Storskogen Group Ab Class B · OMXSTO:STOR_B
Storskogen Group Ab Class B — Q3 2024 Earnings Presentation
27 slides from Storskogen Group Ab Class B's earnings presentation, Nov 7, 2024
Slide 1: Storskogen Q3 2024
Storskogen Q3 2024 TODAY’S PRESENTERS Christer Hansson Lena Glader CEO CFO November 2024 1
Slide 2: Storskogen in brief
Storskogen in brief Storskogen is an international business group with LTM net sales of SEK 34.6bn and adj. EBITA of SEK 3.1bn, split across three business areas consisting of business units averaging SEK ~290m1 in sales Services Trade Industry NO. OF BUSINESS UNITS NO. OF BUSINESS UNITS NO. OF BUSI
Slide 3: Highlights
Highlights Positive organic sales and EBITA growth for the quarter KEY EVENTS NET SALES, Q3: ORGANIC NET SALES GROWTH, YTD: • LTM adj. cash conversion ahead of target at 99% (95) SEK 7,991m 0% (-4%1) (-2%2) • Interest-bearing net debt/RTM adj. EBITDA at 2.6x • Positive organic sales and EBITA growth
Slide 4: Net sales and EBITA margin
Net sales and EBITA margin Positive organic sales growth in all business areas in Q3, and margin improvement driven by divestments and Services Financial development COMMENT 10,000 11% • Sales in line with seasonal 9,000 10% patterns 9.7% 9.7% 9.8% 9% 8,000 9.4% 9.6% 9.7% 9.2% 8% • Divestments (-5%)
Slide 5: Services
Services Positive organic sales and EBITA growth in the quarter NET SALES, Q3: ORGANIC NET SALES GROWTH, YTD: COMMENTS SEK 2,339m 3% • Sales affected by divestments (-11%) and acquisitions/FX (-1%) offset by organic growth (-9%1) (-2%2) (+3%) • Operational efficiency measures yielding ADJ. EBITA, Q3
Slide 6: Trade
Trade Y/Y margin improvement in seasonally softer third quarter NET SALES, Q3: ORGANIC NET SALES GROWTH, YTD COMMENTS SEK 2,253m 0% • Sales affected by divestments (-6%) and acquisitions/FX (-2%) offset by organic growth (-4%1) (-3%2) (+4%) • Operational efficiency measures yielding early ADJ. EBITA
Slide 7: Industry
Industry Sales and EBITA in line with last year NET SALES, Q3: ORGANIC NET SALES GROWTH, YTD COMMENTS SEK 3,414m -2% • Sales affected by divestments (-1%) and acquisitions/FX (-1%) offset by organic growth (0%1) (0%2) (+2%) • EBITA margin in line with last year ADJ. EBITA, Q3: ORGANIC EBITA GROWTH,
Slide 8: Making progress in prioritised areas
Making progress in prioritised areas Progress in all prioritised areas with a clear set of triggers for returning to a normalised state Triggers • Satisfactory leverage ratio Today Tomorrow • Persistent organic EBITA growth • Organic EBITA growth • Favourable market conditions • Persistent organic E
Slide 9: Update on operational initiatives
Update on operational initiatives Selected examples of operational initiatives across all three business areas Services Trade Industry 9
Slide 10: Financial update
Storskogen Q3 2024 Financial update 10
Slide 11: Financial summary, adjusted for IAC
Financial summary, adjusted for IAC Y/Y sales decline; profit growth due to divestments, efficiency gains and lower financial items SEKm Q3 24 Q3 23 Chg., % YTD 24 YTD 23 Chg., % Net sales 7,991 8,333 -4 25,592 27,009 -5 C.O.G.S -6,330 -6,726 -6 -20,328 -21,544 -6 Gross profit 1,662 1,607 3 5,264 5,
Slide 12: Financial summary, reported
Financial summary, reported No significant IAC in Q3; YTD EBIT and net profit burdened by SEK -970m and SEK -1,030m respectively SEKm Q3 24 Q3 23 Chg., % YTD 24 YTD 23 Chg., % Net sales 7,991 8,333 -4 25,592 27,009 -5 C.O.G.S -6,330 -6,726 -6 -21,029 -21,544 -2 Gross profit 1,662 1,607 3 4,562 5,464
Slide 13: Q3 sales bridge
Q3 sales bridge Positive organic sales growth; negative Y/Y change explained by divestments SEKm -4% 0% -2% 8,333 3% -5% 7,991 Net sales, Q3 23 Organic growth Acquisitions FX Divestments Net sales, Q3 24 13
Slide 14: Q3 bridges by business area
