Slide 1: Q2 2017
Q2 2017 MÅRTEN ANDERSSON, CEO MATTIAS BJÖRK, CFO AUGUST 17, 2017
Slide 2: Financial development in Q2 2017
FINANCIAL DEVELOPMENT IN Q2 2017. Net sales EBITA SEK 872m SEK 99m (927) (117) Operating cash flow Q2 SEK 89m (132) 2
Slide 3: A weak quarter with two successful acquisitions
A WEAK QUARTER WITH TWO SUCCESSFUL ACQUISITIONS. • Compared to a strong Q2 in 2016, earnings were down, mainly due to short-term variations in the Industry Business Area • Corroventa’s rental business was negatively impacted by the absence of floods in Europe. The major part of Tornum’s project deli
Slide 4: Financial development LTM Q2 2017
FINANCIAL DEVELOPMENT LTM Q2 2017. Net sales EBITA1 SEK 3,234m SEK 302m (3,206 FY2016) (318 FY2016) Operating Organic LTM cash flow2 EBITA SEK growth 274m 3% (344 FY2016) 1) EBITA negatively affected by one-off items of SEK 24.7m (33.8m) 2) Operating cash flow negatively affected by payment of one-o
Slide 5: Continued growth in Consumer but weak development in Industry and Trading
CONTINUED GROWTH IN CONSUMER BUT WEAK DEVELOPMENT IN INDUSTRY AND TRADING. TRADING CONSUMER INDUSTRY +2.1% +0.4% -25.4% Net sales growth 419 428 253 253 255 Q2 2017 190 Q2 2016 Q2 2017 Q2 2016 Q2 2017 Q2 2016 Q2 2017 -10.7% +11.2% -50.4%1 EBITA growth Q2 2017 48 43 42 46 48 24 Q2 2016 Q2 2017 Q2 201
Slide 6: A robust business model
A ROBUST BUSINESS MODEL. …is used for Strong operating acquisitions of …at reasonable ...and with a long- cash flow from additional valuation term approach to the business companies with multiples... value creation units… strong cash flows... ACQUIRED EBITA OPERATING CASH FLOW ACQUISITION MULTIPLES
Slide 7: Rather turn down a good deal than risk making a bad one
”Rather turn down a good deal than risk making a bad one.” PATRIK WAHLÉN 7
Slide 8: Akademibokhandeln – a typical Volati acquisition
AKADEMIBOKHANDELN – A TYPICAL VOLATI ACQUISITION. ACQUISITION IN BRIEF AKADEMIBOKHANDELN AND BOKUS • Acquired 95% of the shares – • Sweden’s leading book retailer – 37% total Akademibokhandeln’s management acquired market share 5% of the shares • The only successful omni-channel player • The purchas
Slide 9: Tornum acquired Silokonsult AB
TORNUM ACQUIRED SILOKONSULT AB. ACQUISITION IN BRIEF SILOKONSULT GÖRAN PERSSON AB • Tornum acquired 100% of the shares • Swedish supplier of machinery and planning for the grain and milling industries • Total consideration of SEK 31.5m, including an estimated net cash position of approx. • Will stre
Slide 10: Well-positioned for additional acquisitions
WELL-POSITIONED FOR ADDITIONAL ACQUISITIONS. Well-defined acquisition model and process Ability to manage complex transactions Evaluated ~80 companies, year to date Large acquisition capacity, SEK 206m net cash Ventilatorverken Agro 2008 2007 Väderstad 2004 2005 2006 Ukraina 10
Slide 11: Strong financial position for continued growth through acquisitions
STRONG FINANCIAL POSITION FOR CONTINUED GROWTH THROUGH ACQUISITIONS. RETURN ON EQUITY SALES AND EBITA NET DEBT/(CASH) % SEKm SEKm 2.79 110% 3 206 3 234 2.39 2.27 28% 762 756 2 188 483 1 656 1 509 43% 44% 32% 25% (265) (206) 11% 326 215 3521 3271 227 1371 2191 318 302 (0.52) (0.63) 2013 2014 2015 201
