Translation exposure on consolidation of units outside Sweden
In addition to the effects of transaction exposure, profits are also
affected
by translation effects as a result of changes in exchange ratesfor the local currencies of the various foreign subsidiaries against the
Swedish krona, compared to the same period the previous year. The
underlying profit/loss in a market may be unchanged in the local currency,
but when converted into SEK may increase if the Swedish krona
has weakened or decrease if the Swedish krona has strengthened.
Translation effects affect the group’s net assets on consolidation of
the foreign subsidiaries’ balance sheets (translation exposure in the
balance sheet). No exchange rate hedging (equity hedging) is carried
out for this risk.