivables ––X Deferred tax assets XX ff XX[ X^` Assets for pension commitments ^X – _ X^ Total financial assets XX IIX IU] TOTAL NON-CURRENT ASSETS W,IYX J,\YI J,]]T

Current assets Inventories X_ YZ _[ YY Trade receivables X` _XZ [b_ [`Z Other current receivables b` bY fX Deferred expenses and accrued income Xb ^[` ^[_ ^Ya Restricted bank accounts Xf XX_ X_` Xb_ Cash and cash equivalents Xf Y_[ [aZ X[b Total current assets I,JJX I,YZY I,ZJT TOTAL ASSETS X, ^ T,W\T W,]YU T,ZJY

SHAREHOLDERS’ EQUITY AND LIABILITIES Shareholders’ equity attributable to Parent Company shareholders XZ UIZ YYJ IX\

Non-current liabilities Borrowing ^[ [,b`_ [,Yf[ [,faa Deferred tax liabilities XX f^ `_ Yb Provisions for pensions and similar commitments ^X [` ^f [a Other provisions ^^ [Z [f Y_ Total non-current liabilities U,]YY U,TIJ U,]YY

Current Liabilities Accounts payable Yb` Yba Y`_ Borrowing ^[ `[Y _`_ YZ` Other current liabilities ^Y XbY X__ X_[ Accrued expenses and deferred income ^_ X,a`a fZ_ fXZ Total current liabilities Y,UJJ Y,ZXW I,]UU TOTAL LIABILITIES T,YTT W,T]] W,XWW TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES X, ^ T,W\T W,]YU T,ZJY

PLEDGED ASSETS AND CONTINGENT LIABILITIES ^`

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-3 FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Total equity Other Profit/loss attributable to Share contributed Translation brought Parent Company SEK million capital capital differences forward shareholders Opening equity, YZIY-ZU-ZI YYJ Y,Y\I UW –Y,WX\ –W\ Profit for the year `a `a Other comprehensive income –_ ` X

Transactions with owners Reduction of share capital –^Xb ^Xb – – – New issue of shares (to bond holders) XfX – – – XfX New issue of shares to senior executives ^ – – – ^ Bond issue [f – – –[f – Issue expenses a – – – a

Closing equity, YZIU-ZY-YX YYX Y,JXX UZ –Y,WW] IX\

Profit for the year – – – _` _` Other comprehensive income – – –f –XX –XZ Total comprehensive income for the year – – –X JW U\

Closing equity, YZIJ-ZY-YX YYX Y,JXX YY –Y,WIJ YYJ

Profit for the year – – – ZY ZY Other comprehensive income – – ` –X_ –Z Total comprehensive income for the year – – T \] XW

New issue of shares to senior executives – X – – X

Closing equity, YZIW-ZY-YX YYX Y,JX] YX –Y,JUW UIZ

There are no non-controlling interests.

F-4 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

CONSOLIDATED CASH FLOW STATEMENT

ABCD-BG-BC ABCG-BG-BC ABCA-BG-BC SEK million Note –ABCF-BA-AI –ABCD-BA-AI –ABCG-BA-AI Cash flow from operating activities

Profit/loss after financial items XYX fb –Z

Adjustments for non-cash items – Depreciation/amortisation and impairments f _X` YZX Y`Y – Capital gain/loss from the disposal of non-current assets [_ X_ X_ – Unrealised foreign-exchange gains/losses –` ^ –Xa – Financial income Z –f –Z –Z – Financial expenses Xa ^aZ ^[_ ^_Z – Changes in provisions, pensions, etc. –XX –Z –f – Other items ^` _ X_ Cash flow from operating activities before changes in working capital ]ZY XI\ \I\

Cash flow from changes in working capital Change in inventories X_ Y –Z b Changes in operating receivables X` –XY^ [ ^a Changes in operating liabilities XZb fY XXZ Total changes in working capital W] \X IJT

Received interest income ZYY_ Tax paid XX –X – –^ Cash flow from operating activities Z`Y fZZ f``

Cash flow from investing activities

Changes in restricted bank accounts Xf YX XY –^` Investments in PPE and intangible assets excl. Financial leasing `, X^, X[ –^Z_ –[Z –X^b Divestment of buildings and land, vehicles, equipment, tools, fixtures and fittings X^, X[ YX XY [_ Cash flow from investing activities –YIU –II –IIX

Cash flow from financing activities

Repayment by installment of financial lease liability ^[ –_Y` –Yf` –Y[b Repayment by installment of bond loan and other external loans ^[ –Yf_ – –b[[ New issue of shares to senior executives b, XZ X – ^ New issue of shares (to bond holders) XZ – – XfX New borrowing, including payment of old bonds (SEK `b million) ^[ Yf[ – – New borrowing, other external loans ^[ X`f – – New borrowing ^[ – – __X Borrowing expenses, paid ^[ –Xf – –[Y Interest paid Xa –^X[ –^^Z –^Y_ Cash flow from financing activities –TIZ –\IW –\IW

Cash flow for the year IJI I\U UU

Cash and cash equivalents at the beginning of the year UZ] IU\ IZ\ Cash flow for the year XYX Xb[ [[ Exchange rate difference [ –X –[ Cash and cash equivalents at the end of the year Xf JWU UZ] IU\

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-5 FINANCIAL STATEMENTS

NOTE 1 Company information and accounting policies

COMPANY INFORMATION cannot be determined with certainty based on information from other Nobina AB is a public company (CIN 556576-4569, domiciled in Stock- sources. The actual outcome may differ from these assessments if holm) that is owned by around 50 shareholders and is the ultimate other assumptions are made or other circumstances are at hand, with a Parent Company of the Nobina Group (Nobina). The address of the head significant impact on Nobina’s earnings and financial position. Certain office is Armégatan 38, SE-171 71 Solna, Sweden. assumptions about the future and certain estimates and assessments Nobina AB’s operations, which are conducted through subsidiaries, on the balance-sheet date are particularly significant for the measure- consist of the provision of scheduled bus services under contract to ment of assets and liabilities in the balance sheet. The risk of changes public transport authorities in Sweden, Norway, Denmark and Finland. in carrying amounts during the coming year due to a possible need for In addition to contracted bus services, Nobina also offers extensive changes in assumptions and estimates is considered to lie primarily in express bus services throughout most of Sweden. Nobina AB is a hold- the following areas: ing company whose primary asset comprises the investment in Nobina Europe AB (with subsidiaries). For a description of the Company struc- Impairment of goodwill ture, see Note 14. The income statement and balance sheet of the The carrying amount of goodwill is tested for impairment annually and Parent Company and the consolidated income statement and balance otherwise, whenever circumstances or events indicate that the carry- sheet were approved for publication according to a Board decision on ing amount of an asset may not be recoverable. In determining the 23 April 2015. The income statement and balance sheet of the Parent recoverable value of cash-generating units for assessment of whether Company and the statement of comprehensive income and consoli- goodwill is impaired, several assumptions about future conditions and dated balance sheet will be subject to adoption by the Annual General estimates have been made. Forecasts for future cash flow are based on Meeting on 27 May 2015, in Stockholm. the best possible assessments of future income and operating expenses, which in turn are based on historical trends, general market APPLICABLE REGULATIONS conditions and other available information. The forecasts are prepared The consolidated financial statements were prepared in accordance for each operating unit and are based on each company’s profit/loss with the International Financial Reporting Standards (IFRS) adopted by before amortisation/depreciation, including leasing costs. The present the EU and the application of RFR 1 “Supplementary Accounting Rules value of cash flow forecasts is calculated by applying a reasonable dis- for Companys,” associated interpretations issued by the Swedish count rate for the capital plus a reasonable risk premium at the valua- Financial Reporting Board and the Swedish Annual Accounts Act. tion date, see Note 12. The annual report for the Parent Company was prepared in accordance with the Swedish Annual Accounts Act and recommendation RFR 2 Excess vehicles (buses) ”Accounting for Legal Entities”, as well as statements issued by the Before deemed as excess vehicle, a number of assumptions are made Swedish Financial Reporting Board. The Parent Company applies the about future alternatives for relocation. If vehicle deemed as excess, same accounting policies as the Company except for in those cases estimates are made about future resale value. Vehicles deemed as specified below under “Accounting policies of the Parent Company.” excess by management were impaired to fair value, see Note 13. The differences that exist are due to the limitations on applying IFRS in the Parent Company due to the Swedish Annual Accounts Act (ÅRL) Useful life for vehicles (buses) and, in certain cases, taxation purposes. When assessing whether the useful life of standard vehicles (buses) is the same as the actual useful life, a number of assumptions are made BASIS FOR VALUATION IN THE PARENT COMPANY AND about future conditions. CONSOLIDATED FINANCIAL STATEMENTS Company management is of the opinion that the useful life corre- Assets and liabilities are recognised at historical cost, except for cer- sponds to the average contact term, 8 years, which can be extended for tain financial assets and liabilities, which are measured at fair value or another 6 years, i.e. a total of 14 years. historical cost. Tax assets TRANSACTIONS TO BE ELIMINATED ON CONSOLIDATION In assessing whether to measure previously accumulated loss carry- All intra-Company receivables and liabilities, income, expenses or forwards, refer to Note 11, Company management has decided to report unrealised gains or losses arising on intra-Company transactions are a portion of the Company’s current loss carryforwards. Deferred tax has eliminated in their entirety when preparing the consolidated financial been calculated using tax rates that have been enacted, or are expected statements. to apply when the related deferred tax asset is realised or the tax liabil- ity is settled. Deferred tax assets are recognised to the extent that it is TRANSACTIONS IN FOREIGN CURRENCY probable that future taxable profit will be available, against which the Transactions in foreign currencies are translated to the functional temporary differences can be utilised. Most of the loss carryforwards currency at the rate of exchange in effect on the transaction date. The are attributable to countries with a long, or unlimited period of use. The functional currency is the currency of the primary economic environ- deferred tax asset that pertains to deductible temporary differences ments in which the Company conducts its operations. Monetary assets and unused tax losses has been reported to the extent that it is expected and liabilities in foreign currency are translated to the functional cur- to be utilised in the foreseeable future, and doing so is deemed probable. rency at the closing day rate. Exchange gains/losses arising on transla- tion are recognised in profit and loss. For the financial statements of Provisions for onerous contracts subsidiaries with a functional currency other than SEK, all balance The Company makes provisions for onerous contracts, where the con- sheet items are translated at the closing day rate of exchange. Income tractual income is not sufficient to cover the direct and apportionable statement items are translated at the average rate during the year. expenses for fulfillment of the contractual obligations. Several assump- tions have been made about future conditions and estimates of varia- FUNCTIONAL CURRENCY AND PRESENTATION CURRENCY bles. See Note 22. The functional currency of the Parent Company is Swedish kronor (SEK), which is also the presentation currency of the Parent Company Provisions for pensions and similar commitments and the Company. The financial statements are thus presented in SEK. The most significant assumptions that management must make in con- All amounts are rounded off to the nearest million, unless otherwise nection with actuarial estimates of pension commitments and pension stated. costs concern the discount rate, expected rate of return on plan assets, expected rate of salary increases and future rate of pension increases. ASSESSMENTS AND ESTIMATES IN THE FINANCIAL STATEMENTS The discount rate reflects the interest rate at which the pension com- When preparing the financial statements, company management and mitments could be paid in full. The interest rate used to discount pension the Board of Directors must make assessments that affect the recog- commitments is to be determined by referring to the market-based nised amounts of assets, liabilities and income and expenses and thus return on first-class mortgage bonds at the end of the reporting period. associated information about contingent items. These assessments The expected annual return on plan assets reflects the expected annual are based on historical experience and the various assumptions that return on existing investments. The plan assets comprise mainly management and the Board deem reasonable under the circumstances interest-bearing securities and shares. The expected rate of salary at hand. Thus, drawn conclusions form the basis for decisions regard- increases reflects expected future salary increases as a composite ing the carrying amounts of assets and liabilities, in cases where these effect of inflation and seniority. The assessment is based on historical

