Slide 1: Presentation Interim Report Jan-Sep 2015
PRESENTATION INTERIM REPORT JAN-SEP 2015 NOVEMBER 4, 2015
Slide 2: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 22 4 Systems & Solutions 26 5 Group overview 30 2
Slide 3: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 22 4 Systems Solutions 26 5 Group overview 30 3
Slide 4: Management and Chairman
MANAGEMENT AND CHAIRMAN Fredrik Karlsson Per Waldemarson Therése Hoffman Carl Bennet CEO President Dental CFO Chairman Born: 1962 Born: 1977 Born: 1971 Born: 1951 Education Education Education Other assignments • MSc in Engineering Physics • MSc in Business • International Marketing • Chairman and m
Slide 5: Organised in three business areas
ORGANISED IN THREE BUSINESS AREAS Sales LTM: 7,681 MSEK EBITA LTM: 1,137 MSEK Dental Demolition & Tools Systems Solutions Leading distributors of dental products in Leading producers of demolition robots and Wide range of leading systems solutions Nordics and Germany attachments for excavators and c
Slide 6: Lifco develops leading niche companies
LIFCO DEVELOPS LEADING NICHE COMPANIES Dental Demolition & Tools Systems Solutions COMPANIES1) COUNTRIES1) EMPLOYEES1) 3 MANAGEMENT LAYERS 118 28 3,372 6 1) 2015-09-30
Slide 7: Lifco's philosophy for value creation
LIFCO’S PHILOSOPHY FOR VALUE CREATION Long-term perspective • Long-term perspective on corporate development Focus on profitability • Good profitability is a prerequisite for sustainable growth • Our subsidiaries have a high degree of independence. That is the foundation for the Decentralized organi
Slide 8: One target: to increase profits every year
ONE TARGET: TO INCREASE PROFITS EVERY YEAR EBITA (MSEK) Pro forma 2014 2015 LTM 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Dental Demolition & Tools Systems Solutions Note: IFRS accounting since 2012, prior years Swedish GAAP. Pro forma includes acquire
Slide 9: While maintaining focus on capital employed
…WHILE MAINTAINING FOCUS ON CAPITAL EMPLOYED EBITA margin ROCE (excl. goodwill and other intang. assets) 14.8% 14.2% 117.8% 105.4% 11.5% 73.0% 2015 LTM 2015 LTM 17.4% 18.8% 19.3% 2013 2014 2015 2013 2014 2015 ROCE (incl. goodwill and x.x% other intangible assets) 9
Slide 10: Actions to create sustainable profit growth
ACTIONS TO CREATE SUSTAINABLE PROFIT GROWTH Right person in the right position • Motivated managers who deliver results Continuous pricing optimization • Focus on customers with potential for sustainable profit growth Optimized management • Focus on value adding personnel and minimized bureaucracy s
Slide 11: Examples of value creation
EXAMPLES OF VALUE CREATION Dental1 - EBIT (SEKm) and organic EBIT growth Brokk2 - EBIT (SEKm) and organic EBIT growth CAGR CAGR 11% 8% CAGR 169 CAGR 11% 32% 118 71 79 31 14 1997 2006 2013 2000 2006 2013 EBIT EBIT 5% 12% 18% 10% 27% 33% margin margin 1) Companies included: Nordenta, DAB Dental, Dansk
Slide 12: Geographic footprint
GEOGRAPHIC FOOTPRINT Dental Sweden 23% Germany 24% North RoE America 42% Demolition & Tools 4% Asia & Australia 7% RoW 1% Systems Solutions 12 Note: Geographic split per 2014
Slide 13: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 22 4 Systems Solutions 26 5 Group overview 30 13
Slide 14: Dental
DENTAL Sales split by product category PF LTM Sep 2014 PF EBITA and % of total EBITA1 PF LTM Sep 2014 Prosthetics Other Other SEK 570m Distribution 56% 54% Prosthetics 4% 18% Equipment 13% Sales split by geography 2013 and service 65% RoW Sweden Consumables 13% 20% 34% Germany 33% Equipment RoN Cons
