Slide 1: Presentation – Interim Report January September 2017
PRESENTATION – INTERIM REPORT JANUARY SEPTEMBER 2017 26 OCTOBER 2017
Slide 2: Contents
CONTENTS 1 Business overview 3 2 Dental 13 3 Demolition & Tools 17 4 Systems Solutions 20 5 Group overview 23 2
Slide 3: Management and Chairman
MANAGEMENT AND CHAIRMAN Fredrik Karlsson Per Waldemarson Therése Hoffman Ingvar Ljungqvist Carl Bennet CEO President Dental CFO Head of Acquisitions Chairman Born: 1962 Born: 1977 Born: 1971 Born: 1960 Born: 1951 Education Education Education Education Other assignments • MSc in Engineering • MSc in
Slide 4: Organised in three business areas
ORGANISED IN THREE BUSINESS AREAS Sales 2017 LTM: 9,676 MSEK EBITA 2017 LTM: 1,602 MSEK Dental Demolition & Tools Systems Solutions Leading distributors of dental products in Leading producers of demolition robots and Wide range of leading systems solutions Nordics and Germany attachments for excava
Slide 5: Lifco develops leading niche companies
LIFCO DEVELOPS LEADING NICHE COMPANIES Dental Demolition & Tools Systems Solutions 3 MANAGEMENT LAYERS COMPANIES COUNTRIES EMPLOYEES1) All managers have incentives connected to 132 26 4,632 EBITA and working capital development 1) 2017-09-30 5
Slide 6: Lifco's philosophy for value creation
LIFCO’S PHILOSOPHY FOR VALUE CREATION Long-term perspective • Long-term perspective on corporate development Focus on profitability • Good profitability is a prerequisite for sustainable growth • Our subsidiaries have a high degree of independence. That is the foundation Decentralized for the creati
Slide 7: One target: to increase profits every year
ONE TARGET: TO INCREASE PROFITS EVERY YEAR EBITA before acquisition costs (MSEK) LTM 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Dental Demolition & Tools Systems Solutions Note: IFRS accounting since 2012, prior years Swedish GAAP. 7
Slide 8: Maintaining focus on capital employed
MAINTAINING FOCUS ON CAPITAL EMPLOYED EBITA margin ROCE excl. goodwill and other intang. assets x.x% ROCE incl. goodwill and other intangible assets 16.6% 15.0% 15.3% 157% 141% 123% 19.9% 18.7% 18.9% 2015 2016 2017 LTM 2015 2016 2017 LTM 8
Slide 9: Actions to create sustainable profit growth
ACTIONS TO CREATE SUSTAINABLE PROFIT GROWTH Right person in the right position • Motivated managers who deliver results Continuous pricing optimization • Focus on customers with potential for sustainable profit growth Optimized management structure • Focus on value adding personnel and minimized bur
Slide 10: Examples of value creation
EXAMPLES OF VALUE CREATION Dental1 - EBIT (MSEK) and organic EBIT growth Brokk2 - EBIT (MSEK) and organic EBIT growth CAGR CAGR 19% 11% CAGR 4% CAGR CAGR 8% 183 CAGR 167 11% 169 32% 118 79 71 31 14 1997 2006 2013 2015 2000 2006 2013 2015 EBIT EBIT 5% 12% 18% 19% 10% 27% 33% 40% margin margin 1) Comp
Slide 11: Geographic footprint
GEOGRAPHIC FOOTPRINT Dental Sweden 18% North Germany Rest of America Europe 20% Demolition & Tools 7% 45% Asia & Australia Rest of 9% World 1% Systems Solutions Note: Geographic split 2016 11
Slide 12: Contents
CONTENTS 1 Business overview 3 2 Dental 13 3 Demolition & Tools 17 4 Systems Solutions 20 5 Group overview 23 12
Slide 13: Dental
