Storskogen Group Ab Class B · OMXSTO:STOR_B
Storskogen Group Ab Class B — Q2 2022 Earnings Presentation
34 slides from Storskogen Group Ab Class B's earnings presentation, August 2022
Slide 1: Storskogen Q2 2022
Storskogen Q2 2022 TODAY’S PRESENTERS Daniel Kaplan Lena Glader CEO CFO August 2022 1
Slide 2: Agenda
Agenda 1. Storskogen in brief 2. Q2 highlights 3. Financial performance 4. Focus – Business Area Industry 5. CAT and KX 6. Key takeaways 7. Q&A 2
Slide 3: Storskogen in brief
Storskogen in brief An international compounder with an infinite ownership agenda and a vision to be the best owner of small and medium-sized companies SEK 36.0bn Investment teams Operational presence in annual RTM net sales1 Operational presence in 35 countries with investment SEK 3.7bn teams in 9
Slide 4: Storskogen in brief
Storskogen in brief An international compounder with an infinite ownership agenda and a vision to be the best owner of small and medium-sized companies SEK 36.0bn Investment teams Operational presence in annual RTM net sales1 ~12,200 employees, an operational presence in 28 countries and management
Slide 5: Storskogen in brief
Storskogen in brief Highly diversified business split across three business areas and 14 verticals Services Trade Industry Peter Ahlgren Christer Hansson Fredrik Bergegård NO. OF BUSINESS UNITS NO. OF BUSINESS UNITS NO. OF BUSINESS UNITS 61 34 37 NO. OF EMPLOYEES NO. OF EMPLOYEES NO. OF EMPLOYEES >5
Slide 6: Overview of financial targets
Overview of financial targets MEDIUM Organic EBITA growth Adjusted Adjusted cash Interest-bearing net - TERM EBITA growth: including EBITA margin conversion on an debt / TARGETS Real GDP acquisitions: (over time): annual basis: adjusted RTM EBITDA: 10% >70% growth + 1-2 In line with percentage point
Slide 7: Agenda
Agenda 1. Storskogen in brief 2. Q2 highlights 3. Financial performance 4. Focus – Business Area Industry 5. CAT and KX 6. Key takeaways 7. Q&A 7
Slide 8: Q2 2022 highlights
Q2 2022 highlights Strong sales growth with a satisfactory EBITA margin Key events NET SALES: ORGANIC NET SALES GROWTH YTD: • A total of 20 acquisitions were completed, of which 10 add-ons, with SEK 9,059m 16% combined net sales of SEK 4,343m and (+137%1) EBITA of SEK 631m • Rollout of Case Assessme
Slide 9: Market development
Market development A quarter with stable development and a reasonable outlook, despite a challenging market environment MACRO TRANSACTION MARKET Fundamentally solid demand in all business High transaction activity in Q2 - projected areas in Q2 decline of dealflow in recession environment Increased p
Slide 10: Services
Services ACQUISITION: SWEDWISE Capitalised on the seasonally strong Q2 A reseller of multiple information management systems and provider of general consulting in information process automation for larger • Solid organic revenue growth of 16 percent YTD corporations and the public sector. Part of Di
Slide 11: Trade
Trade ACQUISITION: SCG Maintained strong sales growth despite a negative impact from component shortage Scandinavian Cosmetics Group (“SCG”) is a leading Scandinavian brand management company within high- end skincare and cosmetics, • Strategic inventory step-up ahead of coming representing more tha
Slide 12: Industry
Industry ACQUISITION: J&D PIERCE Solid demand throughout Q2 resulting in double-digit Market leading structural steelwork organic growth in revenue YTD contractor. Headquarters in Scotland. Part of Industrial Technology. NET SALES JUNE 2022 (LTM): • Good development in volumes, continued efficiency
Slide 13: Portfolio composition
Portfolio composition Diverse portfolio composition provides a strategic platform for further COMMENT growth and resilience in challenging times • Diversified across many sectors VERTICALS’ SHARE OF GROUP NET SALES IN Q2 2022 • Storskogen’s 20 largest business units have an average age of 47 years S
Slide 14: Significant events after the reporting period
Significant events after the reporting period Four additional acquisitions and a pipeline supporting continued growth, somewhat smaller due to Q3 seasonality Acquisitions LOIs and preferred LOIs and preferred completed with a buyer letters with buyer letters with combined annual an annual EBITA of a
Slide 15: Agenda
Agenda 1. Storskogen in brief 2. Q2 highlights 3. Financial performance 4. Focus – Business Area Industry 5. CAT and KX 6. Key takeaways 7. Q&A 15
Slide 16: Key financial performance Q2 2022
Key financial performance Q2 2022 EBITA margin close to last year, reflecting successful price increases and COMMENT underlying strong demand, but also a challenging environment • Less negative effect than in Q1 from lag between COGS and pricing Q2 Q2 LTM Q2 SEKm 2022 2021 Chg., % 2022 RTM 1) • 79%
Slide 17: Net sales and EBITA margin
Net sales and EBITA margin Volume and successful price increases from last quarter are visible in COMMENT revenue growth and margins • Strong sales growth driven by acquisitions, volume and pricing • EBITA margin uplift as price increases materialised and 12,000 11.3% demand remained good 11,000 10.