Slide 15: Distributor of broad range of products
DISTRIBUTOR OF BROAD RANGE OF PRODUCTS Example of products delivered by Lifco subsidiaries Software Dentist chair Impression material Filling material X-ray Disposable masks Disposable mugs Dentist work chair Prosthetics Disposable gloves Hand held instruments 15
Slide 16: Strong foothold on key markets
STRONG FOOTHOLD ON KEY MARKETS Lifco’s dental market presence and example of brands used in different markets Lifco’s market positions within dental consumables Sweden Norway Denmark Finland Germany RoE Distribution of consumables FI Distribution of equipment Nordics: #1-2 NO S
Slide 17: Attractive position in the value chain
ATTRACTIVE POSITION IN THE VALUE CHAIN Supplier Dentist • Fragmented – large number • Stable growth of suppliers used by each dentist • Highly fragmented • Sound profitability • Dependent on public financing • Slow adoption of technical advances • Sound profitability 500+ 40,000+ • Lifco has a stron
Slide 18: Steady and stable market growth
STEADY AND STABLE MARKET GROWTH Expenditures on dental care1 European market overview 350 = Size equals total expenditure on dental care 30 25 300 Expenditure on dental care per capita (USD) 20 USDbn 15 CH 250 DE 10 NO 5 DK SE 0 200 2007 2008 2009 2010 2011 2012 AT European dental product sales2 FR
Slide 19: Dental financial overview
DENTAL FINANCIAL OVERVIEW Sales (MSEK) development EBITA (MSEK) and EBITA margin (%) development 3 431 3 362 599 600 575 24% 2 840 2 826 500 20% 2 439 17.5% 399 17.1% 400 376 16% 15.1% 14.1% 1 663 1 674 312 13.2% 12.8% 1 435 300 11.4% 11.6% 12% 253 Pro forma 2014 Pro forma 2014 10.9% Pro forma 2014
Slide 20: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 22 4 Systems Solutions 26 5 Group overview 30 20
Slide 21: Demolition & Tools
DEMOLITION & TOOLS Sales split by business division PF LTM Sep 2014 EBITA and % of total EBITA1 PF LTM Sep 2014 Demolition machines 25% 26% SEK 264m Attachments for Demolition excavators and 51% 49% machines cranes Sales split by geography 2013 Sweden 9% Germany RoW 36% 18% Attachments for excavator
Slide 22: Strong position in global niche markets
STRONG POSITION IN GLOBAL NICHE MARKETS Demolition machines Share of sales 49% Operations Development, assembly and marketing of remote controlled demolition robots. Assembly in Sweden Geographical focus Global Customer market Mainly construction industry (cramped and hazardous renovation) and other
Slide 23: Demolition & Tools financial overview
DEMOLITION & TOOLS FINANCIAL OVERVIEW Sales (MSEK) development EBITA (MSEK) and EBITA margin (%) development 400 29,7% 30% 365 350 24,9% 25% 24,4% 300 22,8% 288 22,3% 1 493 268 20,7% 20% 19,6% 246 1 289 250 17,9% 1 176 1 189 194 1 039 15,4% 992 200 185 15% 862 160 2015 LTM 2015 LTM 155 743 736 150 1
Slide 24: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 22 4 Systems & Solutions 26 5 Group overview 30 24
Slide 25: Systems Solutions
SYSTEMS SOLUTIONS Sales split by business division PF LTM Sep 2014 EBITA and % of total EBITA1 PF LTM Sep 2014 Environ- Contract mental manufacturing technology 20% 18% Environmental SEK 213m technology Contract 15% manufacturing Relining of 29% plumbing Relining of pipes plumbing 14% pipes Sales sp
Slide 26: Leading companies within specific niches