F-6 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

information concerning salary increases and on the expected future using the acquisition method. This means that acquired subsidiaries’ rate of inflation. The future rate of pension increases is assessed on the assets and liabilities are recognised at fair values according to an acqui- basis of the current age distribution of employees and expected per- sition analysis, prepared on acquisition date. If the cost for shares in the sonnel turnover. subsidiary and any holdings without a controlling influence (non-con- trolling interest) exceeds the fair value of the company’s identifiable NEW ACCOUNTING POLICIES net assets according to the acquisition analysis, the difference will New and revised standards 2014/15 represent consolidated goodwill, which will be tested for impairment. The changes presented below are those deemed to be relevant to the For every acquisition, it is determined whether holdings with a non- company. controlling interest will be valued at fair value or the proportional share of the acquired operation’s net assets. All acquisition-related costs are NJ IFRS 10 Consolidated Financial Statements. The standard provides expensed. Only income arising after the acquisition date is included in guidance on establishing whether a company controls another com- the consolidated shareholders’ equity. Income from the company that pany, which would then require consolidation in the consolidated was acquired during the year is included in the consolidated financial financial statements. statements from the date of acquisition. Companies divested during the NJ IFRS 11 Joint Arrangements. This accounting policy provides guidance year are included in the consolidated income statement with income on how to treat a joint venture, which is an arrangement whereby the and expenses for the period up to the date of divestment. partners who jointly have control over the arrangement are entitled to its net assets. Proportionate consolidation is no longer allowed. SEGMENT REPORTING Nobina conducts regional and interregional traffic between selected NJ IFRS 12 Disclosure of Interests in Other Entities. This pertains to the cities (Express traffic). Regional traffic is operated in large parts of disclosure requirements for subsidiaries, joint arrangements, asso- Sweden and in metropolitan areas in Finland, Denmark and Norway. ciates and unconsolidated structured companies. The largest portion of revenue is derived from contracts with public NJ Changes to IFRS 10,12 and IAS 27 on the consolidation of investment transport authorities representing the various counties. In nearly all companies. cases, public transport authorities receive ticket revenue and contract companies receive a fixed amount as payment for the contracted NJ IAS 28 Amendment to Investments in Associates and Joint Ventures services. NJ IAS 32 Financial Instruments: Offsetting of financial assets and liabil- Interregional traffic is conducted by Swebus Express (Swebus), ities may only occur in the balance sheet if there is a legally enforce- which operates certain predetermined routes throughout Sweden. able right to offset the amounts and the intention is to either settle on Revenue is generated by the sale of tickets to passengers. Some of the a net basis or simultaneously sell the asset and settle the liability. companies also conduct chartered traffic, mainly by using vehicles and personnel during periods when these are not occupied in regular traffic NJ IAS 36 Impairment of Assets – Recoverable amount. For non-financial operations. assets, disclosure of the recoverable amount is required only when The Company’s operations are reported and managed in a manner there is impairment of assets. The company decided on early adop- consistent with the internal reporting, see Note 2, which is provided to tion of revised IAS 36 for the financial year. the CEO. NJ IAS 39 Novation of derivatives and continuation of hedge accounting, The accounting policies for the reporting segments are the same as means that hedge accounting does not need to be discontinued if it those used in the consolidated financial statements. Nobina evaluates concerns derivatives that change counterpart due to introduction of operations in each operating segment based on the operating profit for clearing. each reporting operating segment, and normally recognises sales and transfers between operating segments on a third-party basis, meaning NEW STANDARDS AND INTERPRETATIONS NOT YET IN FORCE at market prices. Standards and interpretations not yet in force have not been applied for 2014/15 as follows. New standards and interpretations which are not Company-wide functions yet effective, could have an impact on the company in the future. Group Costs for Company-wide support functions such as IT, systems management has not yet made any detailed analysis of the effects from administration and legal services, etc., are allocated to the operating implementaion of IFRS 9 and IFRS 15, and can therefore not quantify the segments and countries according to their degree of utilisation. General effects. administrative expenses from Nobina AB (head office) and other costs that arise at the central level and are attributable to the entire company NJ IFRS 15 Revenue from Contracts with Customers. Revenue is recog- are not included in the earnings of the operating segments. The head nised when the customer gains control over the sold good or service. office consists of the Company management team, financial adminis- tration, controls and analyses. The operating assets included in each A customer has control over a good or service when it is possible to operating segment include all operating assets that are used in the direct the use of and obtain substantially all of the remaining benefits business activities, primarily intangible assets, PPE (Property, plant from the asset. IFRS 15 is effective as of 2017, but it has not yet been and equipment), inventories and accounts receivables. Most of these adopted by the EU. assets are directly attributable to the respective operating segment. NJ IFRS 9 Financial Instruments. This standard is one part of a complete The operating liabilities included in each operating segment include all revision to the current standard, IAS 39. The standard reduces the operating liabilities that are used, accrued expenses and deferred number of valuation categories for financial assets. As a result the income. Most of these liabilities are directly attributable to the respec- main categories are reported at cost (amortised cost) or fair value tive operating segment. Estimated deferred tax and external and inter- through profit or loss. This first part of the standard will be expanded nal loans are not included in the operating segments’ capital employed. with new requirements for impairment of financial assets measured at amortised cost, hedge accounting and offsetting in the balance REVENUE RECOGNITION sheet. IFRS 9 is to be applied to fiscal years beginning on or after 1 July Most of Nobina’s income consists of remuneration for scheduled bus 2018. However, the standard has not yet been adopted by the EU. traffic and is attributable to contracts with public transport authorities that run for a term of five to ten years, with an extension option. Regard- less of the payment stream for operations under a contract, Nobina SIGNIFICANT ACCOUNTING POLICIES reports its revenues when the services have been provided and can be measured at the fair value of the consideration that has been, or will be CONSOLIDATED FINANCIAL STATEMENTS received. The consolidated financial statements comprise all companies in which Nobina AB directly or indirectly has more than 50% of the votes or oth- Production contracts erwise has a controlling influence. Subsidiaries are all companies Most of the contracts are of the prodution -contract type, in which com- (including structured companies) that the Company is able to control. pensation is based exclusively on the number of kilometers or hours The Company controls a company when exposed to, or when it has a driven and is entirely unrelated to the number of passengers. The right to variable returns from its holdings in the company and when it is amount of compensation is often tied to certain cost indices in order to able to affect the return via its influence over the company. Subsidiaries compensate the traffic companies for cost increases during the term of are consolidated as of the date when the Company obtains control. the contract. The compensation is adjusted during the term of the Subsidiaries are de-consolidated as of the date when the Company no contract due to changes in these indices. Nobina adjusts its revenues longer has control. Consolidated financial statements are prepared during the contract period according to the agreed indexation formula.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-7 FINANCIAL STATEMENTS

Incentive contracts FINANCIAL INCOME AND EXPENSES Some of Nobina’s contracts with it’s client public transport authorities Financial income and expenses consist of interest income on bank are designed so that all or part of the compensation is based on the funds, funded pension assets and receivables, interest expense on number of passengers. These are called incentive contracts. Revenue loans, interest expense on vehicles under a finance lease, the interest from these contracts is recognised on the date that the passenger portion of pension liability, plus realised and unrealised gains and travels with Nobina. losses attributable to financing. Interest income and interest expense Revenue from ticket sales, in production contracts or incentive con- are recognised in the period in which they arise. tracts, is passed on directly to clients and does not accrue to Nobina. INCOME TAXES Interregional traffic The Company’s income taxes consist of current tax and deferred tax. Revenue from interregional traffic consists of ticket revenues from the Income taxes are reported in the income statement, unless the under- passengers. For interregional traffic, revenue is recognised on the date lying transaction is reported directly in equity or other comprehensive that the passenger travels with Nobina. income. In such cases, the related tax affect is also recognised directly in equity or in other comprehensive income. Current tax refers to taxa- Leases, fuel sales and maintenance services ble profit and loss for the year. Deferred tax is calculated based on the Revenue from leases, fuel sales and maintenance services is recog- temporary differences between the carrying amount and taxable values nised when the goods are delivered and the services performed. of assets and liabilities, as well as tax on the consolidated tax loss carry- forwards. Deferred tax is calculated according to the applicable tax rate Short-term leasing of buses in each country. Deferred tax assets are recognised only to the extent In cases where revenue is obtained through operating leases, it is that it is probable that they can be utilised against future taxable profits. distributed evenly over the term of the lease. Tax laws in Sweden and Finland permit provisions to special reserves All revenue is recognised excluding value added tax. and funds which constitute temporary differences. Within specified limits, this enables companies to retain profits in the company without EXPENSES immediate taxation of these profits. The untaxed reserves are not sub- The Company’s operating expenses pertain primarily to fuel, tires, oper- ject to taxation until they are dissolved. However, during years when ating lease costs for vehicles, personnel costs, which include salaries, the operations make a loss, the untaxed reserves can be utilised to social security costs, pensions, costs for bus drivers, and depreciation cover losses without giving rise to any taxation. In the consolidated costs for vehicles under finance leases and owned vehicles. balance sheet, untaxed reserves for the individual companies are allo- cated between shareholders’ equity and deferred tax liabilities. In the Leasing income statement, deferred tax is recognised as tax attributable to the In the consolidated financial statements, leasing is classified as either change in untaxed reserves for the year. financial leasing or operating leasing. Most of Nobina’s leasing is classi- fied as financial leasing, see Note 6. In a finance lease, the main financial INTANGIBLE AND TANGIBLE NON-CURRENT ASSETS risks and benefits are transferred to the lessee. If this is not the case, Goodwill the agreement is considered to be an operating lease. Finance leases After initial recognition, goodwill is measured at cost, less deductions are recognised as non-current assets in the balance sheet and the for any accumulated impairments. Goodwill is not amortised, but is corresponding leasing commitment is recognised as a liability. Assets tested annually, or more often if there are indications of a decrease in and liabilities at the beginning of a leasing agreement are measured at value. Impairment losses are never reversed. For the purpose of testing the lower of fair value and the present value of future lease payments. impairment requirements, goodwill is allocated to the Company’s cash- Assets held under finance leases are depreciated on a straight-line generating units, which are the same as those used in the segment basis over their estimated useful lives in accordance with the principles accounting. Recoverable amounts are determined based on calcula- used for similar asset groups. The useful life periods do not follow the tions of the value in use. The recoverable amount is the highest of value payment periods in the lease contracts, since the company considers in use and net realisable value. These calculations are based on an that the benefits from the leased vehicles extend longer than the internal assessment of the next five years with various growth rates per related financial obligation. Finance lease payments are apportioned segment area. Anticipated future cash flows in accordance with these between the finance charge and the reduction of the outstanding liabil- assessments constitute the grounds for the calculation. Working capi- ity to produce a constant periodic rate of interest on the remaining tal changes and investment requirements have hereby been taken into balance of the liability. In the income statement, the leasing expenses account. If such an analysis indicates that the carrying amount is are recognised as depreciation and interest expenses. For operating higher than the recoverable amount, which is the highest of fair value leases, no assets or liabilities are recognised in the balance sheet. In the and value in use, the difference between the carrying amount of good- income statement, leasing expenses are recognised on a straight-line will and the recoverable amount will be recorded as an impairment loss. basis over the term of the lease. The value in use is measured as the anticipated future discounted cash flow generated by the asset. Depreciation/amortisation Depreciation/amortisation of property, plant and equipment and intan- Other intangible and tangible non-current assets gible assets is based on the historic cost and estimated useful lives of Other intangible assets and items of property, plant and equipment are different groups of non-current assets. Depreciation/amortisation recognised at historical cost less amortisation/depreciation and any takes place on a straight-line basis over the useful life of the assets to an impairment losses. Cost consists of the purchase price as well as costs estimated residual value. For assets acquired during the year, deprecia- directly attributable to bringing and installing the asset to working con- tion/amortisation is calculated from the acquisition date. dition for its intended use. Any discounts or bonuses are deducted from the cost amount. Other intangible assets consist primarily of externally Applied useful lives capitalised development costs, which are mostly software. Proprietary software and software maintenance are expensed as incurred. An item Other intangible assets max 3 years of property, plant and equipment is recognised as an asset when the Software development cost can be calculated in a reliable manner and when, based on availa- Computers 3 years ble information, it is probable that the future financial benefits con- Office equipment and furniture 5 years nected with ownership will accrue to the company. An item of property, plant and equipment is recognised at the time of delivery, as stated on Vehicles the invoice or packing slip. The carrying amounts of non-current assets Standard buses 14 years are regularly tested for impairment. If, on the date of the year-end Long-distance buses 10 years report, there is an indication that a non-current asset has declined in value, a calculation is made of the asset’s net realisable value and value Special buses, according to individual valuation in use. The net realisable value consists of the price that is estimated to Remodeling of leased premises 5 years, but not be received in the event of disposal of the asset less selling expenses. exceeding the term An write-down requirement is considered to exist when the present of the lease value of the future cash flow from these assets falls below their carrying amount. The impairment amount consists of the difference between the higher of the value in use or net realisable value and the carrying amount. For non-current assets that will be divested, the potential

F-8 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

impairment amount is calculated as the difference between the esti- counted. Impairment of held-to-maturity investments and loans and mated sales revenue less associated costs and the asset’s carrying receivables recognised at amortised cost are reversed if a later increase amount. in the recoverable amount can be objectively attributed to an event occurring after the date of the impairment loss. INVENTORIES Inventories are stated at the lower of cost and fair value, on a first in, OTHER PROVISIONS AND PROVISIONS FOR PENSIONS AND SIMILAR first out basis. The necessary provisions are made for obsolescence, COMMITMENTS partly on a case-by-case basis and partly through collective assess- A provision is recognised in the balance sheet when the Company has a ment. current legal or informal obligation that has arisen as a result of a past event, it is probable that an outflow of resources will be required to FINANCIAL ASSETS AND LIABILITIES AND OTHER FINANCIAL settle the obligation and the amount can be estimated reliably. When INSTRUMENTS the timing effect of payment is significant, provisions are measured at Financial instruments are initially recognised at cost, corresponding to discounted present value using a pretax discount rate that reflects fair value including transaction costs for all financial instruments aside current market assessments of the time value of money. from those in the category of financial assets and liabilities measured at fair value through profit or loss . Subsequent to initial recognition, the Termination remuneration accounting treatment of financial liabilities depends on how they are A provision is only recognised if the company is demonstrably commit- classified, as described below. ted to terminate an employment contract before the normal retirement A financial asset or liability is recognised in the balance sheet when date. In the event of termination, the company draws up a detailed plan the company initially becomes party to the contractual provisions of that, at a minimum, states the place of work, as well as the amount of the instrument. Accounts receivable are recognised in the balance compensation for each employee and the time of the plan’s implemen- sheet when an invoice has been issued. Financial liabilities are recog- tation. nised when the counterparty has performed and there is contractual obligation to pay, even if no invoice has been received. Accounts paya- Onerous contracts ble are recognised when an invoice has been received. A large share of the revenues is attributable to contracts with public A financial asset is derecognised from the balance sheet when the transport authorities where the contracts extend for between five and company’s rights under the agreement are realised, expire or the com- eight years. The contractual terms commonly stipulate that the reve- pany has relinquished control of the asset. The same applies to a part of nues shall be adjusted upwards in accordance with set indexes, either a financial asset. A financial liability is derecognised from the balance consumer price indexes or various producer price indexes. Due to sheet when the obligation specified in the agreement is discharged or changed conditions and because the costs increase more than the otherwise extinguished. The same applies to a part of a financial liability. revenues, the contracts can become loss or onerous contracts, which On each reporting date, the Company assesses whether there is objec- is when the remaining contracted revenues are not enough to cover the tive evidence of impairment for a financial asset or group of financial costs attributable to the contracts to fulfill the contractual commit- assets. The Company has not applied hedge accounting for the 2014/15, ment. A provision for future losses is then made in the period that man- 2013/14 and 2012/2013 fiscal years. agement identifies the contract as an onerous contract. The loss is estimated by including direct and indirect costs attributable to the con- Financial assets and liabilities measured at fair value through profit tract, including depreciation of buses used to fulfill the commitment. and loss The provision is made at the public transport authority level if there is a Assets and liabilities in this category consist of derivatives measured natural connection between the various contracts. In a tender process, at fair value with fair value changes recognised through profit or loss. tenders can be submitted for multiple contracts, where some are profit- Fair values are based on prices listed in an active market, corresponding able and others entail a loss, but the transaction as such provides a to IFRS Level 1. surplus.