Q3 bridges by business area Divestment of low performers affected sales negatively but EBITA positively Net sales, SEKm Adj. EBITA, SEKm -4%1 8,333 -3% 7,991 +8%1 -1% 0% 783 0% 3% 725 2% 3% ∆ from acq. /div. 2 ∆ from acq. /div.2 Group -5% Group 4% Services -3% Services 3% Trade -2% Trade 1% Industry
Slide 15: Condensed cash flow
Condensed cash flow Maintained cash flow focus: cash conversion (LTM) at 99% and capex/sales 1.4% in Q3. Small working capital tie-up, as seasonally expected, and no significant impact from M&A SEKm Q3 24 Q3 23 Chg., % LTM Profit before tax 362 192 89 262 Adjustment for non-cash items 386 552 -30 2,
Slide 16: Operating cash flow and cash conversion
Operating cash flow and cash conversion Stabilised cash flow and cash conversion (LTM) is well ahead of target Operating cash flow1 (LTM) 5,000 140% 4,500 120% 4,000 104% 104% 101% 99% 95% 100% 3,500 87% 3,000 71% 80% 2,500 59% 50% 60% 2,000 1,500 40% 1,000 20% 500 1,794 2,397 3,174 3,929 4,281 4,48
Slide 17: Condensed balance sheet
Condensed balance sheet Strengthened Y/Y by net debt and WC reduction, and GW write-down with recent divestments SEKm Sep 24 Sep 23 Chg., % Dec 23 Total non-current assets 29,672 30,878 -4 30,597 Total current assets 13,657 15,017 -9 13,572 Total assets 43,329 45,895 -6 44,169 Total equity 20,128 20
Slide 18: Total debt and leverage
Total debt and leverage IB net debt reduced by SEK -254m in Q3 and by SEK -789m LTM. Small increase in adj. RTM EBITDA in Q3 to SEK 4,142m, but Y/Y decrease of 8% Gross debt/cash & cash equivalents, SEKm RTM adj. EBITDA, SEKm 20,000 5,500 2,988 2,784 15,000 2,723 5,000 1,859 2,348 2,220 1,782 1,771
Slide 19: Debt maturities
Debt maturities A balanced and diversified funding structure with an even maturity profile, further improved through a successful bond refinancing in October Bond Bond RCF SEKm Term loan Bond Unutilised bank credit Bond Cash and cash equivalents RCF extension option 3,680 1,700 1 2,149 2,000 3,542 2
Slide 20: Key takeaways
Key takeaways Operational focus yielding positive effects Operational initiatives yielding positive effects in all prioritised areas Continued focus on organic EBITA growth and cash flow No significant bond maturities until 2027 – flexibility to focus on operational improvements We look forward to s
Slide 21: Q&A
Q&A TODAY’S PRESENTERS Christer Hansson Lena Glader CEO CFO 21
Slide 22: Appendix
Appendix 22
Slide 23: Financial development per segment
Financial development per segment Industry stabilising as demand normalises, and margin trend (LTM) trending positively in Services and Trade Services Trade Industry 12,000 12% 12,000 12% 15,000 12% 11,000 11,000 14,000 13,000 10,000 10% 10,000 10% 10% 12,000 9,000 9,000 11,000 8,000 8% 8,000 8% 10,
Slide 24: Organic sales growth
Organic sales growth Positive organic sales growth across all three business areas Organic growth (QTD1) 30% 25% 24% 20% 20% 15% 17% 17% 16% 10% 11% 5% 6% 4% 3% 3% 2% 0% -2% -5% -7% -6% -6% -5% -10% Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 1 Com
Slide 25: Cash flow bridge, Q3
Cash flow bridge, Q3 Cash flow after leasing and capex continues to be solid LTM, SEKm 2,876 2,435 441 498 191 574 1,613 171 221 271 1,292 Cash flow Change Cash flow Capex Net Leasing Free cash flow Acquisitions Acquired Paid Cash flow from in working from investments after leasing and and divested
Slide 26: Net debt and leverage
Net debt and leverage Net debt and leverage ratio improvement despite seasonally softer third quarter Leverage ratio 18,000 4 16,000 14,000 3 12,000 2-3x leverage 2.7 2.6 2.6 2.6 2.6 2.8 2.7 2.6 target range 10,000 2.5 2.5 2 8,000 1.8 6,000 1 4,000 2,000 7,524 12,096 12,670 12,260 12,125 11,896 11,7
Slide 27: Overview of financial targets
Overview of financial targets Focus is on organic EBITA growth, cash flows and improving the leverage ratio MEDIUM- Organic Adjusted EBITA growth Adjusted Adjusted cash Interest-bearing net TERM EBITA growth: including EBITA margin conversion on an debt / TARGETS Real GDP acquisitions: (over time):