Slide 12: Long-term development supports financial targets
LONG-TERM DEVELOPMENT SUPPORTS FINANCIAL TARGETS. METRIC TARGET PERFORMANCE >2.2x SEK 700m Reach an adjusted EBITA of SEK 700m 137 302 9% EBITA growth at end of 2019 – annual organic EBITA (by 2019) growth of 5% on average Average organic EBITA 2013 2017 LTM growth 2013 – Q2 2017 93% 106% 89% 1) 83%
Slide 13: A growing Swedish industrial group
A growing Swedish industrial group
Slide 14: Appendix
APPENDIX. 14
Slide 15: Business Area Trading – operational synergies through shared service centre
BUSINESS AREA TRADING – OPERATIONAL SYNERGIES THROUGH SHARED SERVICE CENTRE. An operational business area • Operating some 15 companies in 6 countries • Organised in 6 business units Iceland Integrated business model • Focused on three market segments: – Construction consumables and hardware (primar
Slide 16: Business Area Consumer – attractive niches
BUSINESS AREA CONSUMER – ATTRACTIVE NICHES. A strategic business area • Operating some 9 companies in 5 countries • Organised in 3 business units Strong local entrepreneurship • Business units focused on B2C niches • Strong local entrepreneurship combined with collaboration in selected areas such as
Slide 17: Business Area Industry – successful expansion
BUSINESS AREA INDUSTRY – SUCCESSFUL EXPANSION. A strategic business area • Operating some 20 companies in 14 countries • Organised in 3 business units Thailand Strong local entrepreneurship • Business units focused on B2B niches • Strong local entrepreneurship combined with collaboration in selected
Slide 18: Income statement
INCOME STATEMENT. SEKm 2013 2014 2015 2016 LTM Net sales 1,509 1,656 2,188 3,207 3,234 Raw materials and supplies -549 -547 -933 -1,526 -1,518 Other external costs -274 -347 -413 -516 -529 Personnel costs -518 -513 -582 -771 -806 Other income 3 3 18 4 2 Other operating costs -2 -2 -3 -12 -12 Realise
Slide 19: Balance sheet
BALANCE SHEET. SEKm 31 Dec '13 31 Dec '14 31 Dec '15 31 Dec '16 30 Jun ‘17 Intangible fixed assets 860 1,160 1,689 1,840 1,807 Tangible fixed assets 141 138 180 191 180 Financial fixed assets 8 8 13 8 8 Other non-current marketable securities 4 4 7 - - Deferred tax assets 16 21 33 42 42 Total non-cu
Slide 20: Net debt and working capital
NET DEBT AND WORKING CAPITAL. SEKm 31 Dec '13 31 Dec '14 31 Dec '15 31 Dec '16 30 Jun’17 Net debt Cash and cash equivalents -157 -156 -200 -371 -332 Pension liabilities 2 2 2 3 2 Non-current interest-bearing liabilities 441 1055 908 54 49 Current interest-bearing liabilities 497 165 133 73 97 Unreal
Slide 21: Cash flow statement
CASH FLOW STATEMENT. SEKm 2013 2014 2015 2016 LTM Profit before tax 267 61 161 254 249 Adjustment for non-cash items -116 172 96 122 122 Interest paid -24 -58 -45 -39 -23 Interest received 1 3 1 1 1 Cash taxes -33 -18 -19 -42 -44 Cash flow before changes in working capital 96 160 196 295 304 Change
Slide 22: Definitions of key metrics
DEFINITIONS OF KEY METRICS. Metric Explanation Adjusted Explanation Business area return on capital employed (BA BA EBITA in relation to BA capital employed - - ROCE) Cash conversion excluding capex related to Besikta IT Cash conversion Operating cash flow in relation to EBITDA Adj. cash conversion