Loan and accounts receivable Third-party obligations Receivables are recognised at the amount in which they are expected Provisions are made for damages that occurred to the Company’s own to be received after deduction for doubtful debts, which are assessed vehicles that have not complied with traffic safety or contract require- individually. When the expected maturity is short, the receivable is ments or against third parties. The provision must cover future obliga- recognised at nominal value without discounting. Impairment losses tions to third parties. on receivables are recognised in operating expenses. Environmental obligations Restricted bank accounts Provisions are made for existing and future environmental obligations Restricted bank accounts comprise deposits for bank guarantees and on leased land and facilities that are, or have been, used in operations. leasing contracts. Bank guarantees have been furnished as security for Nobina Norge AS and Nobina Danmark A/S’s traffic contract commit- Employee remuneration ments, Nobina Sverige AB and Swebus Express AB’s commitments Current employee remuneration is calculated without discounting and under the Swedish Travel Guarantee Act, and Nobina Sverige AB obliga- recognised as an expense when the related services were rendered. tions in respect of electricity purchases. Nobina Norway also has restricted bank accounts for tax payments. Nobina AB’s restricted bank Pensions accounts are deposits for leases. The Company has both defined-contribution and defined-benefit pen- sion plans. The pension liabilities pertain to defined-benefit pensions, Cash and cash equivalents calculated annually in accordance with IAS 19 with assistance from Cash and cash equivalents consist of demand deposits at banks. an independent actuary. In the defined-contribution pension plans, Nobina pays a fixed contribution according to plan and has no further Other financial liabilities obligation to pay post employment contributions. Under the defined Liabilities are classed as other financial liabilities, which means that benefit for Nobina Norge AS and Nobina Europe AB, benefits are paid to they are initially recognised at the amount received less transaction former employees on the basis of final salary and years of service. The costs. Fees paid on long-term borrowings are expensed over the term of Company bears the risk of ensuring that the contractual benefits are the loan. paid. After the acquisition date, liabilities are measured at amortised cost Pension obligations for most of the Swedish operations are covered using the effective interest method. Accounts payable are classified as by a multi-employer, defined-benefit pension plan. The plan is insured other financial liabilities. Accounts payable have a short expected in the mutual insurance company Alecta. The Company has not had maturity and are measured at nominal value without discounting. access to sufficient information to report its proportional share of the defined-benefit obligation and of the plan assets and expenses. The Impairment of financial assets plan is therefore recognised as a defined-contribution plan, which Any impairment requirements of financial assets in the categories of means that premiums paid are recognised as a personnel expense. held-to-maturity investments and loans and receivables measured at In the Swedish operations, there is also a defined- benefit pension plan amortised cost are calculated as the present value of future cash flows that is funded. Alecta’s consolidation level as of 31 December 2014 discounted at the effective rate in force on initial recognition of the amounts to 144 (148) percent. The Company’s obligations pertaining to asset. Assets with a time to maturity of less than one year are not dis- other defined-benefit plans are determined separately for each plan

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-9 FINANCIAL STATEMENTS

according to the Projected Unit Credit Method. This means that the cash flow from investing activities. Interest paid, such as the interest obligation is calculated as the present value of expected future pension portion on vehicles under a finance lease and interest on external short payments. The obligation calculated accordingly is compared with the and long-term borrowings, is reported in the cash flow from financing fair value of the plan assets that secure the obligation. The difference is activities, while payments received for interest revenue are reported in recognised as a liability/asset with respect to accrued actuarial gains/ the cash flow from operating activities. losses. The calculation of the future payments is based on actuarial assumptions for life expectancy, future salary increases, employee PARENT COMPANY ACCOUNTING POLICIES turnover and other factors that influence the choice of discount rate. The financial statements for the Parent Company, Nobina AB, were As of the 2013/2014 financial year, Nobina reports in accordance with prepared in accordance with the Annual Accounts Act, other Swedish and going forward IFRS (IAS 19), where the previous use of the corridor legislation and recommendation RFR 2 “Accounting for Legal Entities”. method for defined-benefit pension plans was terminated. The net Any deviations that arise between the Parent Company and the Com- value of return on assets and interest expenses for pension liabilities are pany’s policies are due to limitations in the ability to apply IFRS in the reported in financial income or expenses. Payroll tax attributable to Parent Company due to the Swedish Annual Account Act and, in some actuarial gains and losses is weighted into the calculation of actuarial cases, tax reasons. gains and losses. Company contribution for legal entities EARNINGS PER SHARE In accordance with RFR 2 and IAS 27, Company contributions that Earnings per share before dilution are calculated by taking the net profit Nobina AB receives from subsidiaries are recognised as financial attributable to Parent Company shareholders and dividing it by the income, and Company contributions that Nobina AB pays to subsidiaries average number of outstanding shares. Earnings per share after dilu- are recognised as participations in subsidiaries, in the same way as tion is calculated by dividing the net profit attributable to the Parent shareholders’ contributions. Company contributions that are paid by, Company’s shareholders by an adjusted average number of outstand- or received from, another company in the same company are basically ing shares, if potential ordinary shares may give rise to dilution. a method for reducing the Company’s taxable income. Sometimes a Company contribution can also be placed on a par with a type of capital CASH FLOW transfer between companies in the same company, depending on the The cash flow statement has been prepared based on profit and loss purpose. and other changes between the opening and closing balances in the balance sheet, taking into account translation differences. The cash Shares in subsidiaries flow statement was prepared according to the indirect method. The Participations in subsidiaries are recognised in the Parent Company recognised cash flow consists of transactions that generate deposits according to the cost method. All dividends from subsidiaries are and payments. Cash and cash equivalents in the cash flow statement recognised in the Parent Company income statement. In particular cir- include cash in hand, driver cash and bank funds excluding restricted cumstances, such a dividend may indicate that the value of the shares bank accounts. Items that do not affect the cash flow include provisions, has fallen and that an impairment test should therefore be carried out. depreciation/amortisation and unrealised exchange-rate differences, since they are not cash-based items. Realised profits and losses in con- Pensions nection with the divestment of assets are eliminated since the cash Pension obligations are valued in accordance with the Swedish Pension effect of divesting non-current assets is recognised separately under Obligations Vesting Act.

NOTE 2 Nobina’s operating segments

Total Central Total Inter- functions Nobina Nobina Nobina Nobina Elimi- Regional regional and other Elimi- 2014/2015 Sweden Denmark Norway Finland nation * traffic Swebus ** traffic items *** nation Total Net sales 5,138 395 943 812 –22 7,266 284 283 49 –49 7,549 Operating profit/loss 373 –15 –2 47 – 403 9 9 –41 – 371 EBIT (%) 7.3 –3.7 –0.0 5.8 – 5.5 3.1 3.1 – – 4.9

Net financial items – – – – – – – – –230 – –230 Income tax – – – – – – – – –47 ––47 Profit for the year – – – – – – – – – – 94

Of which operating lease expenses 67 22 2 6 – 97 – – – – 97 Amortisation and impairments 346 16 76 50 – 488 16 16 12 – 516 Of which depreciation of assets held under finance leases 306 10 67 46 – 429 15 15 – – 444

Total assets 3,864 344 914 634 – 5,756 124 124 696 – 6,576 Of which intangible assets, goodwill 383 – 131 29 – 543 45 45 – – 588 Of which assets held under finance leases 2,825 100 604 479 – 4,008 60 60 – – 4,068 Investments in PPE and financial assets for the year 750 170 29 70 – 1,019 – – 21 – 1,040

Total liabilities 3,701 356 807 593 – 5,457 97 97 712 – 6,266 Of which finance lease liabilities 2,577 92 551 421 – 3,641 58 58 – – 3,699

Average number of employees 8,181 531 1,245 1,036 – 10,993 342 342 10 – 11,345 Number of employees translated to FTEs 5,408 356 820 838 – 7,422 171 171 10 – 7,603

*) Elimination between different segments. ** ) The majority of Swebus’ operations is attributable to Sweden. *** ) Central functions consist of Nobina’s central administration, the Company’s financial net income and the Company’s income taxes.

F-10 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

NOTE 2 cont.

Total Central Total Inter- functions Nobina Nobina Nobina Nobina Elimi- Regional regional and other Elimi- 2013/2014 Sweden Denmark Norway Finland nation * traffic Swebus ** traffic items *** nation Total Net sales 4,853 346 995 802 –43 6,953 316 316 183 –183 7,269 Operating profit/loss 328 –14 –3 45 – 356 3 3 –33 – 326 EBIT (%) 6.7 –4.0 –0.3 5.6 – 5.1 0.9 0.9 – – 4.5

Net financial items – – – – – – – – –239 – –239 Income tax – – – – – – – – –31 – –31 Profit for the year – – – – – – – – – – 56

Of which operational leasing expenses 101 28 3 9 – 141 – – – – 141 Amortisation and impairments 314 13 82 49 – 458 18 18 15 – 491 Of which depreciation of assets held under finance leases 274 9 67 42 – 392 14 14 – – 406

Total assets 3,486 151 1,002 590 – 5,229 135 135 559 – 5,923 Of which intangible assets, goodwill 383 – 128 29 – 540 45 45 – – 585 Of which assets held under finance leases 2,510 105 685 438 – 3,738 73 73 – – 3,811 Investments in PPE and financial assets for the year 226 6 5 45 – 282 1 1 8 – 291

Total liabilities 3,312 154 867 571 – 4,904 114 114 681 – 5,699 Of which finance lease liabilities 2,320 99 641 395 – 3,455 68 68 – – 3,523

Average number of employees 6,843 501 1,270 1,056 – 9,670 399 399 83 – 10,152 Number of employees translated to FTEs 5,158 382 927 804 – 7,271 193 193 83 – 7,547

Total Central Total Inter- functions Nobina Nobina Nobina Nobina Elimi- Regional regional and other Elimi- 2012/2013 Sweden Denmark Norway Finland nation * traffic Swebus ** traffic items *** nation Total Net sales 4,808 341 946 801 –39 6,857 355 355 160 –160 7,212 Operating profit/loss 303 –26 –25 32 284 5 5 –43 246 EBIT (%) 6.3 –7.6 –2.6 4.0 4.1 1.4 1.4 – – 3.4

Net financial items – – – – – – – – –255 – –255 Income tax – – – – – – – – 69 –69 Profit for the year – – – – – – – – 60 – 60

Of which operational leasing expenses 151 30 5 15 – 201 1 1 – – 202 Amortisation and impairments 294 12 77 45 – 428 18 18 18 – 464 Of which depreciation of assets held under finance leases 246 8 61 35 – 350 18 18 – – 368

Total assets 3,486 144 1,324 598 – 5,552 169 169 321 – 6,042 Of which intangible assets, goodwill 383 – 134 29 – 546 45 45 – – 591 Of which assets held under finance leases 2,569 102 789 427 – 3,887 102 102 – – 3,989 Investments in PPE and financial assets for the year 738 34 277 185 – 1,234 – – 22 – 1,256

Total liabilities 3,265 154 1,032 543 – 4,994 148 148 713 – 5,855 Of which finance lease liabilities 2,432 99 756 394 – 3,681 97 97 – – 3,778

Average number of employees 5,093 409 1,019 1,093 – 7,614 481 481 67 – 8,162 Number of employees translated to FTEs 5,097 355 1,192 949 – 7,593 214 214 61 – 7,868

*) Elimination between different segments. ** ) The majority of Swebus’ operations is attributable to Sweden. *** ) Central functions consist of Nobina’s central administration, the Company’s financial net income and the Company’s income taxes.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-11 FINANCIAL STATEMENTS

NOTE 3 Net sales

Net sales include other operating income, which primarily consists of (25 percent and 16 percent) of Nobina’s net sales and in the Nobina revenue from leasing, the sale of fuel and diesel and revenue from work- Finland segment, net sales to one (one) major customer represent shop services to external customers. Net sales to two (two and one) 11 percent (11 percent and 11 percent) of Nobina’s net sales. major customers in the Nobina Sweden segment represent 31 percent

2014-03-01 2013-03-01 2012-03-01 Distribution of net sales, SEK million –2015-02-28 –2014-02-28 –2013-02-28 Sales Regional and Interregional traffic 7,542 7,260 7,202 Leasing, workshop services and sale of diesel 7 9 10 Total net sales 7,549 7,269 7,212

NOTE 4 Operating expenses

2014-03-01 2013-03-01 2012-03-01 SEK million –2015-02-28 –2014-02-28 –2013-02-28 Fuel 1,084 1,124 1,169 Tires and other consumables 571 520 533 Total fuel and other consumables 1,655 1,644 1,702

Leasing expenses 97 141 202 Other external expenses 994 960 977 Total other expenses 1,091 1,101 1,179

Salary expenses 2,955 2,783 2,725 Employer’s contributions 691 639 599 Pension expenses 187 210 215 Other personnel costs 48 60 67 Total personnel costs 3,881 3,692 3,606

NOTE 5 Fees and remuneration to auditors

2014-03-01 2013-03-01 2012-03-01 Fees and compensation to auditors, SEK thousand –2015-02-28 –2014-02-28 –2013-02-28 Audit assignment PWC 2,430 – – Audit assignment Ernst & Young – 3,879 3,966 Audit-related services in addition to audit assignment ––– Tax advisory services ––– Other services PWC, pertains to consulting on defined-benefit pension plans 200 – – Other services Ernst & Young, pertains to consulting services for the Company – 2,290 720 Total 2,630 6,169 4,686

