Slide 1: Year-End Report Q4 2017
YEAR-END REPORT Q4 2017 January 25, 2018 Mattias Ankarberg and Pernilla Walfridsson
Slide 2: Highlights (1/2)
HIGHLIGHTS (1/2) Execution of the new strategy continues according to plan ─ Byggmax segment furthest in execution, strategic initiatives contribute positively to strong profitability improvement in 2017 (adjusted EBITDA margin +0.7%-points) ─ Skånska Byggvaror in middle of transformation, cost base
Slide 3: Highlights (2/2)
HIGHLIGHTS (2/2) Underlying Byggmax business developed positively in the quarter ─ Comparable business (excluding new stores, measured in local currency) increased sales and continued to take market share ─ Increased profitability driven by both increased gross margins and lower cost share ─ New sto
Slide 4: Summary Q4 2017
SUMMARY Q4 2017 ─ Net sales decreased 2.5 % for the fourth quarter (+2.0 Mkr Q4 2017 Q4 2016 Diff.% 2017 % YTD), affected by currency effects, decisions to reduce less profitable sales in SKBV and a soft market Net Sales 950.2 974.9 -2.5 5,321.4 ─ Gross margin was 31.1 %, an increase by 1.3 pp Gross
Slide 5: Byggmax
BYGGMAX ─ Sales decreased slightly in Q4 (increase 4% YTD). Mkr Q4 2017 Q4 2016 Diff.% ─ Sales increased (in local currency) despite a soft Nordic consumer market for building materials. In Net Sales 804.9 805.3 0.0 addition, four stores in Finland were closed in the quarter and e-commerce was focus
Slide 6: Byggmax 2017
BYGGMAX 2017 Strong profitability improvement, positively impacted by strategic plan ─ Byggmax segment EBITDA margin excluding restructuring costs for FY 2017 increase +0.7pp to 10.4% ─ Byggmax segment profitability highest in over 5 years (i.e., 2017 adjusted EBITDA margin also above levels when By
Slide 7: Skånska Byggvaror
SKÅNSKA BYGGVAROR Mkr Q4 2017 Q4 2016 Diff.% ─ Sales decreased by 19.3 (decrease 10.8 YTD) %. Net Sales 117.4 145.4 -19.3 ─ Sales development was negatively EBITDA -37.5 -4.4 -752.7 impacted by strong comparable figures (aggressive pricing in same period last EBITDA, adjusted -5.2 -4.4 -18.6 year) a
Slide 8: Skånska Byggvaror moves towards "Garden Living"
SKÅNSKA BYGGVAROR MOVES TOWARDS “GARDEN LIVING” Moves towards a modern leader within “Garden Living” and restructures cost based in Q4 ─ Focus on the profitable core of conservatories, green houses and related garden accessories ─ Strengthen digital competence ─ Decrease operational cost. Restructur
Slide 9: Store Openings
STORE OPENINGS Following stores were opened in 2017: Skånska Sweden Norway Finland Byggmax: Byggvaror ‒ Veddesta, Stockholm, Sweden (Q2) New stores Q4 2017 1 2 0 0 ‒ Östhammar, Sweden (Q2) ‒ Bryne, Norway (Q2) New stores in 2017 6 3 0 3 ‒ Söderham, Sweden (Q3) ‒ Mariannelund, Sweden (Q3) Closed stor
Slide 10: Store Openings
STORE OPENINGS - Ålesund, Norway Nov 24 - Skene, Sweden Dec 1 - Eidsvoll, Norway Dec 15 10
Slide 11: Market Development
MARKET DEVELOPMENT ‒ The Nordic consumer market for building materials was soft during the fourth quarter, negatively impacted by early arrival of autumn weather o The Swedish building supplies market increased 6.3 percent during October and November (according to DHI) but, according to industry bod
Slide 12: New Strategy Launched in June 2017
NEW STRATEGY LAUNCHED IN JUNE 2017 Focused growth ‒ Based on our strengths ‒ More ambitious financial goals ‒ Potential to reach new financial Simple & efficient operating model goals by 2019 12
Slide 13: Accomplished 2017
ACCOMPLISHED 2017 ‒ Closed and paused non-core Byggmax activities such as Design Your Living, B2B sales, Byggmax+ and Proffsbyggt ‒ Closed 4 loss-making Byggmax stores in Finland ‒ Turned Byggmax e-commerce into profitability ‒ Positive indications for new growth initiatives: a smaller Byggmax forma
Slide 14: Focus 2018
FOCUS 2018 Increasingly shift focus towards growth ‒ Open 20 new Byggmax stores, doubling historical expansion pace ‒ Focus Byggmax e-commerce on growth, now at good profitability ‒ Expand the Byggmax Garden concept to ca 10 more stores Transformation year – towards a modern leader in “Garden living
Slide 15: Financial Overview
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Slide 16: Result Development
RESULT DEVELOPMENT Mkr Q4 2017 Q4 2016 Diff.% 2017 Net Sales 950.2 974.9 -2.5 5,321.4 Growth comparable stores (%) -1.9 -9.1 7.2 -0.1 Gross Margin (%) 31.1 29.8 1.3 31.0 EBITDA, adjusted 22.1 30.9 -28.5 474.8 EBITDA margin (%), adjusted 2.3 3.2 -0.9 8.9 EBIT, adjusted -17.9 -8.1 -122.5 318.9 EBIT ma
Slide 17: Result Development FY 2017
RESULT DEVELOPMENT FY 2017 Mkr 2017 FY 2016 FY Diff.% ‒ Profitability measured as EBITDA margin adjusted decreased by 0.1 pp Net Sales 5,321.4 5,219.3 2.0 compared with the preceding year. Byggmax 4,491.1 4,318.1 4.0 ‒ For Byggmax, EBITDA margin excluding non-recurring costs Skånska Byggvaror 709.2