DENTAL Sales split by product category 2016 EBITA* and % of total EBITA** 2017 LTM Prosthetics Other 41% Other 700 MSEK Manufacturing 2% 6% Prosthetics 19% Sales split by geography 2016 Other 4% Sweden 73% Rest of 15% Europe Distribution 43% 38% Germany Manufacturing Distribution *Before acquisition
Slide 14: Strong foothold on key markets
STRONG FOOTHOLD ON KEY MARKETS Lifco’s dental market presence and example of brands used in different markets Lifco’s market positions within dental consumables Sweden Norway Denmark Finland Germany Rest of Europe Distribution of consumables ✓ ✓ ✓ ✓ ✓ ✓ FI ✓ Distribution of equipment ✓ ✓ ✓ ✓ Nordics
Slide 15: Dental financial overview
DENTAL FINANCIAL OVERVIEW Sales (MSEK) EBITA (MSEK) and EBITA margin 800 20,0% 18,0% 700 16,0% 3,823 600 3,590 14,0% 3,435 3,266 500 12,0% 2,840 2,826 2,439 400 10,0% 8,0% 300 1,663 1,674 1,435 6,0% 200 1,048 890 LTM LTM 4,0% 100 2,0% 0 0,0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 16: Contents
CONTENTS 1 Business overview 3 2 Dental 13 3 Demolition & Tools 17 4 Systems Solutions 20 5 Group overview 23 16
Slide 17: Demolition & Tools
DEMOLITION & TOOLS Sales split by business 2016 EBITA* and % of total EBITA** 2017 LTM Demolition machines 30% 510 MSEK Attachments Demolition Attachments for 47% Demolition excavators and for excavators 53% machines Sales split by geography 2016 machines cranes and cranes Rest of World 2% Sweden AP
Slide 18: Demolition & Tools financial overview
DEMOLITION & TOOLS FINANCIAL OVERVIEW Sales (MSEK) EBITA (MSEK) and EBITA margin 600 35,0% 30,0% 500 2,069 25,0% 400 1,726 1,574 20,0% 300 1,289 1,176 1,189 15,0% 1,039 992 862 200 743 736 LTM 10,0% LTM 373 100 5,0% 0 0,0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2006 2007 2008 20
Slide 19: Contents
CONTENTS 1 Business overview 3 2 Dental 13 3 Demolition & Tools 17 4 Systems Solutions 20 5 Group overview 23 19
Slide 20: Systems Solutions
SYSTEMS SOLUTIONS Sales split by product category 2016 EBITA* and % of total EBITA** 2017 LTM Environ- Contract mental manufacturing technology 29% 494 MSEK Environmental technology Contract manufacturing 27% Construc- tion material 23% Construction Sales split by geography 2016 15% material Rest of
Slide 21: Systems Solutions financial overview
SYSTEMS SOLUTIONS FINANCIAL OVERVIEW Sales (MSEK) EBITA (MSEK) and EBITA margin 600 14,0% 3,784 3,671 12,0% 500 2,892 10,0% 400 2,428 2,276 2,247 2,168 8,0% 2,055 2,014 1,869 300 1,747 6,0% 1,366 200 4,0% LTM LTM 100 2,0% 0 0,0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2006 2007 2
Slide 22: Contents
CONTENTS 1 Business overview 3 2 Dental 13 3 Demolition & Tools 17 4 Systems Solutions 20 5 Group overview 23 22
Slide 23: Lifco Group financial overview
LIFCO GROUP FINANCIAL OVERVIEW Sales (MSEK) EBITA (MSEK) and EBITA margin 1800 18,0% 1600 16,0% 1400 14,0% 9,676 8,987 1200 12,0% 7,901 6,802 1000 10,0% 6,184 6,030 5,707 800 8,0% 4,901 4,591 4,146 600 6,0% 3,660 2,629 400 4,0% LTM LTM 200 2,0% 0 0,0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 201
Slide 24: Strong cash flow generation
STRONG CASH FLOW GENERATION Operating cash flow after tax, Capex and depreciation2 before investments 114 105 1,084 102 94 948 81 67 586 80% 79% 1.5% 61% 1.3% 1.3% 1.0% 1.0% 1.0% 2014 2015 2016 2014 2015 2016 Capex (MSEK) Depreciation (MSEK) Operating cash flow Cash flow conversion (%) 1 Capex as %