F-12 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

NOTE 6 Leasing

FINANCE LEASES BUSES

Assets held under finance leases, Leasing fees for finance leases per 2014-03-01 2013-03-01 2012-03-01 SEK million 2015-02-28 2014-02-28 2013-02-28 segment, SEK million –2015-02-28 –2014-02-28 –2013-02-28 Cost Nobina Sweden 471 426 404 Opening balance 5,495 5,287 4,247 Nobina Denmark 16 15 13 New contracts signed during Nobina Norway 111 117 113 the year 745 252 1,129 Nobina Finland 73 66 54 Sales for the year –199 –35 –22 Total Regional traffic 671 624 584 Exchange rate difference 58 –9 –67 Closing cost 6,099 5,495 5,287 Swebus 19 18 23 Total Interregional traffic 19 18 23 Accumulated amortisation Total Financial leasing fees 690 642 607 Opening accumulated amortisation –1,684 –1,298 –952 Amortisation for the year –444 –406 –368 Sales for the year 112 19 10 Depreciation of assets held under Exchange rate difference –15 1 12 finance leases per segment, 2014-03-01 2013-03-01 2012-03-01 Closing accumulated SEK million –2015-02-28 –2014-02-28 –2013-02-28 amortisation –2,031 –1,684 –1,298 Nobina Sweden 306 274 246 Residual value according to plan 4,068 3,811 3,989 Nobina Denmark 10 9 8 Nobina Norway 67 67 61 Nobina Finland 46 42 35 During the year, the Company entered into finance lease agreements Total Regional traffic 429 392 350 for SEK 745 (252 and 1,129) million via the subsidiary, Nobina Fleet AB. Assets held under finance leases are depreciated in accordance with Swebus 15 14 18 the same depreciation principles as owned assets. The grounds for how Total Interregional traffic 15 14 18 the company’s fees are established are based on the lease terms. The Total Depreciation of assets leasing expenses are normally based on either straight-line amortisa- held under finance leases 444 406 368 tion or an annuity payment with variable amortisation over time. The proportion of straight-line amortisation amounts to approximately 46 (approximately 50 and approximately 50) percent. Nobina’s standard contracts have a duration of more than 10 years at 10 percent residual Interest expenses for finance lease 2014-03-01 2013-03-01 2012-03-01 value. Interest expense is calculated as the contract interest rate on the liabilities per segment, SEK million –2015-02-28 –2014-02-28 –2013-02-28 outstanding liability at all times. The contract interest rate normally Nobina Sweden 93 100 112 comprises a variable base interest rate such as STIBOR with the addi- Nobina Denmark 4 4 4 tion of a fixed margin. Nobina is liable for the remaining residual value at the end of the agreement. No substantial secondary leasing of leased Nobina Norway 30 35 38 buses took place during the fiscal year. Nobina Finland 14 13 11 Total Regional traffic 141 152 165

Assets held under finance leases per Swebus 3 3 5 segment, SEK million 2015-02-28 2014-02-28 2013-02-28 Total Interregional traffic 3 3 5 Nobina Sweden 2,825 2,510 2,569 Total Interest expenses for Nobina Denmark 100 105 102 finance lease liabilities 144 155 170 Nobina Norway 604 685 789 Nobina Finland 479 438 427 Total Regional traffic 4,008 3,738 3,887

Swebus 60 73 102 Total Interregional traffic 60 73 102 Total assets held under finance leases 4,068 3,811 3,989

Finance lease liabilities per segment, SEK million 2015-02-28 2014-02-28 2013-02-28 Nobina Sweden 2,577 2,320 2,432 Nobina Denmark 92 99 99 Nobina Norway 551 641 756 Nobina Finland 421 395 394 Total Regional traffic 3,641 3,455 3,681

Swebus 58 68 97 Total Interregional traffic 58 68 97 Total Finance lease liabilities 3,699 3,523 3,778

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-13 FINANCIAL STATEMENTS

NOTE 6 cont.

Present value of future minimum leasing fees for finance leases grouped by maturity date

Expected maturity 2015-03-01 and later Q1 Q2 Q3 Q4 2016/17 2017/18 2018/19 Later Total Future minimum leasing fees 199 270 186 168 859 522 536 1,398 4,138 Present value of future minimum leasing fees 198 265 182 163 812 480 476 1,114 3,960

Expected maturity 2014-03-01 and later Q1 Q2 Q3 Q4 2016/17 2017/18 2018/19 Later Total Future minimum leasing fees 226 160 158 168 768 776 433 1,375 4,064 Present value of future minimum leasing fees 223 157 154 162 721 698 378 1,030 3,523

Expected maturity 2013-03-01 and later Q1 Q2 Q3 Q4 2016/17 2017/18 2018/19 Later Total Future minimum leasing fees 161 277 153 154 662 719 731 1,528 4,385 Present value of future minimum leasing fees 159 272 148 148 620 643 626 1,162 3,778

Future minimum leasing fees for Nominal value of future minimum 2014-03-01 2013-03-01 2012-03-01 finance lease liabilities and their 2014-03-01 2013-03-01 2012-03-01 leasing fees per segment, SEK million –2015-02-28 –2014-02-28 –2013-02-28 present value, SEK million –2015-02-28 –2014-02-28 –2013-02-28 Nobina Sweden 273 241 350 Total future minimum leasing fees 4,138 4,064 4,385 Nobina Denmark – 11 25 Less interest charge –448 –541 –607 Nobina Norway – 1 4 Present value of future minimum Nobina Finland 12 14 26 leasing fees 3,960 3,523 3,778 Total Regional traffic 285 267 405

Swebus ––– OPERATING LEASES BUSES Total Interregional traffic – – – Operating leases (vehicles), Total Nominal value of future SEK million 2015-02-28 2014-02-28 2013-02-28 minimum leasing fees 285 267 405 Fees for operating leases for the year 97 141 202 Number of operating leases 480 764 857 Present value of future minimum leasing fees for operating leases per 2014-03-01 2013-03-01 2012-03-01 segment, SEK million –2015-02-28 –2014-02-28 –2013-02-28 Future minimum leasing fees for Nobina Sweden 256 225 322 non-cancellable operating leases, SEK million 2015-02-28 2014-02-28 2013-02-28 Nobina Denmark – 11 26 Total future minimum leasing fees 285 267 405 Nobina Norway – 1 4 Less interest charge –17 –17 –28 Nobina Finland 12 13 25 Present value of future minimum Total Regional traffic 268 250 377 leasing fees 268 250 377 Swebus – – 0 Total Interregional traffic – – 0 The grounds for how variable fees are established based on the lease Total Present value of future terms. The leasing expenses are normally based on either straight-line minimum leasing fees for operating leases 268 250 377 amortisation or an annuity payment with variable amortisation over time. The proportion of contracts with annuity payments is approxi- mately 95 percent of the operating contracts. The durations of the operating contracts are divided into blocks where the first one is usually five years with a residual value of approximately 40 percent and then extensions of up to seven years, with residual values down to 0 percent. Interest expense is calculated as the contract interest rate on the out- standing liability at all times. The contract interest rate normally com- prises a variable base interest rate such as STIBOR or EURIBOR with the addition of a fixed margin. At the end of the contracts, the buses are returned to the lessor. The lessor is responsible for the residual value. No substantial secondary leasing of leased buses took place during the fiscal year.

Operating lease expenses per 2014-03-01 2013-03-01 2012-03-01 segment, SEK million –2015-02-28 –2014-02-28 –2013-02-28 Nobina Sweden 67 101 151 Nobina Denmark 22 28 30 Nobina Norway 2 3 5 Nobina Finland 6 9 15 Total Regional traffic 97 141 201

Swebus – 0 1 Total Interregional traffic – 0 1 Total Operational leasing expenses 97 141 202

F-14 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

NOTE 6 cont.

Present value of future minimum leasing fees for operating leases grouped by maturity date

Expected maturity 2015-03-01 and later Q1 Q2 Q3 Q4 2016/17 2017/18 2018/19 Later Total Future minimum leasing fees 13 12 12 12 46 35 29 126 285 Present value of future minimum leasing fees 13 12 12 12 44 34 28 113 268

Expected maturity 2014-03-01 and later Q1 Q2 Q3 Q4 2015/16 2016/17 2017/18 Later Total Future minimum leasing fees 27 24 18 13 42 34 24 85 267 Present value of future minimum leasing fees 27 23 18 12 40 32 22 76 250

Expected maturity 2013-03-01 and later Q1 Q2 Q3 Q4 2014/15 2015/16 2016/17 Later Total Future minimum leasing fees 36 34 30 29 85 45 37 109 405 Present value of future minimum leasing fees 36 34 30 28 82 42 34 91 377

OTHER OPERATING LEASES – COMPANY

Paid and future rents in accordance with non-cancellable agreements where obligations exceed one year.

2014-03-01 SEK million –2015-02-28 2015/16 2016/17 2017/18 Later Total Property rents 183 197 182 160 180 902 Leases for vehicles excluding buses 10 9 8 2 – 29 Other operating leases ––––– – Total Nominal value of other operating leases 193 206 190 162 180 931

2013-03-01 SEK million –2014-02-28 2014/15 2015/16 2016/17 Later Total Property rents 165 180 145 147 564 1,201 Leases for vehicles excluding buses 9 8 6 4 4 31 Other operating leases – 25 – – – 25 Total Nominal value of other operating leases 174 213 151 151 568 1,257

2012-03-01 SEK million –2013-02-28 2013/14 2014/15 2015/16 Later Total Property rents 140 160 132 110 172 714 Leases for vehicles excluding buses 2 6 3 – – 11 Other operating leases ––––– – Total Nominal value of other operating leases 142 166 135 110 172 725

NOTE 7 Personnel

2014-03-01 2013-03-01 2012-03-01 2014-03-01 2013-03-01 2012-03-01 Number of employees –2015-02-28 –2014-02-28 –2013-02-28 Number of employees –2015-02-28 –2014-02-28 –2013-02-28 Average number of employees Norway 1,245 1,270 1,019 of whom men 11,345 10,152 8,162 of whom men 1,143 1,165 938 of whom women 9,732 8,734 7,003 of whom women 102 105 81 Number of employees Number of employees translated to FTEs 1,613 1,418 1,159 translated to FTEs 820 927 1,192 Number of employees 7,603 7,547 7,868 Finland 1,036 1,056 1,093 Sweden 8,533 7,325 5,641 of whom men 983 1,003 1,035 of whom men 7,160 6,121 4,684 of whom women 53 53 58 of whom women 1,373 1,204 957 Number of employees Number of employees translated to FTEs 838 804 949 translated to FTEs 5,589 5,434 5,372

Denmark 531 501 409 of whom men 446 445 346 of whom women 85 56 63 Number of employees translated to FTEs 356 382 355

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-15 FINANCIAL STATEMENTS

NOTE 7 cont.

EMPLOYEE BENEFIT EXPENSES

SEK million 2014-03-01–2015-02-28 2013-03-01–2014-02-28 2012-03-01–2013-02-28 Salaries and Of which Salaries and Of which Salaries and Of which other remu- Payroll pension other remu- Payroll pension other remu- Payroll pension neration overheads costs neration overheads costs neration overheads costs Parent Company 24 13 6 58 31 13 45 24 10 Subsidiaries in Sweden 1,926 655 77 1,716 611 88 1,689 592 101 Total Sweden 1,950 668 83 1,774 642 101 1,734 616 111

Foreign subsidiaries Denmark 213 34 20 183 30 17 182 28 17 Norway 428 91 20 447 89 23 432 85 24 Finland 364 85 64 379 88 69 377 85 63 Total foreign subsidiaries 1,005 210 104 1,009 207 109 991 198 104

Total Company 2,955 878 187 2,783 849 210 2,725 814 215

Board members and senior 2015-02-28 2014-02-28 2013-02-28 executives Number Of whom men Number Of whom men Number Of whom men Board of Directors 6 83% 5 80% 5 80% President and senior executives 10 90% 10 90% 16 94%

Remuneration and other benefits to 2014-03-01 2013-03-01 2012-03-01 Incentive program the Board during the year, SEK million –2015-02-28 –2014-02-28 –2013-02-28 The Board of Directors for Nobina AB, except for the Company’s CEO, Board Chairman have been offered a cash-based incentive program consisting of fixed Jan Sjöqvist 0.9 0.7 1.6 and variable remuneration. This was based on a decision take at an extraordinary general meeting on 26 November 2014. The Board also Board memebers decided to set up a similar incentive program for its Group management Graham Oldroyd 0.5 – – team, including the CEO, consisting of fixed and variable remuneration. John Allkins 0.5 – – The aim of both incentive programs is to help create a more diversified ownership in the Company before the end of 2017. The amount of both Birgitta Kantola 0.5 0.2 0.2 programs will be limited to a maximum amount of SEK 172 millions, Gunnar Reitan 0.5 0.2 0.3 including social security costs and taxes. No costs under the program Ragnar Norbäck – – – have been absorbed in the annual accounts for 2014/15. Both of the Rolf Lydahl – 0.1 0.4 incentive programs were implemented following proposals from certain Total 2.7 1.2 2.5 of Nobina’s larger shareholders. The allocation per participant is calcu- lated as multiples of the members’ annual salary. Certain Board mem- bers, senior executives and employees own shares in the Company. Remuneration to the Chairman of the Board and other Board members Remuneration to the Chairman and other members of the Board is paid according to the decision of the Annual General Meeting. No remunera- tion is paid to the Board beyond that approved by the Annual General Meeting. The President receives no Board fees. During the year, Nobina AB paid pension benefits to former Board members equal to SEK 0 (0.1 and 0.1) million. This is because the Board members are entitled to life- long remuneration from the company. Two previous members from Company management are entitled to lifelong remuneration from the company, which is secured through endowment insurance, SEK 12 (12 and 13) million.

2014-03-01–2015-02-28 Of which bonus payments Distribution of salaries and other remuneration by country and between Company’s senior and similar Other the Company’s senior executives and other employees executives remuneration employees Parent Company 13 6 11 Subsidiaries in Sweden 11 2 1,915 Total Sweden 24 8 1,926

Foreign subsidiaries Denmark 2 – 211 Norway 2 – 426 Finland 3 1 361 Total foreign subsidiaries 7 1 998

Total Company 31 9 2,924

F-16 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

NOTE 7 cont.

