Storskogen Group Ab Class B · OMXSTO:STOR_B
Storskogen Group Ab Class B — Q4 2023 Earnings Presentation
27 slides from Storskogen Group Ab Class B's earnings presentation, Feb 15, 2024
Slide 1: Storskogen Q4 2023
Storskogen Q4 2023 TODAY’S PRESENTERS Daniel Kaplan Lena Glader CEO CFO February 2024 1
Slide 2: Highlights
Highlights Soft quarter but solid full year with improved cash flows and reduced debt KEY EVENTS NET SALES, Q4: NET SALES, 2023: • Divestments affecting net sales by -6 percent YoY SEK 8,997m SEK 36,006m • Cash flow from operating activities continued to improve: (-9%1) (5%1) • Q4: SEK 1,459m (1,272
Slide 3: Net sales and EBITA margin
Net sales and EBITA margin Sales on a par with the comparable quarter, with margin contraction driven by Services and Trade Financial development COMMENT 10,000 11% • Sales increased 8 percent vs. 9,000 10% Q3, but margin pressure in 8,000 9.7% 9.4% 9.6% 9.7% 9% Trade and Services 9.2% 8.7% 8% 7,000
Slide 4: Update on strategic priorities
Update on strategic priorities Solid delivery on the strategic priorities set out at the Capital Markets Day in September 2022 Priorities Status Comment Operating cash flow1 has improved by SEK Improve cash flow 2.1bn in 2022 to SEK 4.5bn in 2023 Protect profitability FY adj. EBITA margin of 9.0 per
Slide 5: Cash flow from operations
Cash flow from operations Prioritising cash flow from operating activities yielded tangible results in 2023 Cash flow from operating activities, LTM 106% 3,361 3,175 2,795 2,278 1,628 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 5
Slide 6: Update on working capital project
Update on working capital project By means of education, target-setting and provision of analysis tools, several WC-reducing activities have been implemented across the organisation, ensuring long-term structural change Education and support Working capital ratio • Cross-organisation educational eve
Slide 7: Capital expenditures
Business Insight Capital expenditures • Founded in 1976, based in Enköping (Sweden), and Continued capex investments driving organic growth acquired by Storskogen in 2013 • Primarily performs contract manufacturing of Organic prototypes for industry, as well as small series in sales -4% 17% 12% -3%
Slide 8: Services
Services Weak quarter but FY largely in line with 2022 NET SALES, Q4: NET SALES, 2023: COMMENTS SEK 2,918m SEK 11,346m • Sales increased 13% compared to Q3, in line with last year adjusted for divestments (-10%1) (0%1) • Companies divested in 2023 had sales of SEK 377m in the comparable quarter ADJ.
Slide 9: Trade
Trade Margin pressure but significantly improved cash flows NET SALES, Q4: NET SALES, 2023: COMMENTS SEK 2,538m SEK 10,048m • Sales increased 8% compared to Q3, but with increased margin pressure (-13%1) (4%1) • Companies divested in 2023 had sales of SEK 181m in the comparable quarter ADJ. EBITA, Q
Slide 10: Industry
Industry Demand has normalised from high levels and cash flow has improved significantly NET SALES, Q4: NET SALES, 2023: COMMENTS SEK 3,555m SEK 14,662m • Sales increased 4% compared to Q3 as demand normalised after a strong H1 (-3%1) (10%1) • 2023 organic growth: • Sales: -1% (11) ADJ. EBITA, Q4: A
Slide 11: Financial summary, Q4
Financial summary, Q4 Divestments and negative organic growth affected quarter SEKm Q4’23 Q4’22 Chg., % LTM COMMENTS Net sales 8,997 9,836 -9 36,006 • Q4 net sales decrease of 9%, impacted C.O.G.S -7,145 -7,901 -10 -28,690 by divestments and organic growth Gross profit 1,852 1,935 -4 7,316 • Gross m
Slide 12: Financial summary, FY
Financial summary, FY EPS negatively affected by higher interest costs Jan-Dec Jan-Dec SEKm 2023 2022 Chg., % LTM COMMENTS Net sales 36,006 34,250 5 36,006 • FY net sales growth of 5% C.O.G.S -28,690 -27,475 4 -28,690 • Gross profit growth of 8% Gross profit 7,316 6,775 8 7,316 Selling & admin. Expe
Slide 13: Full-year bridge
Full-year bridge Sales and EBITA growth driven by Industry, but margin dilution attributable to Trade Net sales, SEKm Adj. EBITA, SEKm 5% 3% 36,006 3,143 3,238 24 22 50 119 186 1,374 34,250 411 5 Net sales, Services Trade Industry Group Net sales, Adj. EBITA Services Trade Industry Group Adj. EBITA
