Slide 1: Q3 2017
Q3 2017 MÅRTEN ANDERSSON, CEO MATTIAS BJÖRK, CFO NOVEMBER 9, 2017
Slide 2: Financial development in Q3 2017
FINANCIAL DEVELOPMENT IN Q3 2017. Net sales EBITA SEK 1,224m SEK 96m (839) (90) Operating cash flow Q3 SEK 97m (69) 2
Slide 3: Growth and further acquisitions
GROWTH AND FURTHER ACQUISITIONS. • A substantial growth leap with Akademibokhandeln as a new business area with a growth in net sales and EBITA by 46% and 6% respectively compared to Q3 2016. Stable performance in our business areas – the business areas Trading and Consumer show increased EBITA NET
Slide 4: Financial development LTM Q3 2017
FINANCIAL DEVELOPMENT LTM Q3 2017. Net sales EBITA1 SEK 3,618m SEK 308m (3,206 FY2016) (318 FY2016) Operating Organic LTM cash flow2 EBITA SEK growth 301m –8% (344 FY2016) 1) EBITA negatively affected by one-off items of SEK 12.1m (33.8m) 2) Operating cash flow negatively affected by payment of one-
Slide 5: Growth in Consumer and Trading, still weak development in Industry
GROWTH IN CONSUMER AND TRADING, STILL WEAK DEVELOPMENT IN INDUSTRY. TRADING CONSUMER INDUSTRY AKADEMIBOKHANDELN2 -2.7% +1.4% -4.5% n/a Net sales growth 402 406 394 Q3 2017 219 222 215 205 Q3 2016 Q3 2017 Q3 2016 Q3 2017 Q3 2016 Q3 2017 Q3 2016 Q3 2017 +12.2% +5.8% -35.1% 1 n/a EBITA growth Q3 2017 4
Slide 6: A robust business model
A ROBUST BUSINESS MODEL. …is used for Strong operating acquisitions of …at reasonable ...and with a long- cash flow from additional valuation term approach to the business companies with multiples... value creation units… strong cash flows... ACQUIRED EBITA OPERATING CASH FLOW ACQUISITION MULTIPLES
Slide 7: Rather turn down a good deal than risk making a bad one
”Rather turn down a good deal than risk making a bad one.” PATRIK WAHLÉN 7
Slide 8: Three acquisitions in 2017 – adding SEK 171m in EBITDA
THREE ACQUISITIONS IN 2017 – ADDING SEK 171 M IN EBITDA. ANNOUNCEMENT DATE 24 May 2017 5 Jul 2017 27 Oct 2017 CLOSING DATE 3 Jul 2017 5 Jul 2017 10 Nov 2017 TYPE OF • Add-on acquisition to ACQUISITION • Business area • Business unit existing business unit • The only successful omni-channel player •
Slide 9: T-Emballage – a perfect match for the Trading business unit
T-EMBALLAGE – A PERFECT MATCH FOR THE TRADING BUSINESS UNIT. T-EMBALLAGE ACQUISITION IN BRIEF • Operations in building materials, packaging • Enterprise value (EV) of about SEK 300m solutions and logistics A new business unit within the Trading Business Area • A new business unit within the Trading
Slide 10: Well-positioned for additional acquisitions
WELL-POSITIONED FOR ADDITIONAL ACQUISITIONS. Well-defined acquisition model and process Ability to manage complex transactions Evaluated ~115 companies, year to date Strong position on the acquistion market Ventilatorverken Agro 2008 2007 Väderstad 2004 2005 2006 Ukraina 10
Slide 11: Decision to evaluate a bond issue in Volati
DECISION TO EVALUATE A BOND ISSUE IN VOLATI. Five years SEK bond issue Purpose To strengthen financial flexibility and Minimum of SEK 750m acquisition capacity Commissioned SEB and Nordea 11
Slide 12: Strong financial position for continued growth
STRONG FINANCIAL POSITION FOR CONTINUED GROWTH. RETURN ON EQUITY SALES AND EBITA NET DEBT/(CASH) % SEKm SEKm 2.79 110% 5,604 2.39 5,020 2.27 762 756 3,618 596 3,206 483 1.20 43% 2,188 44% 32% 1,656 1,509 (265) 25% 9% 4071 4472 326 215 227 318 308 (0.63) 2013 2014 2015 2016 Q3 2017 2013 2014 2015 201
Slide 13: Long-term development supports financial targets