2013-03-01–2014-02-28 Of which bonus payments Distribution of salaries and other remuneration by country and between Company’s senior and similar Other the Company’s senior executives and other employees executives remuneration employees Parent Company 14 3 44 Subsidiaries in Sweden 6 1 1,710 Total Sweden 20 4 1,754

Foreign subsidiaries Denmark 2 – 181 Norway 2 – 445 Finland 3 1 376 Total foreign subsidiaries 7 1 1,002

Total Company 27 5 2,756

2012-03-01–2013-02-28 Of which bonus payments Distribution of salaries and other remuneration by country and between Company’s senior and similar Other the Company’s senior executives and other employees executives remuneration employees Parent Company 15 4 30 Subsidiaries in Sweden 10 2 1,679 Total Sweden 25 6 1,709

Foreign subsidiaries Denmark 2 – 180 Norway 3 – 429 Finland 2 1 375 Total foreign subsidiaries 7 1 984

Total Company 32 7 2,693

2014-03-01 2013-03-01 2012-03-01 Remuneration to the President and CEO of Nobina AB, SEK million –2015-02-28 –2014-02-28 –2013-02-28 Fixed fee 4.9 4.7 4.6 Variable remuneration *) 4.8 2.1 2.7 Pension expenses 1.3 1.3 1.3 Social security contributions and taxes 3.5 2.5 2.8 Total 14.5 10.6 11.4

*) In addition to the stated remuneration to the President, there is also an accrued share-based payment of SEK 4.5 (2.4) and (0.4) million, which has not yet been utilised.

SHARE HOLDINGS OF THE BOARD AND SENIOR EXECUTIVES

Number of shares 2015-02-28 2014-02-28 2013-02-28 Board Chairman Jan Sjöqvist 1,659,583 1,659,583 1,659,583 Board members Graham Oldroyd ––– Birgitta Kantola ––– Gunnar Reitan ––– John Allkins ––– Senior Executives Ragnar Norbäck 3,190,098 2,567,258 2,567,258 Per Skärgård 907,574 907,574 907,574 Jan Bosaeus 660,146 660,146 660,146 Joakim Palmqvist 211,602 211,602 211,602 Tom Ward 209,470 209,470 209,470 Philipp Engedal ––– Niels Peder Nielsen ––– Martin Pagrotsky 42,326 42,326 42,326 Annika Kolmert 1,667 1,667 1667 Peter Hagert ––– Other senior executives 618,387 618,387 1,058,042 Total number of shares 7,500,853 6,878,013 7,317,668

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-17 FINANCIAL STATEMENTS

NOTE 7 cont.

REMUNERATION TO THE PRESIDENT AND OTHER SENIOR EXECUTIVES Sick pay for the President Senior executives in Nobina include the President, CFO, presidents of The President is insured up to 90 percent of salary for a maximum subsidiaries and positions reporting directly to the President. The total of 365 days per calendar year, with no qualifying days. remuneration to the President and CEO and other senior executives includes fixed salaries, short and long-term variable remuneration, Other employment benefits of the President pensions and other benefits. In the event of termination of employment, In addition to the taxable benefits described above, benefits include senior executives in Nobina are entitled to not more than 12 months’ health insurance and holdings of shares in Nobina AB. compensation. As a basic principle, a six-month mutual termination period applies between the company and the executive. In addition, a Vacation for the President and other senior executives maximum of six months of remuneration is payable should employment The President and other senior executives are entitled to 30 vacation be terminated by the company. For the President and CEO and certain days per year. other senior executives employed in Sweden, a supplemental pension plan is applied corresponding to the ITP plan. PRESIDENT AND CEO, AND VICE PRESIDENTS Senior executives (Company management) in the Parent Company are Variable remuneration to the President the President who is also the CEO, the CFO who is also the Vice President In addition to fixed remuneration, the President is entitled to a special of the Company and the President of Nobina Sverige AB who is also the bonus. Variable remuneration shall be based on the individual’s perfor- Vice President of the Company. mance and the company’s performance in relation to predetermined and established goals. Evaluation of these goals will take place annu- Pension terms for other members of Company management ally. Variable remuneration shall consist of a cash bonus as determined Pension expenses comprise defined-contribution pensions, for which by the Board. During the year, prior equity-based remuneration to the the premium is equal to 30 percent of pensionable salary. Endowment CEO was cash settled. insurance has in some cases been used for senior executives when the level of the pension form the company has promised exceeds the Pension terms for the President permitted amounts of the Income Tax Act. The retirement age for the president is 62 years in the Parent Company. Pension expenses for the company amount to 90 percent of salary when retirement takes place at the age of 62–63, 80 percent of salary when retirement takes place at the age of 63–64 and 70 percent of sal- ary when retirement takes place at the age of 64–65. Nobina’s commit- ment to the President ends at retirement, at the age of 65. In addition, there are ongoing pension expenses comprising defined contribution pensions, for which the premium is equal to 30 percent of pensionable salary. For the President, the defined-contribution pension expense amount to SEK 1.3 (1.3 and 1.3) million. Pensionable salary comprises basic salary as long as the President remains in the company’s employ- ment. Termination salary is pensionable.

NOTE 8 Depreciation/amortisation and impairment of PPE and intangible assets

2014-03-01 2013-03-01 2012-03-01 SEK million –2015-02-28 –2014-02-28 –2013-02-28 Goodwill ––– Other intangible assets 8 7 7 Costs for improvements on third-party properties 5 5 4 Equipment, tools, fixtures and fittings 17 20 23 Vehicles 486 459 430 Total 516 491 464

Impairment losses for the year on available-for-sale buses belong to these segments: Nobina Sweden SEK 3 (5 and 3) million, Nobina Finland SEK 0 (2 and 2) million, Nobina Denmark SEK 0 (1 and 0) million and Nobina Norway SEK 2 (3 and 4) million.

NOTE 9 Interest income and similar profit/loss items

2014-03-01 2013-03-01 2012-03-01 SEK million –2015-02-28 –2014-02-28 –2013-02-28 Financial income 5 4 5 Interest income 3 5 4 Interest income from Nobina companies ––– Total 8 9 9

The Company earns interest on its bank deposits according to an interest rate based on the bank’s daily investment interest rates. Of the above interest income and similar profit/loss items, SEK 4 (4 and 5) million was received during the year.

F-18 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

NOTE 10 Interest expenses and similar profit/loss items

2014-03-01 2013-03-01 2012-03-01 SEK million –2015-02-28 –2014-02-28 –2013-02-28 Interest expense, finance leases –144 –155 –170 Amortisation of bond loan and other external loans –89 –69 –80 Other financial expenses –6 –16 –20 Interest expenses to Nobina companies ––– Realised and unrealised exchange gains/losses, net 1 –8 6 Total –238 –248 –264

Paid interest expenses amount to SEK –213 (–229 and –245) million. The interest expenses pertain to liabilities that have been recognised at amortised cost.

NOTE 11 Taxes

2014-03-01 2013-03-01 2012-03-01 SEK million –2015-02-28 –2014-02-28 –2013-02-28 Current tax on profit for the year – 0 0 Adjustments to previous years’ tax –1 0 –1 Total current tax –1 0 –1

Deferred tax Recognition of prior, unrecognised deferred taxes – 7 70 The periods change through profit or loss –46 –38 – Change in comprehensive income for the period 4 – – Total deferred tax –42 –31 70

Total income tax –43 –31 69

The corporate tax rate in Norway is 27 percent, in Denmark 25 percent, in Finland 20 percent and in Sweden 22 percent. The Company’s tax expense amounted to SEK 47 (31) million, which was 33.3 (35.6) percent of profit for the year. Current tax amounted to SEK 1 (0) and –1 million.

Tax assets and tax liabilities 2015-02-28 2014-02-28 2013-02-28 Deferred tax assets, gross Postponed depreciation/amortisation, impairment and adjustments to fair value, other PPE 8 1 1 Postponed expenses for provisions 2 7 6 Doubtful debts – 1 3 Other deferred tax assets attributable to pensions 5 2 – Tax loss carry forwards 447 476 464 Total 462 487 474

Deduction for tax loss carry forwards not recognised –374 –374 –350 Total deferred tax assets 88 113 124

Deferred tax assets, net Opening carrying amount 113 124 7 The period’s change through profit or loss of prior unrecognised deferred taxes – 7 117 The periods change through profit or loss –25 –20 – Reserved offset of tax liabilities/assets, other reclassification – 2 – Closing carrying amount, net 88 113 124

Deferred tax liabilities, gross Faster rate of depreciation/amortisation and adjustments to fair value, other PPE –82 –65 –47 Total deferred tax liabilities –82 –65 –47

Deferred tax liabilities, net Opening carrying amount –65 –47 – The periods change through profit or loss –17 –18 –47 Reserved offset of tax liabilities/assets, other reclassification ––– Closing carrying amount, net –82 –65 –47

Total net tax assets and tax liabilities 6 48 77

Net increase (+)/net decrease (–) of tax assets/liabilities –42 –31 70

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-19 FINANCIAL STATEMENTS

NOTE 11 cont.

Non-recognised, deferred tax assets, SEK million 2015-02-28 2014-02-28 2013-02-28 Opening non-recognised amount 374 350 533 Utilisation/addition of previously non-capitalised loss carryforwards –6 28 5 Company contributions ––– Non-taxable revenue and non-deductible expenses 1 – – Other temporary differences –6 – – Reclassifications from previous years 6 20 –18 Change in applicable tax rates – –5 –56 Change for the period, recognised through profit or loss – –7 –107 Exchange-rate differences 5 –12 –7 Total deferred non-recognised tax assets 374 374 350

Offset of deferred tax liabilities ––– Total deferred non-recognised tax assets 374 374 350

Expected maturity of both recognised and unrecognised tax loss carry forwards, SEK million 2015-02-28 2014-02-28 2013-02-28 2014/15 – 12 2015/16 7 18 2016/17 4 17 16 2017/18 18 17 16 2018/19 – 9 – 2019/20 9 10 – 2020/21 11 13 – 2021/22 14 – – Unlimited 1,975 1,995 1,993 Total 2,031 2,068 2,055

Deferred, net, tax loss carry forwards by country, SEK million 2015-02-28 2014-02-28 2013-02-28 Sweden 82 95 114 Denmark ––– Norway ––– Finland 6 7 – Total deferred tax loss carryforwards, recognised 88 102 114

The Company’s tax expense amounts to 22 percent of its profit before tax. The difference between the reported tax expense and expected tax expense is explained below.

2014-03-01 2013-03-01 2012-03-01 SEK million –2015-02-28 –2014-02-28 –2013-02-28 Profit/loss before tax 141 87 –9 Average income tax –31 –19 2

Tax effect of: Non-taxable revenue and non-deductible expenses 1 0 0 Other temporary differences 3 2 –3 Temporary differences in deferred tax assets 0 1 0 Utilisation loss carry forward, for which tax not previously reported 0 7 70 Unrecognised loss carryforwards –20 –22 – Total –47 –31 69

Percent 33,3% 35,6% 766,7%

F-20 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

NOTE 12 Intangible assets

Distribution of goodwill per segment, SEK million 2015-02-28 2014-02-28 2013-02-28 Nobina Sweden 383 383 383 Nobina Denmark ––– Nobina Norway * 131 128 134 Nobina Finland 29 29 29 Total Regional traffic 543 540 546 ƒ„ †‡ƒ Total Interregional traffic 45 45 45 Total Company goodwill 45 45 45 Summa Koncerngoodwill 588 585 591

*) The change in Nobina Norway’s goodwill was due to a change in exchange rates.

Company management has carried out the usual test of goodwill for the units’ existing and future market shares. The growth rate was impairment. In the assessment of cash-generating units’ recoverable calculated separately for each business area over a five-year period. amount (used for the assessment of any impairment requirement of Thereafter, the rate of growth was estimated at zero percent. The cash goodwill), several assumptions of future conditions and estimates of flow forecasts are calculated at present value with a yield requirement, variables were made in order to forecast future cash flows. Forecasts WACC, of 7.5 (7.5 and 9.8) percent before tax. There is an adequate for future cash flows are based on the best possible assessments of margin between the value-in-use and carrying amount. Management future income and operating expenses, which in turn are based on the assesses that the impact of potential changes in forecast profit mar- company’s business plans, historical trends, general market conditions gins, sales growth and discount rate, would not impact the recoverable and other available information. The discounted cash-flow value, given amount such that it is reduced to a value that is lower than the carrying an explicit five-year forecast period and the derived terminal value, are amount. based on each company’s income before amortisation, which affects

2015-02-28 Nobina Sweden Nobina Norway Nobina Finland Swebus Forecasted operational profit margin 5.8% 1.6% 5.4% 4.1% Sales growth over 5-year period 4.3% 4.6% 5.5% 4.4% Discount rate before tax for present value calculation of the estimated future cash flows 7.5% 7.5% 7.5% 7.5%

2014-02-28 Nobina Sweden Nobina Norway Nobina Finland Swebus Forecasted operational profit margin 5.0% 1.3% 5.0% 8.0% Sales growth over 5-year period 2.4% 2.7% 3.0% 4.3% Discount rate before tax for present value calculation of the estimated future cash flows 7.5% 7.5% 7.5% 7.5%

2013-02-28 Nobina Sweden Nobina Norway Nobina Finland Swebus Forecasted operational profit margin 5% 2% 5% 6% Sales growth over 5-year period 4% 6% 2% 8% Discount rate before tax for present value calculation of the estimated future cash flows 9.8% 9.8% 9.8% 9.8%

Other intangible assets (pertain primarily to internal software development), SEK million 2015-02-28 2014-02-28 2013-02-28 Cost Opening cost 54 49 35 Procurement 5 5 14 Sales/disposals –2 – – Reclassification ––– Closing cost 57 54 49

Accumulated amortisation Opening accumulated amortisation –35 –28 –21 Sales/disposals 2 – – Amortisation for the year –8 –7 –7 Reclassification ––– Closing accumulated amortisation –41 –35 28

Residual value according to plan 16 19 21

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-21 FINANCIAL STATEMENTS

NOTE 13 Property, plant and equipment

Cost for improvements on third-party properties, SEK million 2015-02-28 2014-02-28 2013-02-28 Cost Opening cost 37 36 22 Procurement 9 1 17 Sales/disposals –6 – –2 Translation difference – – –1 Closing cost 40 37 36

Accumulated amortisation Opening accumulated amortisation –20 –15 –13 Amortisation for the year –5 –5 –4 Sales/disposals 6 – 2 Reclassification ––– Closing accumulated amortisation –19 –20 –15

Residual value according to plan 21 17 21

Equipment, tools, fixtures and fittings, SEK million 2015-02-28 2014-02-28 2013-02-28 Cost Opening cost 160 183 188 Procurement 46 11 19 Sales/disposals –40 –13 –23 Reclassification – –21 – Translation difference 1 – –1 Closing cost 167 160 183

Accumulated amortisation Opening accumulated amortisation –128 –127 –124 Sales/disposals 40 13 19 Amortisation for the year –17 –20 –23 Reclassification – 6 – Translation difference –1 – 1 Closing accumulated amortisation –106 –128 –127

Residual value according to plan 61 32 56

Vehicles, SEK million 2015-02-28 2014-02-28 2013-02-28 Cost Opening cost 5,918 5,791 4,926 Procurement 980 274 1,206 Sales/disposals –405 –149 –265 Reclassification – 15 – Translation difference 65 –13 –76 Closing cost 6,558 5,918 5,791

Accumulated amortisation Opening accumulated amortisation –1,949 –1,609 –1,403 Sales/disposals 254 107 199 Amortisation for the year –481 –448 –422 Translation difference –18 1 17 Closing accumulated amortisation –2,194 –1,949 –1,609

Accumulated impairment Opening accumulated impairment –19 –14 –17 Sales/disposals 14 6 11 Impairment for the year –5 –11 –8 Closing accumulated impairment –10 –19 –14

Residual value according to plan 4,354 3,950 4,168

Financial leasing is included in the aforementioned amounts, see Note 6, and impairment of available-for-sale buses, see Note 8. Impairment pertains to buses where the net realisable value is less than the carrying amount, see Note 1, Excess vehicles (buses).

