Note 7 - Exchange-rate differences that affected profits

Transaction exposure

The Group’s purchases were primarily in foreign currency, mainly in USD and EUR, while sales were in each subsidiary’s currency. This means that the Group’s sales and earnings were influenced by currency fluctuations. The Group uses mainly currency forwards to limit the effect of short-term exchange-rate differences.

Translation exposure

All transactions between Hemtex AB and other companies in the Group occur in each company’s local currency, which is why exchange-rate differences generally only occur in the Parent Company. At Group level, exchange-rate differences arise when the income statements and balance sheets for foreign subsidiaries are consolidated. This change in value is recognized in the translation reserve in shareholders’ equity. This exposure is not hedged.