Slide 25: Overview of acquisitions 2006–2012
OVERVIEW OF ACQUISITIONS 2006–2012 Sales at Total sales Segment split - # of acquisitions Year Company Description Type Country acquisition MSEK 2006-2017 Darda Producer of attachments for demolition robots Demolition & Tools Germany MEUR 8 2006 Dental Prime Distributor of dental equipment and servi
Slide 26: Overview of acquisitions 2014–2016
OVERVIEW OF ACQUISITIONS 2014–2016 Sales at Total sales Year Company Description Type Country acquisition MSEK 2014 MDH Producer of dental prosthetics Dental Germany MEUR 44 400 Auger Torque Producer of earth drills Demolition & Tools UK MGBP 10 J.H. Orsing Dental products Dental Sweden MSEK 20 Prev
Slide 27: Overview of acquisitions 2017
OVERVIEW OF ACQUISITIONS 2017 Sales at Total sales Year Company Description Type Country acquisition MSEK Haglöf Sweden Professional forest inventory instruments Systems Solution Sweden MSEK 60 Hultdins Manufactures tools for forest machines Demolition & Tools Sweden MSEK 152 Silvent Energy optimiza
Slide 28: Financial targets
FINANCIAL TARGETS • Organic growth in EBITA in excess of GDP growth in relevant geographies Growth in EBITA • Acquisitions to add additional growth EBITA/Capital • More than 50% employed1 Net debt/EBITDA • Normally in the range 2-3x Dividend policy • Distribute 30-50% of net profit as % of net profi
Slide 29: The Group's financial performance
THE GROUP’S FINANCIAL PERFORMANCE MSEK Q317 Q316 Change 9M17 9M16 Change Net sales 2,365 2,128 11.1%* 7,241 6,552 10.5%** EBITA*** 404 316 28.0% 1,222 997 22.6% EBITA margin*** 17.1% 14.8% 2.3 16.9% 15.2% 1.7 Profit before tax 332 277 19.9% 1,031 889 16.0% Net profit for the period 254 208 22.4% 778
Slide 30: The business areas' financial performance
THE BUSINESS AREAS’ FINANCIAL PERFORMANCE DENTAL MSEK Q317 Q316 Change 9M17 9M16 Change Net sales 848 804 5.5% 2,809 2,576 9.0% EBITA* 155 144 7.1% 517 472 9.5% EBITA margin* 18.2% 17.9% 0.3 18.4% 18.3% 0.1 DEMOLITION & TOOLS MSEK Q317 Q316 Change 9M17 9M16 Change Net sales 569 431 32.2% 1,627 1,284
Slide 31: Financial performance last twelve months
FINANCIAL PERFORMANCE LAST TWELVE MONTHS GROUP DENTAL MSEK 2017 LTM 2016 Change MSEK 2017 LTM 2016 Change Net sales 9,676 8,987 7.7%** Net sales 3,823 3,590 6.5% EBITA* 1,602 1,377 16.4% EBITA* 700 655 6.8% EBITA margin* 16.6% 15.3% 1.3 EBITA margin* 18.3% 18.2% 0.1 Profit before tax 1,361 1,219 11.
Slide 32: Lifco Group balance sheet
LIFCO GROUP BALANCE SHEET Comments Balance sheet 30 Sep 31 Dec 30 Jun MSEK 2017 2016 2017 • Interest bearing net debt increased 870 MSEK from year- Intangible fixed assets 8,017 6,824 7,656 end to 3,888 MSEK due to acquisitions of 1,221 MSEK Tangible fixed assets 530 464 528 Financial assets 113 109
Slide 33: Growth or profit? Profit growth!
GROWTH OR PROFIT? PROFIT GROWTH! 33
Slide 34: Disclaimer
DISCLAIMER Important information This material (the “Material”) has been prepared by Lifco AB (publ) (“Lifco”) in good faith and for information purposes only. Unless otherwise stated, Lifco is the source of all data contained in the Material. All data contained herein is provided as of the date of
Slide 35: Lifco
LIFCO