F-22 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

NOTE 14 Participations in Nobina companies

Corporate Profit/ Value of registration Number loss for ownership Share Book value SEK million number Business Equity of shares the year share (%) capital 28 Feb 2015 Subsidiaries of Nobina Fleet AB: Nobina Fleet AB (Stockholm) 556031-1812 Holding of buses 9 70,000 –4 100 7 37 Saltsjöbuss AB (Stockholm) 556210-1500 Dormant companies 0 2,500 0 100 0 0

Subsidiaries of Saltsjöbuss AB: Karlstadsbuss AB (Stockholm) 556051-2039 Dormant companies 3 3,000 0 100 3 Nobina Busco AB (Stockholm 556583-0527 Holding of buses –2 1,000 –4 100 0

Subsidiaries of Nobina AB: Nobina Europe AB (Stockholm) 556031-8569 Service company 210 160,000 –81 100 16 3,658

Subsidiaries of Nobina Europe AB:

Swedish commercial companies Swebus Express AB (Stockholm) 556358-3276 Interregional traffic 10 5,000 0 100 5 Nobina Sverige AB (Stockholm) 556057-0128 Regional traffic 621 3,000 51 100 0

Subsidiaries of Nobina Sverige AB: Nobina Spår AB (Stockholm) 556416-2419 Dormant companies 1 1,000 0 100 0 Nobina Europe Holding AB (Stockholm) 556028-1122 Dormant companies 110 300 –218 100 0

Foreign commercial subsidiaries Nobina Finland Oy Ab (Helsinki) 0505988-8 Regional traffic 117 2,000 23 100 32

Subsidiaries of Nobina Finland Oy Ab: Nobina Finland West Oy Ab (Helsinki) 2175179-4 Regional traffic 4 2,600 0 100 0 Nobina Finland South Oy Ab (Helsinki) 2175178-6 Regional traffic 4 2,600 0 100 0 Nobina Finland East Oy Ab (Helsinki) 2175186-6 Regional traffic 1 2,600 0 100 0

Nobina Norge AS (Oslo) 915768237 Regional traffic 37 4,268 –50 100 47

Subsidiaries of Nobina Norge AS: Nobina (Norge) AS (Oslo) 992097353 Dormant companies 7 100 2 100 0

Nobina Danmark Holding ApS(Glostrup) 36078480 Regional traffic 9 100 0 100 0 Subsidiaries of Nobina Danmark Holding ApS: Nobina Danmark A/S (Glostrup) 29513376 Regional traffic 12 10,001 –15 100 1

Nobina Fleet Danmark ApS (Glostrup) 31586429 Holding of buses 1 1,250 1 100 0

Subsidiaries of Nobina Fleet Danmark ApS: Nobina Fleet Danmark No 1 ApS (Glostrup) 36077719 Holding of buses 0 100 0 100 0 Nobina Fleet Danmark No 2 ApS (Glostrup) 36089482 Holding of buses 0 100 0 100 0 Nobina Fleet Danmark No 3 ApS (Glostrup) 36089490 Holding of buses 0 100 0 100 0 Total 3,695

NOTE 15 Inventories

SEK million 2015-02-28 2014-02-28 2013-02-28 Spare parts 29 28 23 Fuel 20 25 21 Total 49 53 44

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-23 FINANCIAL STATEMENTS

NOTE 16 Accounts receivable

SEK million 2015-02-28 2014-02-28 2013-02-28 Trade receivables 523 384 381 Provision for doubtful debts –4 –9 –12 Total 519 375 369

Fall due Accounts Fall due within Fall due within Fall due within Fall due within more than Accounts receivable aging receivable Not due during <30 days after 31–60 days after 61–90 days after 91–120 days after 120 days after analysis, SEK million 2015-02-28 reporting period the due date the due date the due date the due date the due date Trade receivables 523 489 23 2 1 0 8

Fall due Accounts Fall due within Fall due within Fall due within Fall due within more than Förfalloperiod för utestående receivable Not due during <30 days after 31–60 days after 61–90 days after 91–120 days after 120 days after kundfordringar, MSEK 2014-02-28 reporting period the due date the due date the due date the due date the due date Trade receivables 384 343 27 2 5 0 7

Fall due Accounts Fall due within Fall due within Fall due within Fall due within more than Förfalloperiod för utestående receivable Not due during <30 days after 31–60 days after 61–90 days after 91–120 days after 120 days after kundfordringar, MSEK 2013-02-28 reporting period the due date the due date the due date the due date the due date Trade receivables 381 266 84 3 11 3 14

Provision for doubtful debts, SEK million 2015-02-28 2014-02-28 2013-02-28 Opening balance –9 –12 –6 Reversals for the year 4 8 –1 Loan losses 1 0 1 Provisions for the year – –5 –6 Total closing balance –4 –9 –12

NOTE 17 Prepaid expenses and accrued income

SEK million 2015-02-28 2014-02-28 2013-02-28 Accrued transport income 115 114 147 Other prepaid expenses 121 121 93 Total 236 235 240

NOTE 18 Cash and cash equivalents and restricted bank accounts

SEK million 2015-02-28 2014-02-28 2013-02-28 Cash and cash equivalents 453 309 137 Restricted bank accounts 115 156 175

The item cash and cash equivalents recognises holdings in the compa- in Norway and Denmark respectively, Nobina Sverige AB’s and Swebus ny’s checking accounts tied to the Company account, in which Nobina Express’ commitments under the Swedish Transport Guarantee Act and Europe AB is the account principal. Restricted bank accounts comprise Nobina Sverige AB’s undertakings concerning electricity procurement. deposits for bank guarantees and leasing contracts. Bank guarantees Nobina Norway also has restricted bank accounts for tax payments. have been issued for such purposes as guarantees for Nobina Norge AS Nobina AB’s restricted bank accounts are deposits for leases. and Nobina Danmark A/S’s commitments pertaining to traffic contracts

F-24 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

NOTE 19 Equity

Share capital Translation differences According to the Articles of Association for Nobina AB, share capital The translation reserve includes all foreign exchange differences that must be at least SEK 100,000,000 and at most SEK 400,000,000. arise in the translation of financial statements from foreign operations According to the Articles of Association, the number of shares in the including changes regarding the translation of goodwill in local cur- company must be at least 250,000,000 and at most 1,000,000,000. rency. The company’s shares consists of ordinary shares, which entitle the holder to one vote per share. Dividend Dividends are proposed by the Board in accordance with the stipula- Reconciliation of number of shares 2015-02-28 Ordinary shares tions of the Swedish Companies Act and adopted by the Annual General Opening balance 632,611,285 Meeting. Dividends are recognised in the Parent Company as a reduc- New issue of shares to senior executives 622,840 tion of non-restricted shareholders’ equity until the date on which a payment is made to shareholders. Closing balance 633,234,125 CAPITAL MANAGEMENT The aim of the Company’s capital management is to secure Nobina’s Reconciliation of number of shares 2014-02-28 Ordinary shares financial stability, manage financial risks and ensure the Company’s Opening balance 632,611,285 short and long-term capital requirements. Nobina defines capital as Closing balance 632,611,285 shareholders’ equity in the same way that it is recognised in the bal- ance sheet. The company’s aim is to create a gain for shareholders by increasing the value of assets under management. There are no exter- Reconciliation of number of shares 2013-02-28 Ordinary shares nal capital requirements besides those stipulated by the Swedish Opening balance 24,928,139 Companies Act. Subscription for new shares via a non-cash issue 600,678,048 Subscription for new shares to senior executives 7,005,098 Redemption of shares – Closing balance 632,611,285

NOTE 20 Earnings per share

2014-03-01 2013-03-01 2012-03-01 –2015-02-28 –2014-02-28 –2013-02-28 Average number of ordinary shares during the period (000s) 633,014 632,611 238,033 Recognised profit/loss (SEK million) 94 56 60 Earnings (SEK million) 94 56 60 Earnings per share (SEK) before and after dilution 0.15 0.09 0.25

Earnings per share are calculated by dividing profit for the year by the average number of ordinary shares.

NOTE 21 Provisions for pensions and similar commitments

Commitments and pension expenses 2015-02-28 2014-02-28 2013-02-28 Present value of pension commitments 154 147 157 Fair value of plan assets –118 –124 –138 Net provisions (+)/assets (–) for pension commitments – – 19 Commitments and pension expenses – – –1 Present value of pension commitments 36 23 18

Of which recognised as provisions 36 28 30 Of which recognised as assets – 5 12

Pension expenses are included in personnel costs and comprise the following: SEK million 2015-02-28 2014-02-28 2013-02-28 Cost pertaining to services rendered during the current period 1 1 1 Interest expense 5 5 4 Expected return on plan assets –5 –6 –5

Actuarial losses (gains), net 18 11 –6 Social security contributions 3 – 2 Pension expenses, net 18 11 –4

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-25 FINANCIAL STATEMENTS

NOTE 21 cont.

Significant acturial assumptions The expected average remaining term of service is estimated based The actuarial calculation of pension commitments and pension on the employees’ current age distribution and the expected employee expenses is based on the following significant assumptions, stated as turnover rate. Change in the average commitment of service by 1 year the weighted mean values for the various pension plans. affects the pension obligation by SEK 3 (2 and 2) million and for a change For each country, the discount rate is based on the estimated of –1 year, the corresponding amount is SEK –3 (–2 and -2) million. discount rate on the yield of mortgage bonds. With a change in the Indexation of pension benefits reflects the inflationary rate in each discount rate of + 1 percent, the impact on pension obligati on is SEK –12 country, Norway and Sweden. (–11) million; with a change in the discount rate of –1 percent, the impact Nobina’s pension expense, not including actuarial gains (losses), on pension obligation SEK 14 (13) million. The annual rate of salary which is reported in the statement of consolidated comprehensive increases reflects expected future salary increases as a combined income, amounts to SEK 187 (210 and 215) million, of which SEK 0 (1 and effect of inflation and seniority. The future rate of pension increases 3) million reflects the expected percentage of employees, is defined benefit plans. The Company’s pension plans are described by age group, who will leave the company through natural attrition. in more detail in Note 1, Company information and accounting policies. Change in the rate of salary increases when calculating pension obliga- tions does not have a significant impact on Nobina’s information.

2015-02-28 2014-02-28 2013-02-28 The key actuarial assumptions used in calculation of the pension liability were as follows: Sweden Norway Sweden Norway Sweden Norway Discount rate 2.8% 4.0% 2.8% 3.9% 2.8% 3.9% Expected rate of salary increases 1.5% 3.8% 3.0% 3.5% 1.5% 3.5%

Future rate of pension increases 1.5% 3.5% 1.5% 3.3% 1.2% 3.2%

Present value of pension commitments: SEK million 2015-02-28 2014-02-28 2013-02-28 Opening balance 147 157 187 Benefits earned during the year 1 1 2 Deductions from pension obligations due to changes in pension terms –4 – – Interest expenses 5 5 4 Benefits paid –14 –18 –20 Actuarial gains (–)/losses(+) 14 9 –11 Social security contributions 3 – – Exchange-rate differences 2 –7 –5 Total at year-end 154 147 157

Fair value of plan assets: SEK million 2015-02-28 2014-02-28 2013-02-28 Opening balance 124 138 157 Expected return on plan assets 5 6 6 Funds contributed by employer 2 3 1 Funds paid –11 –14 –16 Actuarial gains (+)/losses (–) –4 –2 –5 Exchange-rate differences 2 –7 –5 Total at year-end 118 124 138

Net assets/provisions for pension commitments SEK million 2015-02-28 2014-02-28 2013-02-28 Opening balance 23 19 30 Benefits paid –14 –18 –20 Deductions from pension obligations due to changes in pension terms –4 – – Funds contributed by employer –1 –4 – Funds paid 11 14 16 Actuarial losses/gains (net) 18 12 –7 Social security contributions 3 – – Exchange-rate differences ––– Closing balance, net assets (–)/provisions (+) for pension commitments 36 23 19

F-26 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

NOTE 21 cont.