Slide 18: Illustrative EBITA growth bridge – pro forma
Illustrative EBITA growth bridge – pro forma RTM EBITA of SEK 3.7bn today and additional pipeline of SEK 0.2bn Illustrative; numbers based on latest annual financials 1 Includes acquisitions completed as per 30 June 2022 2 Includes acquisitions after the end of the reporting period and acquisitions
Slide 19: Financial development – Services
Financial development – Services Sequential margin improvements, with variations between verticals COMMENTS • Organic sales growth of 16% (YTD), organic EBITA growth of NET SALES AND ADJ. NET SALES AND ADJ. –13% (YTD) EBITA MARGIN (Q) EBITA MARGIN (LTM) • Good sequential EBITA margin improvement 4,0
Slide 20: Financial development – Trade
Financial development – Trade Significant margin uplift in Q2 COMMENTS • Organic sales growth of 15% (YTD), organic EBITA growth of NET SALES AND ADJ. NET SALES AND ADJ. -9% (YTD) EBITA MARGIN (Q) EBITA MARGIN (LTM) • Strong sequential improvement in EBITA margin 3,500 12.8% 14% 10,000 11.4% 11.6% 1
Slide 21: Financial development – Industry
Financial development – Industry Solid demand across verticals drove organic growth and supported COMMENTS margins • Organic sales growth of 20% (YTD), organic EBITA growth of NET SALES AND ADJ. NET SALES AND ADJ. 19% (YTD) EBITA MARGIN (Q) EBITA MARGIN (LTM) • Strong sequential improvement in EBITA
Slide 22: Operating cash flow and cash conversion
Operating cash flow and cash conversion Higher prices, strong sales and strategically high inventory impacted COMMENTS cash flow in Q2 • Inventory levels remained above normal, also inflated by price increases Operating Cash Flow1 (LTM) • Lower neg effect from receivables and taxes than in 2,000 180
Slide 23: Liquidity bridge
Liquidity bridge Liquidity headroom of SEK 3.8bn in cash and SEK 11.3bn in total available funds 23
Slide 24: Net debt and leverage
Net debt and leverage Leverage increased to 2.5x following 20 closed acquisitions in Q2, COMMENTS within target of 2-3x • Interest-bearing net debt of SEK 12.1bn, excluding earnouts and minority options • Interest-bearing leverage of 2.5x, within target of 2-3x 18,000 4 16,000 3.5 3 14,000 2.5 2.5 1
Slide 25: Agenda
Agenda 1. Storskogen in brief 2. Q2 highlights 3. Financial performance 4. Focus – Business Area Industry 5. CAT and KX 6. Key takeaways 7. Q&A 25
Slide 26: Fredrik Bergegård, EVP and Head of Industry
Fredrik Bergegård, EVP and Head of Industry 26
Slide 27: Business Area Industry's growth
Business Area Industry’s growth Business Area Industry continues its strong growth, both organically and through acquisitions Historical performance1 Organic growth2 mSEK 10,000 14% 60% 53% 12% 50% 8,000 10% 40% 6,000 8% CAGR 30% 100% 6% 4,000 20% 4% 19% 2,000 10% 2% 0 0% 0% 2018 2019 2020 2021 2022
Slide 28: Agenda
Agenda 1. Storskogen in brief 2. Q2 highlights 3. Financial performance 4. Focus – Business Area Industry 5. CAT and KX 6. Key takeaways 7. Q&A 28
Slide 29: Case Assessment Tool and Prioritisation
Case Assessment Tool and Prioritisation The Case Assessment Tool provides a toolbox capturing key lessons from more than a decade of acquisitions, enabling scalability and consistency in evaluating, pricing and prioritising acquisitions. Targeted achievements Case Assessment Tool Market uncertaintie
Slide 30: Storskogen Knowledge Exchange
Storskogen Knowledge Exchange An initiative to foster and promote knowledge sharing within the group. KX currently consists of six domains headed by a domain lead from HQ. The collective knowledge is stored on the KX platform. KX domains Domain, e.g., pricing Domain-lead Pricing KX-platform HR eXper
Slide 31: Agenda
Agenda 1. Storskogen in brief 2. Q2 highlights 3. Financial performance 4. Focus – Business Area Industry 5. CAT and KX 6. Key takeaways 7. Q&A 31
Slide 32: Key takeaways
Key takeaways A solid quarter driven by strong demand and operational performance, but with a complex macro outlook Strong demand Complex macro environment Strategically exciting acquisitions completed Strong operational performance by BU management Resulting in solid quarter 32
Slide 33: Agenda
Agenda 1. Storskogen in brief 2. Q2 highlights 3. Financial performance 4. Focus – Business Area Industry 5. CAT and KX 6. Key takeaways 7. Q&A 33
Slide 34: Q&A
Q&A TODAY’S PRESENTERS Daniel Kaplan Lena Glader CEO and co-founder CFO 34