LONG-TERM DEVELOPMENT SUPPORTS FINANCIAL TARGETS. METRIC TARGET PERFORMANCE >2.2x 308 SEK 700m Reach an adjusted EBITA of SEK 700m 137 9% EBITA growth at end of 2019 – annual organic EBITA (by 2019) Average organic EBITA growth of 5% on average growth 2013 – Q3 2017 LTM 2013 Q3 2017 LTM 93% 83% 106%
Slide 14: A growing Swedish industrial group
A growing Swedish industrial group
Slide 15: Appendix
APPENDIX. 15
Slide 16: Business area Trading – operational synergies through shared service centre
BUSINESS AREA TRADING – OPERATIONAL SYNERGIES THROUGH SHARED SERVICE CENTRE. An operational business area • Operating18 companies in 6 countries • Organised in 7 business units Integrated business model Island • Focused on four market segments: – Construction consumables and hardware (primarily B2B)
Slide 17: Business area Consumer – attractive niches
BUSINESS AREA CONSUMER – ATTRACTIVE NICHES. A strategic business area • Operating 9 companies in 6 countries • Organised in 3 business units Strong local entrepreneurship • Business units focused on B2C niches • Strong local entrepreneurship combined with collaboration in selected areas such as data
Slide 18: Business area Akademibokhandeln – Sweden's leading book retailer
BUSINESS AREA AKADEMIBOKHANDELN – SWEDEN’S LEADING BOOK RETAILER. Overview • Operating 2 companies in Sweden • Organised in 1 business unit Sweden’s leading book retailer • The only successful omni-channel player – # 1 in physical bookstores – # 2 online retailer – 37% total market share • Sales fro
Slide 19: Business area Industry – successful expansion
BUSINESS AREA INDUSTRY – SUCCESSFUL EXPANSION. A strategic business area • Operating 21 companies in 15 countries • Organised in 3 business units Thailand Strong local entrepreneurship • Business units focused on B2B niches • Strong local entrepreneurship combined with collaboration in selected area
Slide 20: Income statement
INCOME STATEMENT. SEKm 2014 2015 2016 Q3 2017 LTM 1 Jan – 30 Sep 2017 Net sales 1,656 2,188 3,207 3,618 2,839 Raw materials and supplies -547 -933 -1,526 -1,755 -1,404 Other external costs -347 -413 -516 -602 -470 Personnel costs -513 -582 -771 -870 -669 Other income 3 18 4 3 5 Other operating costs
Slide 21: Balance sheet
BALANCE SHEET. SEKm 31 Dec 2014 31 Dec 2015 31 Dec 2016 30 Sep 2017 Intangible fixed assets 1,160 1,689 1,840 2,693 Tangible fixed assets 138 180 191 205 Financial fixed assets 8 13 8 8 Other non-current marketable securities 4 7 - - Deferred tax assets 21 33 42 59 Total non-current assets 1,332 1,9
Slide 22: Cash flow statement
CASH FLOW STATEMENT. SEKm 2014 2015 2016 Q3 2017 LTM 1 Jan – 30 Sep 2017 Profit before tax 61 161 254 250 195 Adjustment for non-cash items 172 96 122 133 94 Interest paid -58 -45 -39 -24 -11 Interest received 3 1 0 1 1 Cash taxes -18 -19 -41 -48 -44 Cash flow before changes in working capital 160 1
Slide 23: Net debt and working capital
NET DEBT AND WORKING CAPITAL. SEKm 31 Dec 2014 31 Dec 2015 31 Dec 2016 30 Sep 2017 Net debt Cash and cash equivalents -156 -200 -371 -76 Current interest-bearing assets 0 0 0 0 Pension liabilities 2 2 2 2 Non-current interest-bearing liabilities 1,055 908 54 582 Current interest-bearing liabilities
Slide 24: Definitions of key metrics
DEFINITIONS OF KEY METRICS. Metric Explanation Adjusted Explanation Business area return on capital employed (BA BA EBITA in relation to BA capital employed - - ROCE) Cash conversion excluding capex related to Besikta IT Cash conversion Operating cash flow in relation to EBITDA Adj. cash conversion