ALLOCATION OF PLAN ASSETS

Actual market value of plan assets on the balance-sheet date: SEK million 2015-02-28 % 2014-02-28 % 2013-02-28 % Interest-bearing securities, cash and cash equivalents 106 89 111 89 75 54 Shares and other investments 12 11 13 11 63 46 Total 118 100 124 100 138 100

Allocation of plan assets per segment, SEK million 2015-02-28 2014-02-28 2013-02-28 Nobina Sweden 11 13 18 Nobina Denmark ––– Nobina Norway 107 111 120 Nobina Finland ––– Total plan assets 118 124 138

Allocation of pension obligations per segment, SEK million 2015-02-28 2014-02-28 2013-02-28 Nobina Sweden 39 39 45 Nobina Denmark ––– Nobina Norway 115 108 112 Nobina Finland ––– Total plan assets 154 147 157

The pension liabilities are secured through credit insurance. Given the applied actuarial assumptions, Nobina expects the following paid benefits over the next five-year period.

Future payments, SEK million 2015/16 2016/17 2017/18 2018/19 2019/20 Later Expected net paid benefits 6 5 6 8 7 28

NOTE 22 Other provisions

Other provisions, SEK million *) 2015-02-28 2014-02-28 2013-02-28 Provision for onerous contracts – 1 8 Provision for damage to vehicles and third-parties 29 27 27 Provision for environmental commitments 10 10 10 Total 39 38 45

*) It is therefore not possible to provide detailed information on the timing of outflows from provisions.

Provision for onerous contracts, SEK million 2015-02-28 2014-02-28 2013-02-28 Opening balance 1 8 29 Reversals for the year –1 –7 –21 Provisions for the year ––– Closing balance – 1 8

Provision for damage to vehicles and third parties, SEK million 2015-02-28 2014-02-28 2013-02-28 Opening balance 27 27 22 Reversals for the year ––– Provisions for the year 2 – 5 Exchange difference ––– Closing balance 29 27 27

Provision for environmental commitments for leased land and facilities, SEK million 2015-02-28 2014-02-28 2013-02-28 Opening balance 10 10 10 Reversals for the year ––– Provisions for the year ––– Closing balance 10 10 10

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-27 FINANCIAL STATEMENTS

NOTE 23 Borrowing – bond loan and other liabilities

2015-02-28 2014-02-28 2013-02-28 Bond loan Bond loan Bond loan and other Finance and other Finance and other Finance Maturity external loans lease liability external loans lease liability external loans lease liability 2013/14 – – – – – 727 2014/15 – – – 696 – 620 2015/16 24 808 721 – 643 2016/17 24 812 698 – 626 2017/18 23 480 552 378 551 – 2018/19 23 476 – – – – 2019/20 569 – –– Later 53 1,123 – 1,030 – 1,162 716 3,699 552 3,523 551 3,778

Accrual of financial expenses –16 – –27 – –33 – Total liability 700 3,699 525 3,523 518 3,778

Of which short-term repayment by installment of portion of the Company’s borrowings 24 610 – 565 – 496 Of which long-term portion 676 3,089 525 2,958 518 3,282 Total liability 700 3,699 525 3,523 518 3,778

Nominal Amount Interest, Loan currency 2014-03-01–2015-02-28 amount SEK million weighted average Corporate bonds and other external loans in SEK 560 8.7 Other external loans in DKK 124 156 4.3 Financial lease liabilities in SEK – 2,635 3.8 Finance lease liability in EUR 45 421 3.4 Finance lease liability in NOK 503 551 5.0 Finance lease liability in DKK 73 92 3.8 Total loan liability 4,415

Nominal Amount Interest, Loan currency 2013-03-01–2014-02-28 amount SEK million weighted average Corporate bonds and other external loans in SEK 552 12.6 Other external loans in DKK ––– Financial lease liabilities in SEK – 2,388 4.2 Finance lease liability in EUR 44 395 3.2 Finance lease liability in NOK 595 640 5.1 Finance lease liability in DKK 83 100 3.7 Total loan liability 4,075 5.3

Nominal Amount Interest, Loan currency 2012-03-01–2013-02-28 amount SEK million weighted average Corporate bonds and other external loans in SEK 551 551 12.72 Other external loans in DKK ––– Financial lease liabilities in SEK 2,529 2,529 5.02 Finance lease liability in EUR 47 394 3.14 Finance lease liability in NOK 670 756 5.44 Finance lease liability in DKK 88 99 3.88 Total loan liability 4,329 6.08

Non-current liabilities consist of corporate bonds in Nobina Europe AB nants. For example, because of these covenants, Nobina Europe AB and for a nominal amount of SEK 550 million, issued on 13 May 2014 in con- its subsidiaries have restrictions on their options to raise additional junction with refinancing a prior bond. The corporate bonds have a fixed loans, enter into finance lease agreements or sale-and-leaseback interest rate of 8 percent, paid semi-annually (13 May and 13 November) agreements, make certain types of investments and divest assets. and full payment of the liability is due on 13 May 2019. Nobina Europe In addition, Nobina Europe AB and its subsidiaries have certain restric- may repay the bond in advance, under certain circumstances. As of 28 tions on issuing dividends. All of these covenants were fulfilled as of 28 February 2015, the total amount of outstanding corporate bonds in SEK February 2015 and during the fiscal year. Borrowing costs are expensed was 550 million. Having issued these corporate bonds, Nobina Europe over the term of a loan, unless the loan is redeemed prematurely, in AB and its subsidiaries are obligated to fulfill a number of financial cove- which case the capitalised cost is expensed in its entirety.

F-28 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

NOTE 24 Other non-current liabilities

SEK million 2015-02-28 2014-02-28 2013-02-28 Employee withholding taxes 102 88 66 Other current liabilities 72 67 87 Total 174 155 153

NOTE 25 Accrued expenses and deferred income

SEK million 2015-02-28 2014-02-28 2013-02-28 Deferred income 295 218 168 Accrued salaries 366 326 302 Other accrued personnel costs 166 146 163 Accrued interest expense 13 20 20 Other accrued expenses 220 185 166 Total 1,060 895 819

NOTE 26 Pledged assets and contingent liabilities

SEK million 2015-02-28 2014-02-28 2013-02-28 Pledged assets for bond loans Pledged assets pertaining to shares/net assets in subsidiaries 899 1,078 784 Other pledged assets – 378 518 Chattel mortgage – 357 358 Other pledged assets Other pledged assets 265 – – Contingent liabilities Guarantee of lease obligations and other obligations – – 35 Total 1,164 1,813 1,695

In addition to pledged leasing guarantees, Nobina AB has also pledged a As security for Nobina Europe AB’s issued bonds, all shares in Nobina Parent Company guarantee for the purchase of diesel for Nobina Norge Sverige AB, Nobina Finland Oy, Nobina Norge AS, Swebus Express AB AS through UnoX, NOK 35 million, and for the fulfillment guarantees of and Nobina Danmark A/S have been pledged as security for the bonds. NOK 45 million issued by Atradius for Norwegian and Danish public transport authorities. Nobina Sverige AB has issued a floating charge of SEK 150 million as security for credit in the same amount at Danske Bank.

In conjunction with issuing the corporate bond the following shares in subsidiaries have been pledged: 2015-02-28 2014-02-28 2013-02-28 Shares in Nobina Sverige AB 621 570 528 Shares in Swebus Express AB 10 9 9 Shares in Nobina Finland Oy Ab 87 65 37 Shares in Nobina Busco AB – 5 1 Shares in Nobina Norge AS 169 141 40 Shares in Nobina Danmark A/S 12 11 9 Shares in Nobina Spår AB – 1 1 Shares in Nobina Europe AB – 276 159 Total 899 1,078 784

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-29 FINANCIAL STATEMENTS

NOTE 27 Financial risks and risk management

All risk management is handled centrally in accordance with a finance Credit and counterparty risk policy established by the Board of Directors. Nobina uses derivative The Company’s financial transactions give rise to credit risks in relation instruments when needed, as part of its financial risk management to to financial counterparties. Nobina’s finance policy states that credit limit currency, interest rate and diesel price exposure. At 28 February risk shall be limited by only accepting counterparties with high credit 2015, the company had outstanding derivative instruments through ratings and through established limits. Commercial credit risks are Nordpool. During the year, the company had outstanding electricity limited in that the Company has a diversified customer base with high derivatives, but no diesel, interest rate or currency derivatives. credit ratings, primarily comprising municipal and county council- Nobina is mainly exposed to the following financial risks: owned public transport authorities. Provisions have been made for accounts receivable deemed to be doubtful and this has had an impact NJ Liquidity risk of SEK –4 (–9) million on operating profit/loss. NJ Interest rate risk CURRENCY RISK NJ Refinancing risk Currency exposure arises in connection with payment flows in foreign NJ Credit and counterparty risk currency (transaction exposure) and with the translation of foreign subsidiaries’ income statements and balance sheets to SEK (translation NJ Currency risk exposure). The Group’s finance policy states that currency exposure NJ Raw material risk may be hedged. The subsidaries receive all revenues and pay all major expenses in local currency, including payments under lease agree- NJ Indexation ments, which are entered centrally, on behalf of the subsidaries, but in local currency. LIQUIDITY RISK Transaction exposure – Subsequent to the bond refinancing in 2014, Liquidity risk is defined as the risk that cash and cash equivalents are the entire bond loan is financed is SEK. According, the prior currency not available or that financing cannot be obtained when required. risk has been eliminated. The Group is also exposed to exchange rate Nobina has a working capital facility expiring on 31 December 2015. The fluctuations through its purchases of diesel, which is traded in the credit facility is of a 364 days nature, when it may be extended by the international commodities markets in USD. This currency risk can be bank after credit approval. Available credit facility was SEK 132 million hedged by entering into diesel derivatives in local currency. See also as of 28 February, 2015. the section, Raw materials risk. Translation exposure – Nobina AB’s and Nobina Europe AB’s currency HEDGING POLICY exposure on translation of foreign subsidiaries is normally not hedged. The company’s hedging policy is designed to ensure predictability and The exchange rate difference in foreign subsidaries in the comprehen- reduce volatility in liquidity and operating expenses in a cost-efficient sive income amounted to SEK 6 (–8) million for fiscal year. A weakening/ manner. The hedging policy states that the company may enter into strengthening of the SEK by 10 percent when translating the income hedge contracts for fuel, currency and interest rate exposure. statements of foreign subsidiaries would affect the Group’s profit after financial items by approximately SEK 5 million. INTEREST RATE RISK Interest rate risk refers to the risk that fluctuations in market interest RAW MATERIALS RISK rates will negatively affect the Company’s net interest income. The rate The Group is exposed to fluctuations in the prices of raw materials at which interest rate fluctuations affect net interest income depends through its purchases of diesel. The raw material price accounts for less on the fixed interest period of the loans. The Company is primarily than half of the total diesel price and the remainder pertains to taxes, exposed to interest rate risk through the company’s finance and operat- transports and refinement. For regional traffic, the Group is compen- ing leases since the leasing fees are based on a variable market rate of sated for changes in the price of diesel fuel via a revenue index in its interest. traffic agreements. The index baskets are relatively well matched with An increase in the variable interest rate by 1 percentage point would the Group’s costs. But, due to the delay in index regulation, there is a increase the Company’s interest expense by approximately SEK 41 mil- certain negative impact on earnings when costs increase. The com- lion before the effect of index compensation. Interest rate risk is partially pany had no outstanding diesel derivatives as of 28 February 2015. compensated by the inflation component of revenue indexation in the traffic contracts, and there is also an interest component in the index INDEXATION RISK basket of some traffic contracts. The Company’s bond loan runs with The contractual agreements include cost compensation in accordance fixed coupon interest and thereby entails no interest rate risk. with agreed indices (which normally include inflation, salary and fuel, as well as occasionally additional components such as interest). Refinancing risk Because these indices do not follow cost trends in the industry to 100 The Group is exposed to refinancing risk, since Nobina Europe’s existing percent, there is a risk that full compensation for cost increases is not bond loan of SEK 550 million falls due on 13 May 2019. For lease financing received, since the industry’s costs can rise faster than the index com- there’s no particular refinancing risk since the lease contracts are ten pensation received from clients. Additionally, there is a certain delay in years and Nobina intends to purchase the buses when the lease con- revenue compensation, which leads to a negative result effect when tracts expire. In addition, there’s always a commited bus financing costs increase. The opposite is valid for decreasing costs. available when a new tender is submitted.

F-30 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

NOTE 28 Financial instruments

Fair value Financial assets, Fair value, SEK million hierarchy 2015-02-28 2014-02-28 2013-02-28 Loan and accounts receivable Non-current receivables – – 1 Trade receivables 519 375 369 Other receivables 76 74 81 Restricted cash and cash equivalents 115 156 175 Cash and cash equivalents 453 309 137 Financial assets measured at fair value through profit and loss 2 – – –

Electricity derivaties. Fair value is determined in accordance with prices listed on an active market, which corresponds to Level 1 in IFRS 7. 1 – 1 – Total Company 1,163 915 763

Financial liabilities, Fair value, SEK million 2015-02-28 2014-02-28 2013-02-28 Other financial liabilities Interest-bearing liabilities, loans 4,416 4,074 4,329 Accounts payable 476 470 465 Other liabilities 174 155 153 Financial liabilities measured at fair value through profit and loss 2 – – – Total Company 5,066 4,699 4,947

FAIR VALUE Nobina Europe AB has a bond loans for a nominal amount of SEK 550 The carrying amounts of financial assets and liabilities essentially million, which is listed on NASDAQ Stockholm. The fair value is esti- correspond to their fair values. For the bond loan more information is mated to be the same as the nominal value of the bonds. There was provided below. some trading on the bond during the year and the price has been steady Fair value is determined on the basis of official market quotes on the at around 101 percent of the nominal amount. Premium refers to inves- reporting date. If no such information exists, fair value is determined tors’ valuation of the bond given an interest coupon of 8 percent. How- through discounting of future cash flow to the listed market interest ever, it does not affect Nobina Europe’s obligations to repay the nominal rate for the respective maturities or through some other method amount. deemed to provide the best estimation of fair value in each individual Fair value on the finance lease liability is calculated on variable inter- case. Translation to SEK occurs at the exchange rate prevailing on the est rates with an unchanged credit margin, which means that the reporting date. carrying amount of the liability corresponds to the fair value.

