Storskogen Group Ab Class B · OMXSTO:STOR_B
Storskogen Group Ab Class B — Q2 2024 Earnings Presentation
27 slides from Storskogen Group Ab Class B's earnings presentation, Aug 15, 2024
Slide 1: Storskogen Q2 2024
Storskogen Q2 2024 TODAY’S PRESENTERS Christer Hansson Lena Glader CEO CFO August 2024 1
Slide 2: Storskogen in brief
Storskogen in brief Storskogen is an international group of businesses with LTM net sales of SEK 34.9bn and adj. EBITA of SEK 3.0bn, split across three business areas consisting of business units averaging SEK ~280m in sales Services Trade Industry NO. OF BUSINESS UNITS1 NO. OF BUSINESS UNITS1 NO. O
Slide 3: Highlights
Highlights Sales and EBITA improved in seasonally stronger quarter KEY EVENTS NET SALES, Q2: ORGANIC NET SALES GROWTH, YTD: • LTM adj. cash conversion ahead of target at 101% (87) SEK 9,243m -2% (-2%1) (-2%2) • Interest-bearing net debt/RTM adj. EBITDA at 2.7x • Organic sales and EBITA growth improv
Slide 4: Net sales and EBITA margin
Net sales and EBITA margin Sales and EBITA margin in line with expectations in seasonally stronger Q2 Financial development COMMENT 10,000 11% • Sales in line with expectations 9,000 10% in seasonally stronger Q2 8,000 9.7% 9.6% 9.7% 9.7% 9% 9.4% 9.2% 8% • Divestments (-5%), 8.7% 7,000 8.4% organic
Slide 5: Services
Services Y/Y margin improvement in seasonally stronger quarter NET SALES, Q2: ORGANIC NET SALES GROWTH, YTD: COMMENTS SEK 2,844m 0% • Sales affected by divestments (-11%), offset by organic growth, acquisitions and FX (+4%) (-7%1) (0%2) • Operational efficiency measures yielding early positive effec
Slide 6: Trade
Trade Y/Y margin improvement in seasonally stronger quarter NET SALES, Q2: ORGANIC NET SALES GROWTH, YTD COMMENTS SEK 2,510m -2% • Sales affected by divestments (-5%), offset by organic growth, acquisitions and FX (+3%) (-2%1) (-3%2) • Operational efficiency measures yielding early positive effects
Slide 7: Industry
Industry Sales and EBITA largely in line with last year NET SALES, Q2: ORGANIC NET SALES GROWTH, YTD COMMENTS SEK 3,905m -4% • Sales in line with expectations (2%1) (-1%2) • EBITA margin continued to improve sequentially • Demand in the quarter remained muted for companies exposed to construction an
Slide 8: Short-term priorities remain
Short-term priorities remain We remain focused on our priorities, 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 EBITA
Slide 9: Achieving organic growth
Achieving organic growth A number of both defensive and offensive initiatives for improvement today, and for when market demand returns Sales Pricing Investments Cost control Increase sales volume Protect margins Improve scalability Protect margins Gain market shares Strengthen profitability Enhance
Slide 10: Strategic divestment
Strategic divestment Significant positive impact from divesting nine long-term low performers1 Jan 2024-Jun 2024 Jul 2023-Jun 2024 Storskogen, Divested Storskogen, excl. Storskogen, Divested Storskogen, excl. reported entities divested entities reported entities divested entities Net sales, SEKm 17,
Slide 11: Financial update
Storskogen Q2 2024 Financial update 11
Slide 12: Financial summary, adjusted for IAC
Financial summary, adjusted for IAC Operationally in line with last year, growth in profit SEKm Q2 24 Q2 23 Chg., % LTM COMMENTS Net sales 9,243 9,462 -2 36,006 • Q2 net sales decreased 2%, whereof C.O.G.S -7,295 -7,497 -3 -28,690 divestments (-5%), organic growth (+2%) and acquisitions/FX (+1%) Gro
Slide 13: Financial summary, reported
Financial summary, reported Significant impact from IAC in connection with divestment1 SEKm Q2 24 Q2 23 Chg., % LTM COMMENTS Net sales 9,243 9,462 -2 36,006 • Items affecting comparability (IAC): C.O.G.S -7,996 -7,497 7 -28,690 • Affecting EBITA: SEK -227m (-101) Gross profit 1,247 1,965 -37 7,316 S
Slide 14: Q2 sales bridge
Q2 sales bridge Organic growth recovering, while negative Y/Y change was explained by divestments SEKm -2% 9,462 2% -5% 9,243 1% 0% Net sales, Q2 23 Organic growth Divestments Acquisitions FX Net sales, Q2 24 14
Slide 15: Q2 bridges by business area
Q2 bridges by business area Divestments affected sales and EBITA but organic growth improved Net sales, SEKm Adj. EBITA, SEKm -2% 9,462 -2% 9,243 -1% 1% -3% 922 -2% 0% 0% -1% 894 ∆ from acq. /div. ∆ from acq. /div. Group -4% Group -2% Services -3% Services -1% Trade -1% Trade -1% Net sales, Q2 23 Se
Slide 16: Condensed cash flow
Condensed cash flow Cash flow continues to be solid after NWC progress in 2023 SEKm Q2 24 Q2 23 Chg., % LTM COMMENTS Profit before tax -542 248 n/a 91 • Cash flow from operating activities of SEK 855m, in line with last year Adjustment for non-cash items 1,533 631 >100 3,050 Income tax paid -190 -25
Slide 17: Operating cash flow and cash conversion
Operating cash flow and cash conversion Cash flow solid and LTM cash conversion well ahead of target Operating cash flow1 (LTM) 5,000 140% 4,500 120% 4,000 104% 104% 101% 95% 100% 3,500 87% 3,000 71% 80% 2,500 59% 50% 60% 2,000 1,500 32% 40% 1,000 20% 500 1,051 1,794 2,397 3,174 3,929 4,281 4,481 4,
Slide 18: Condensed balance sheet
Condensed balance sheet Debt significantly reduced Y/Y SEKm Jun 24 Jun 23 Chg., % Dec 23 COMMENTS Total non-current assets 29,627 31,493 -6 30,597 Total current assets 14,632 15,817 -7 13,572 • Balance sheet 6% lighter at SEK 44bn Total assets 44,304 47,309 -6 44,169 • Divestments Total equity 19,85
Slide 19: Total debt and leverage
Total debt and leverage Strong cash flows have enabled significant debt reduction, gross and net COMMENTS Gross debt/Cash & cash equivalents, SEKm RTM adj. EBITDA, SEKm • Continued focus on capital efficiency and cash flow during the quarter 20,000 5,500 • Interest-bearing net debt (change) 2,988 2,
Slide 20: Key takeaways
Key takeaways Important strategic progress and continued operational focus as we enter H2 2024 Strategic divestment improve profitability and potential for profitable growth Operational initiatives yielding positive effects as we enter the second half of 2024 Continued focus on organic EBITA growth
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) reversed in both 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% 10,000 8%
Slide 24: Organic sales growth
Organic sales growth Negative organic sales trend recovering across all three business areas Organic growth (QTD1) 30% 25% 24% 20% 20% 15% 17% 17% 16% 10% 11% 5% 6% 4% 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 1 Co
Slide 25: Cash flow bridge, Q2
Cash flow bridge, Q2 Cash flow after leasing and capex continues to be solid LTM, SEKm 3,007 576 527 2,431 18 171 583 628 1,879 625 1,711 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 c
Slide 26: Net debt and leverage
Net debt and leverage Net debt and leverage ratio improvement vs seasonally softer first 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 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 11,706 10,902
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):