LEADING COMPANIES WITHIN SPECIFIC NICHES Contract manufacturing Relining Interiors for vehicles Sawmill equipment Environmental technology Share of sales 29% 14% 17% 25% 15% Operations Contract Replacement of runoff Interior modules for Equipment for Equipment for manufacturing o
Slide 27: Systems Solutions financial overview
SYSTEMS SOLUTIONS FINANCIAL OVERVIEW Sales (MSEK) development EBITA (MSEK) and EBITA margin (%) development 300 15,0% 2 757 258 2 428 250 12,5% 2 276 2 247 227 2 168 211 2 055 2 014 1 869 200 190 10,0% 1 747 9.3% 9.4% 9.4% 162 8.7% 155 8.3% 1 366 150 7.7% 7.5% 136 7,5% 6.3% 115 106 2015 LTM 5.7% 201
Slide 28: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 22 4 Systems Solutions 26 5 Group overview 30 28
Slide 29: Lifco Group financial overview
LIFCO GROUP FINANCIAL OVERVIEW Sales (MSEK) development EBITA (MSEK) and EBITA margin (%) development 7 681 1 200 1 137 24% 6 898 6 184 998 6 030 1 000 20% 5 707 4 901 4 591 800 16% 715 692 14.5% 14.8% 4 146 631 3 660 600 12% 11.3% 511 11.6% 11.5% 10.6% 11.1% 11.1% 453 Pro forma 2014 2 629 Pro forma
Slide 30: Strong cash flow generation
STRONG CASH FLOW GENERATION Core net working capital1 Capex and depreciation2 Operating pre-tax cash flow 1 489 827 105 1 249 95 710 679 1 116 75 19.4% 65 67 18.5% 60 18.4% 99.3% 98.1% 85.6% 1.6% 1.5% 1.2% 1.1% 1.0% 1.0% 2013 2014 2015 2012 2013 2014 2012 2013 2014 Capex (SEKm) Capex (SEKm) Deprecia
Slide 31: Overview of acquisitions
OVERVIEW OF ACQUISITIONS Year Company Description Type Country Sales at acquisition Segment split - # of acquisitions Darda Producer of attachments for demolition robots Demolition & Tools Germany EUR 8m 2006 Dental Prime Distributor of dental equipment and services Dental Finland EUR 3m Elektronikp
Slide 32: Financial targets
FINANCIAL TARGETS • Organic growth in EBITA in excess of GDP growth in relevant geographies Growth in EBITA • Acquisitions to add additional growth EBITA/Capital • More than 50% employed1 Net debt/EBITDA • Normally in the range 2-3x Dividend policy • Distribute 30-50% of net profit as % of net profi
Slide 33: Key considerations
KEY CONSIDERATIONS Wide diversification with regards to customers, geography, products and suppliers. Strong market positions in the Nordic markets in the Dental segment (top 2-3) and Demolition & Tools segment (global #1) Diversification and cash flow focus support low cyclicality, the Dental
Slide 34: Financials 2014, Q3 and Jan-Sep 2015
FINANCIALS 2014, Q3 AND JAN-SEP 2015 GROUP FY FY Q3 Q3 Jan-Sep Jan-Sep 2014 2013 Change 2015 2014 Change 2015 2014 Change Net sales, MSEK 6,802 6,030 12.8% 1,910 1,653 15.5% 5,780 4,901 17.9% EBITA, MSEK 966 692 39.6% 280 227 23.5% 863 692 24.7% EBITA margin 14.2% 11.5% 2.7 14.7% 13.7% 1.0 14.9% 14.
Slide 35: Lifco Group balance sheet
LIFCO GROUP BALANCE SHEET Comments Balance sheet MSEK 2013 2014 Sep 30, 2015 • Two non-secured MTN loans totalling MSEK Intangible fixed assets 3,047 4,677 5,050 1,050 Tangible fixed assets 342 386 423 Financial assets 46 54 60 • Transaction April 1 Inventory 758 823 998 Accounts receivable 671 770
Slide 36: Disclaimer
DISCLAIMER Important information This material (the “Material”) has been prepared by Lifco AB (publ) (“Lifco”) in good faith and for information purposes only. Unless otherwise stated, Lifco is the source of all data contained in the Material. All data contained herein is provided as of the date of
Slide 37: Lifco
LIFCO