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-31 FINANCIAL STATEMENTS

NOTE 29 Related party transactions

Funds managed by Sothic Capital, Invesco, and Avenue Capital, partici- A member of Nobina AB’s Board has been nominated by Sothic pated along with other investors in the refinancing of Nobina Europe’s Capital. A member nominated by Anchorage Capital was elected to the bond loan during the 2014 financial year, which resulted in new bonds Board at an extraordinary general meeting on 4 March 2014. in Nobina Europe AB for a nominal amount of SEK 550 million. Internal services in Nobina are sold and purchased on the basis of The largest shareholders in Nobina AB are Sothic Capital, Invesco, current price lists and terms for non-related parties. Agreements for Anchorage Capital, Avenue Capital and Blue Mountain Capital. There services with Nobina companies are met on a cost-plus basis, plus a has been a high level of trading for both shares and bonds. Conse- 3–5 percent profit margin. quently, it is estimated that joint ownership between bonds and shares has fallen to under 20 percent.

2014-03-01 2013-03-01 2012-03-01 Related party transactions –2015-02-28 –2014-02-28 –2013-02-28 Sales of services to Nobina companies ––– Purchase of services from Nobina companies ––– Personnel costs Board of Directors –3 –1 –3 Senior executives –31 –27 –32 Pension expenses –6 –6 –8 Social security contributions –9 –10 –11 Total related party transactions –49 –44 –54

Profit from participations in Nobina companies ––– Interest income from Nobina companies ––– Interest expenses to Nobina companies ––– Interest expenses to bond-holders –52 –69 –80

Related party transactions 2015-02-28 2014-02-28 2013-02-28 Receivables from Nobina companies ––– Liabilities to Nobina companies ––– Pension provision CEO –7 –5 –4 Bond loans –550 –552 –551

NOTE 30 Exchange rates

Average Closing day 2014-03-01 2013-03-01 2012-02-29 Exchange rates –2015-02-28 –2014-02-28 –2013-02-28 2015-02-28 2014-02-28 2013-02-28 EUR 9.197 8.698 8.666 9.383 8.901 8.455 NOK 1.092 1.093 1.164 1.097 1.076 1.129 DKK 1.234 1.166 1.164 1.257 1.193 1.135

NOTE 31 Developments after the accounts date

On 1 April, the company announced that Nobina’s Board had appointed decision has also been taken regarding the terms and conditions relat- advisors, who would assist with the evaluation of strategic and capital ing to the management incentive programme for members of the Board structure alternatives. of Directors (excluding the Chief Executive Officer). The Company’s Nobina AB’s Board (excluding the President), at a Board meeting on aggregate cost for these two programmes amount to SEK 172 million 24 May 2015, in view of the Company’s initial public offering, resolved to (including social security contribution and taxes), of which the Group replace the current terms and conditions of the incentive program Management will be entitled to an aggregate amount of approximately described in note 7, as a result of which the participants in the program SEK 122 million (excluding social security contributions and taxes) and will receive full payment in connection with the closing of the Offering the Board of Directors will be entitled to an aggregate amount of approx- and reinvest an amount equivalent to 75% of the amount paid (net of tax) imately SEK 11.3 million (excluding social security contributions and into Shares by way of purchasing Shares in the offering. Equivalent taxes).

F-32 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) FINANCIAL STATEMENTS

AUDIT REPORT FOR FY14/15

To the Board of Directors of Nobina AB (publ), Corporate Id No $$($-(-&$('

Independent Auditors’ Report on Historical Financial Information We have audited the 1nancial statements for Nobina AB (publ) and its subsidiaries (the “Group”) on pages F-%–F-0+, comprised of the consolidated balance sheet as of February +*, +)%$ and the income statement, statement of total comprehensive income, cash 7ow statement and statement of changes in equity for the year then ended, and a summary of signi1cant accounting policies and other explanatory notes.

The Board of Directors’ and the Chief Executive Officer’s responsibility for the financial statements e Board of Directors and the Chief Executive O8cer are responsible for the preparation and the fair presentation of the 1nancial statements in accordance with International Financial Reporting Standards as adopted by the EU and the Annual Accounts Act and additional applicable framework. is responsi- bility includes designing, implementing and maintaining internal control relevant to preparing and appropriately presenting 1nancial statements that are free from material misstatement, whether due to fraud or error. e Board is also responsible for the preparation and fair presentation in accordance with the requirements in the Commission Regulation (EC) No *)'/+))&.

The auditor’s responsibility Our responsibility is to express an opinion on these consolidated 1nancial statements based on our audit. We conducted our audit in accordance with FAR’s Recommendation RevR $ Examination of Prospectuses . is recommendation requires that we comply with ethical requirements and have planned and per- formed the audit to obtain reasonable assurance that the consolidated 1nancial statements are free from material misstatements. An audit in accordance with FAR’s Recommendation RevR $ Examination of Prospectuses involves performing procedures to obtain audit evidence corroborating the amounts and disclosures in the consoli- dated 1nancial statements. e audit procedures selected depend on our assessment of the risks of material misstatements in the 1nancial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the company’s preparation and fair presentation of the 1nancial statements as a basis for designing audit procedures that are applicable under those circumstances but not for the purpose of expressing an opinion on the e#ectiveness of the company’s internal control. An audit also involves evaluating the accounting policies applied and the reasonableness of the signi1cant account- ing estimates made by the Board of Directors and the Chief Executive O8cer and evaluating the overall presentation of the consolidated 1nancial statements. We believe that the audit evidence we have obtained is su8cient and appropriate to provide a basis for our opinion.

Opinion In our opinion, the consolidated 1nancial statements give a true and fair view of the consolidated 1nancial position of Nobina AB (publ) as of February +*, +)%$ and its 1nancial performance, statements of changes in equity and consolidated cash 7ows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union, and the Annual Accounts Act and additional applicable framework.

Stockholm, 0 June +)%$

Pricewaterhouse Coopers AB

Michael Bengtsson Authorized Public Accountant

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) F-33 FINANCIAL STATEMENTS

AUDIT REPORT FOR FY 13/14 AND FOR FY12/13

To the Board of Directors of Nobina AB (publ), reg. no $$($-(-&$('

The Auditor’s Report on historical financial statements We have audited the 1nancial statements for Nobina AB (publ) on pages F-%–F-0+, which comprise the consolidated statements of 1nancial position as of February +*, +)%& and +)%0 and the consolidated state- ments of income, comprehensive income, cash 7ows and changes in equity for the years then ended, and notes to the audited 1nancial statements, comprising a summary of signi1cant accounting policies and other explanatory notes.

The Board of Directors’ and the Chief Executive Officer’s responsibility for the financial statements e Board of Directors and the Chief Executive O8cer are responsible for the preparation and the fair presentation of these 1nancial statements in accordance with International Financial Reporting Standards as adopted by the European Union and any additional applicable framework. is responsibility includes designing, implementing and maintaining internal control relevant to preparing and appropriately pre- senting 1nancial statements that are free from material misstatement, whether due to fraud or error. e Board is also responsible for the preparation and fair presentation of the 1nancial statements in accordance with the requirements in the Commission Regulation (EC) No *)'/+))&.

The auditor’s responsibility Our responsibility is to express an opinion on these 1nancial statements based on our audit. We conducted our audit in accordance with FAR’s, the professional institute for authorized public accountants, approved public accountants, and other highly quali1ed professionals in the accountancy sector in Sweden, Recom- mendation RevR $ Examination of Financial Information in Prospectuses . is recommendation requires that we comply with ethical requirements and have planned and performed the audit to obtain reasonable assurance that the 1nancial statements are free from material misstatements. An audit in accordance with FAR’s Recommendation RevR $ Examination of Financial Information in Prospectuses involves performing procedures to obtain audit evidence corroborating the amounts and dis- closures in the 1nancial statements. e audit procedures selected are based on our assessment of the risks of material misstatements in the 1nancial statements, whether due to fraud or error. In making those risk assessments, we consider the internal control relevant to the company’s preparation and fair presentation of the 1nancial statements as a basis for designing audit procedures that are applicable under those cir- cumstances but not for the purpose of expressing an opinion on the e#ectiveness of the company’s internal control. An audit also involves evaluating the accounting policies applied and the reasonableness of the signi1cant account-ing estimates made by the Board of Directors and the Managing Director and evaluat- ing the overall presentation of the 1nan-cial statements. We believe that the audit evidence we have obtained is su8cient and appropriate to provide a basis for our opinion.

Opinion In our opinion, the consolidated 1nancial statements give a true and fair view in accordance with Interna- tional Financial Reporting Standards as adopted by the EU and additional applicable framework of the 1nancial position of the group as of February +*, +)%& and +)%0 and its 1nancial performance, statement of changes in equity and cash 7ows for these years.

Stockholm, 0 June +)%$

Ernst & Young AB

Erik Åström Authorized Public Accountant

"is is an in-house translation of the Auditor’s statement prepared in the Swedish language. In the event of any di&er-ences between this translation and the original Swedish version, the latter shall prevail.

F-34 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) DEFINITIONS AND GLOSSARY

DEFINITIONS AND GLOSSARY

Anchorage means funds accounts and companies managed by Anchorage Capital Group, L.L.C.; Articles of Association means the articles of association of the Company; Audit Committee means the audit committee of the Board; BlueCrest means funds advised by BlueCrest Multi Strategy Credit Master Fund Limited; BlueMountain means funds advised by BlueMountain Capital Management, LLC; Board or Board of Directors means the board of directors of the Company; Carnegie means Carnegie Investment Bank AB (publ); Code means the Swedish Corporate Governance Code; Company means Nobina AB (publ); Danske Bank means Danske Bank A/S, Danmark, Sverige Filial; Director means a director of the Board; EEA means the European Economic Area; EU means the European Union; Euroclear Sweden means Euroclear Sweden AB, a Swedish central securities depository and clearing organisation; EY means Ernst & Young AB; FASB means the Financial Accounting Standards Board; Gladwyne means funds advised by Gladwyne Investments LLP; Group means Nobina AB (publ) and its subsidiaries; IFRS means the International Financial Reporting Standards, as adopted by the EU; Invesco means funds advised by Invesco Senior Secured Management Inc.; Ironshield Capital means funds advised by Ironshield Capital Management LLP; Joint Bookrunners means Carnegie, Danske Bank and Pareto Securities; Joint Global Coordinators means Carnegie and Danske Bank; Kite Lake means funds advised by Kite Lake Capital Management (UK) LLP; LCA means Life Cycle Assessment; Magnolia Road means funds advised by Magnolia Road Capital LP; Member States means the member states of the EU; Nobina Denmark means Nobina Danmark A/S; Nobina Europe means Nobina Europe AB (publ); Nobina Finland means Nobina Finland Oy; Nobina Fleet means Nobina Fleet AB; Nobina Norway means Nobina Norge AS; Nobina Sweden means Nobina Sverige AB; Nomination Committee means the nomination committee of the Company; Offer means the offering of Shares as described in this Prospectus; Offer Price Range means TT–VW SEK; Over-allotment Option means the ability of Joint Bookrunners to acquire additional shares from Sothic Capital, Anchorage and Invesco to cover any over-allotments or other short positions, if any, in connection with the Offer;

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) A-1 DEFINITIONS AND GLOSSARY

Pareto Securities means Pareto Securities AB; Placing Agreement means the placing agreement to be entered into between the Company, the Selling Shareholders and the Joint Bookrunners, as further described in the section “Plan of distribution”; Prospectus means this document; PTA means a public transport authority; PwC means PricewaterhouseCoopers AB; QIB means “Qualified Institutional Buyer” as defined in Rule XYYA; Regulation S means Regulation S under the Securities Act; Relevant Member State means any member state of the EEA that has implemented the Prospectus Directive, excluding Sweden; Remuneration Committee means the remuneration committee of the Board; Reverse Share Split means the X:Xa reverse Share split, resolved at the annual general meeting on ^b May ^aX_; Rule IJJA means Rule XYYA under the Securities Act; SEB means Skandinaviska Enskilda Banken AB (publ); Securities Act means the U.S. Securities Act of XZ[[, as amended; Selling Shareholders means Sothic Capital, BlueMountain, Invesco, Anchorage, BlueCrest, Ironshield, Gladwyne, Kite Lake and Magnolia; SFSA means the Swedish Financial Supervisory Authority ( Sw. Finansinspektionen ); Shares means the ordinary shares of SEK [.`a each in the share capital of the Company after the Reverse Share Split; Sothic Capital means funds advised by Sothic Capital Management LLP; Swedish Companies Act means the Swedish Companies Act (^aa_:__X); Swedish Prospectus means the prospectus in Swedish published in connection with the Offer; Trading Act means the Swedish Financial Instruments Trading Act ( Sw. lagen (7887:8:;) om handel med finansiella instrument ); and Utilities Directive means Directive ^aXY/^_/EU of the European Parliament and of the Council on procurement by entities operating in the water, energy, transport and postal services sectors.

A-2 INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) ADDRESSES

ADDRESSES

THE COMPANY

Nobina AB (publ) Armégatan [f SE-XbX bX Solna Stockholm Sweden

JOINT BOOKRUNNERS

Carnegie Investment Bank AB Danske Bank A/S, Pareto Securities AB Regeringsgatan _` Danmark, Sverige Filial Berzelii Park Z SE-Xa[ [f Stockholm Norrmalmstorg X P.O. Box bYX_ Sweden SE-Xa[ Z^ Stockholm SE-Xa[ ZX Stockholm Sweden Sweden

LEGAL ADVISORS To the Company As to Swedish law As to U.S. law

Gernandt & Danielsson Advokatbyrå KB Latham & Watkins (London) LLP Hamngatan ^ ZZ Bishopsgate SE-XXX Yb Stockholm London EC^M [XF Sweden United Kingdom

To the Joint Bookrunners As to Swedish law

Advokatfirman Hammarskiöld & Co Skeppsbron Y^ SE-Xa[ Xb Stockholm Sweden

AUDITOR

Öhrlings PricewaterhouseCoopers AB Torsgatan ^X SE-XX[ Zb Stockholm Sweden

INVITATION TO SUBSCRIBE FOR SHARES IN NOBINA AB (PUBL) A-3