Slide 18: Overview of Non-Recurring Costs
OVERVIEW OF NON-RECURRING COSTS ‒ Earnings for the quarter was Effect of non-recurring items 2017 Q4 2016 Q4 2017 FY 2016 FY significantly impacted by non recurring costs. ‒ This is mainly related to restructuring of Earn out Buildor 2017 0.0 0.0 33.4 0.0 Skånska Byggvaror (SEK 49.4 million, of whic
Slide 19: Sales Development
SALES DEVELOPMENT Growth percent Q4 2017 Q4 2016 ‒ Sales in the fourth quarter decreased by 2.5 percent year-on-year. Comparable stores, local currency -1.9 -9.1 ‒ Net sales for comparable stores was Non-comparable stores and Other 0.6 23.4* down 1.9 percent (decrease 9.1) in local currency for the
Slide 20: Gross Margin
GROSS MARGIN ‒ The gross margin was 31.1 percent (29.8), an increase by 1.3 pp compared to previous year. The gross margin increase despite significant negative impact of the weaker NOK. ‒ Byggmax segment: Gross margin increased during the quarter. The gross margin was positively affected by purchas
Slide 21: Operating Expenses
OPERATING EXPENSES ‒ Personnel costs and other external expenses rose a total of SEK 34.2 M. Adjusted for closure cost Finland and restructuring Skånska Byggvaror the expenses rose 10.4 MSEK. ‒ The increase in expenses compared with the year-earlier period was also affected by costs associated with
Slide 22: Net Financial Items
NET FINANCIAL ITEMS ‒ Net financial items decreased by SEK Q4 2017 Q4 2016 Diff.% 2017 0.4 M. Net financial items -3.2 -2.8 -14.3 13.6 ‒ Byggmax has signed a new three-year agreement with Svenska Handelsbanken. The agreement implies an increase of the credit with SEK 150 M and slightly improved term
Slide 23: Cash Flow
CASH FLOW ‒ Cash flow from operating activities for the fourth quarter decrease by SEK 11.4 M. ‒ The cash flow 2016 was impacted by the acquisition of Skånska Byggvaror Group. 23
Slide 24: The Board of Directors Proposes a Dividend of SEK 2.5 per Share
THE BOARD OF DIRECTORS PROPOSES A DIVIDEND OF SEK 2.5 PER SHARE The Board of Directors proposes a dividend of SEK 2.5 (2.4) per share Byggmax’s dividend policy is to distribute at least 50 percent of net profits for the year. 24
Slide 25: Outlook and Summary
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Slide 26: Outlook
OUTLOOK ‒ Expect normal development of modest positive growth in the Swedish market during winter and spring. Finnish market shows signs of returning to modest growth. Uncertainty remains in the Norwegian market ‒ Byggmax segment focus for 2018 increasingly shifts towards growth ‒ Skånska Byggvaror
Slide 27: Summary
SUMMARY Implementation of new strategic plan on track Underlying Byggmax business developed positively in the quarter Skånska Byggvaror restructures cost base and moves towards modern leader in ”garden living” 27
Slide 28: Skånska Byggvaror
SKÅNSKA BYGGVAROR Update, Jan 25, 2018
Slide 29: Summary of Way Forward
SUMMARY OF WAY FORWARD ─ Skånska Byggvaror moves towards a modern leader within “Garden Living” o Focus on core categories of conservatories, green houses and related garden accessories o Strengthen digital competence o Decrease operational cost ─ Restructuring of cost base in Q4 2017 o Impacts Bygg
Slide 30: Strong Potential in Core Business
STRONG POTENTIAL IN CORE BUSINESS Current situation ─ Leading Nordic e-commerce company with a strong and profitable business within its core categories of garden related buildings ─ Last few years’ efforts to broaden the business have been coupled with increased complexity, higher costs, and less f
Slide 31: Actions: Moving Toward a Modern Leader in "Garden Living"
ACTIONS MOVING TOWARD A MODERN LEADER IN “GARDEN LIVING” CORE PRODUCTS NON-CORE PRODUCTS E-COM CAPABILITIES ─ Focus on core categories within ─ Reduce sales of less profitable ─ Investments to build best in class “Garden Living”, incl. accessories non-core products e-commerce capabilities, refining
Slide 32: Actions: Restructuring to Reduce Operational Costs
ACTIONS RESTRUCTURING TO REDUCE OPERATIONAL COSTS Actions ─ Reorganization to a smaller head office organization ─ Increased store efficiency trough reduced assortment display and staffing ─ Remodeling of the Danish Pavillon business ─ Consolidation of logistic sites: closing Klippan and Ängelholm1,
Slide 33: Outlook: Transformation Year 2018
OUTLOOK TRANSFORMATION YEAR 2018 Focus on developing core categories, strengthen digital competence, and reduce operational cost Expect transformation year 2018: ─ Decreased operational costs, with some impact in 2018 and full impact in 2019 ─ Decreased revenues due to reduced marketing of less prof