Slide 14: Sales development
Sales development Soft quarter primarily caused by divestments and negative organic growth in Trade and Services, while acquisitions support FY sales growth Q4, SEKm 2023, SEKm -9% 5% 9,836 -4% 36,006 -5% 1% 34,250 10% 1% -6% 8,997 -3% 2% Acq. in 2023 = 1% Net sales, Organic Currency Acquisitions Di
Slide 15: Condensed cash flow, Q4
Condensed cash flow, Q4 Focus on cash flow yielding significant results SEKm Q4’23 Q4’22 Chg., % 2023 COMMENTS Profit before tax 243 553 -56 1,321 • Change in WC: SEK 692m (306) in Q4, thanks to significant reduction in Adjustment for non-cash items 504 419 20 2,057 inventories and receivables Incom
Slide 16: Operating cash flow and cash conversion
Operating cash flow and cash conversion Cash flow improvement supported by working capital efficiency and LTM cash conversion well ahead of target Operating cash flow1 (LTM) 5,000 140% 4,500 120% 4,000 104% 95% 100% 3,500 87% 3,000 73% 71% 80% 2,500 55% 59% 50% 60% 2,000 1,500 32% 40% 1,000 20% 500
Slide 17: Cash flow bridge, FY 2023
Cash flow bridge, FY 2023 Significant full-year improvement in free cash flow after capex and leasing Y/Y increase LTM, SEKm SEK 1,738m 3,361 798 610 2,563 36 563 176 2,224 421 636 1,833 2023 cash Change 2023 cash Capex Net Leasing Free cash flow Acquisitions Acquired Paid Cash flow flow from in wor
Slide 18: Total debt and leverage
Total debt and leverage Strong cash flows have enabled significant debt reduction, gross and net, during the year COMMENTS Gross debt/Cash & cash equivalents, SEKm RTM adj. EBITDA, SEKm • Total debt 20,000 5,500 • Q4: SEK -906m 2,997 • 2023: SEK -3,489m 2,988 2,784 5,000 15,000 1,792 1,859 2,723 2,3
Slide 19: Condensed balance sheet
Condensed balance sheet Debt significantly reduced in 2023 SEKm Dec’23 Dec’22 Chg., % COMMENTS Total non-current assets 30,597 30,369 -2 Total current assets 13,572 16,389 -17 • Balance sheet 7% lighter at SEK 44bn Total assets 44,169 47,482 -7 • Divestments • Working capital reduction Total equity
Slide 20: Key takeaways
Key takeaways Weak quarter but solid FY with delivery on strategic priorities Efforts to improve cash flow have yielded strong results across all business areas Significantly reduced debt Continued focus on cost control due to margin pressure in Q4 Priorities unchanged given short-term uncertainty w
Slide 21: Q&A
Q&A TODAY’S PRESENTERS Daniel Kaplan Lena Glader CEO CFO 21
Slide 22: Appendix
Appendix 22
Slide 23: Storskogen in brief
Storskogen in brief Storskogen is an international group of businesses with annual LTM net sales of SEK 36.0bn and Adj. EBITA of SEK 3.2bn, split across three business areas and 14 verticals Services Trade Industry Peter Ahlgren Christer Hansson Fredrik Bergegård NO. OF BUSINESS UNITS1 NO. OF BUSINE
Slide 24: Financial development per segment
Financial development per segment Industry stabilising as demand has normalised. Continued margin pressure in Trade, and soft Q4 in Services Services Trade Industry 12,000 12% 12,000 12% 15,000 11,000 11,000 14,000 11.6% 11.5% 11.4% 12% 11.1% 11.0% 11.2% 10.0% 10.0% 10.0% 9.7% 9.6% 13,000 10,000 9.5
Slide 25: Organic sales growth
Organic sales growth Organic sales growth in negative territory, primarily driven by Trade Organic growth (QTD1) 30% 25% 24% 20% 20% 15% 17% 17% 16% 10% 11% 5% 6% 4% 3% 0% -2% -5% -5% -7% -6% -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 1 Comparable sample based
Slide 26: Net debt and leverage
Net debt and leverage Significant debt reduction in 2023, and leverage ratio lowered to 2.5x in Q4. Further reduction in short to medium term being a key priority 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 target range 10,000 2.5 2.5 2 8,000 1.8 6,000 1 4,000 0.
Slide 27: Overview of financial targets
Overview of financial targets Focus is on operational excellence, balance sheet and cash flow in the short to medium term 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: