Slide 1: A decent year-end for a challenging year
A decent year-end for a challenging year Q424 Webcast | February 13, 2025
Slide 2: Agenda
AGENDA • 2024 recap • Q424 review • Q&A
Slide 3: 2024 | a challenging year
2024 | a challenging year Priorities in existing portfolio, cost control & managing balance sheet – acquisitions on-hold Sales 134m€ Operational Ebit Operational Ebit Growth -17% vs. 2023 Impact of acquisitions +1.1m€ 6.8m€ margin 5.1% Decrease of -28% vs. 2023 decrease from 5.9% in 2023 Cash flow 1
Slide 4: Work to do to reach our long-term targets
Work to do to reach our long-term targets Modest performance compared to recent history & potential of the portfolio Operational ebit (€) & ebit%, r12 Roce% net debt/operational ebitda 3.3X 5.7 % 5.8 % 5.9 % 5.6 % 5.5 % 5.5 % 5.4 % 5.7 % 5.6 % 5.7 % 5.9 % 5.2 % 5.5 % 5.2 % 5.1 % 4.6 % 13.6 % 2.8X 2.
Slide 5: 2024 | profitability under pressure due to declined sales
2024 | profitability under pressure due to declined sales Healthy portfolio with +7% operational Ebit (excl. hq costs) in spite of tough market Commentary 2024 Sales -17% or -27m€ vs. 2023 ▪ Sales under pressure in majority of the companies Sales | Company high- & lowlights ▪ + 5m€ SSN ▪ + 2m€ FNB ▪
Slide 6: 2024 | strong operative cash flow
2024 | strong operative cash flow c. 24m€ operative cash flow in 2023-2024 – successful management of working cap in a tough market Commentary Trade working capital from 30.3m€ (Q423) to 25.5m€ in Q424 ▪ Successful management of working capital and decline of inventories from 30.8m€ to 25.1m€ during
Slide 7: 2024 | returns negatively impacted by profit decline
2024 | returns negatively impacted by profit decline Expected improving return profile through profit improvement potential Commentary Electronics BA ▪ Improvement of Return on Trade Working Capital from 46% to 52% ▪ Strong performance of SSN, Milcon and Infradex ▪ Reduction of working capital in co
Slide 8: Capital allocation | boreo era (Q320 onwards)
CAPITAL ALLOCATION | boreo era (q320 onwards) capital deployed primarily to acquisitions – over 40m€ funded w/ operational cash flow & issued equity *** ** * 8.8 IFRS 16 liabilities Financial debt 21.2 * Operative Cash Flow: EBITDA +/- NWC – Tax. Excl. leases and rents under IFRS 16 ** Equity issues
Slide 9: Good returns for acquisitions completed during the boreo era
Good returns for acquisitions completed during the boreo era Companies acquired since q320 generated operational ebit of 5.1m€ in 2024 17 acquisitions enterprise value of c. 50m€ ~15% roce* 11 platform & 6 add-on acquisitions including Earn-outs vs. ~20% expectation at acquisitions * 3-year average
Slide 10: Agenda
AGENDA • 2024 recap • Q424 review • Q&A
Slide 11: Q424 | highlights
Q424 | highlights Decent result Cost actions supporting profitability Operational EBIT 2.1m€ (Q423: 2.1m€) ~800k€ lower fixed costs in Q424 vs Q423 Profitability at 5.3% (Q423: 5.6%) Annual cost savings exceeding 2m€ Increase of sales by 6% to 39m€ (Q423: 37m€) unchanged trading outlook Priorities:
Slide 12: Q424 | Electronics
Q424 | Electronics Strong end of the year - operational ebit at 8.5% & rotwc at 52% Comments – q4 2024 Net sales and operational ebit% ▪ 31% sales growth vs. Q4/23, largely due to SSN and Milcon ▪ Defence industry demand creates a positive outlook going forward for Milcon with a growing orderbook ▪
Slide 13: Q424 | Technical trade
Q424 | Technical trade modest performance due to continued challenging demand environment. Operational EBIT at 4.4% & rotwc declined to 23.8% Comments – q4 2024 Net sales and operational ebit% ▪ Sales declined by -11% vs. Q4/23, especially due to declines in the Machinery and Putzmeister businesses
Slide 14: Q424 | debt facilities
Q424 | debt facilities maturity of credit facilities extended by one year to 2027 and loan repayments of EUR 2.5 million postponed from 2025 to 2027 debt maturity structure, total facilities (incl. unused), m€ Total facilities of 73.0m€ of which 54.0m€ used (q424)*** * 4.0m€ 9.5m€ 5% 13% 23.5m€ 32%
Slide 15: Q424 | decent outlook
Q424 | decent outlook Orderbooks at significantly higher level than Q4/23 but demand environment remaining muted. positive outlooks in parts of the portfolio, supported by implemented cost savings 1 2 3 order books Cost declined as planned Continued positive outlooks order books significantly above
Slide 16: Short-term | Focus on executing our back to growth -plan
Short-term | Focus on executing our back to growth -plan Costs decline +2m€ p.a. – working capital released – reorganizations completed 1 2 3 Acquisitions Investments Re-organizations of companies with ability to in the growth of our companies which in companies operating below the 50% generate earn
Slide 17: Agenda
AGENDA • 2024 recap • Q424 review • Q&A
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Slide 19: Q424 | net sales and operational eBIT
Q424 | net sales and operational eBIT Sales increased and operational EBIt remained flat, while relative profitability remained at decent levels Net sales * Operational ebit & ebit% * 6% 7.7 % 6.9 % 7.1 % 7.0 % 6.3 % 6.2 % 5.8 % 5.6 % 5.6 % 4.9 % 5.0 % 4.9 % 5.1 % 5.3 % 3.6 % 1.8 % 0% 43.3 45.0 39.2
Slide 20: Q424 | direct cost ratio and indirect cost ratio
Q424 | direct cost ratio and indirect cost ratio Direct Cost efficiency slightly decreased due to sales mix. indirect costs steadily declining Direct costs (R12) and Direct cost ratio (%)* Indirect costs (R12) and Indirect cost ratio (%)* 23.8 % 23.1 % 76.2 % 75.5 % 75.0 % 75.0 % 74.8 % 74.8 % 75.2
Slide 21: Grow & prosper
BOREO GROW & PROSPER
Slide 22: A long-term owner of great entrepreneurial companies
A long-term owner of great entrepreneurial companies 134m€ 6.8m€ (5.1%) 336 NET SALES 2024 Operational ebit 2024 Employees 22 companies 7.9% 2.8x Return on capital employed Net debt / operational EbitDA 2024 Q4 2024 Map excluding USA 22
Slide 23: Diversified industrial portfolio in 7 countries
Diversified industrial portfolio in 7 countries Electronics Technical trade 58M€ 2024 Sales 132 Professionals 76M€ 199 2024 Sales Professionals 7 Markets 3 Markets Net sales adjusted for continued operations New organizational structure effective as of 1.1.2024 23
Slide 24: Capable & committed leadership in a decentralized structure
Capable & committed leadership in a decentralized structure Simon Hallqvist, Camilla Grönholm, Jouni grönroos, Ralf Holmlund, Noora neilimo- Jussi vanhanen, Chairman chair of Remco chair of audit board member kontio, board board member committee member Board of Directors 1,913,433 shares 1,277 share
Slide 25: Boreo's business model
Boreo’s business model We own and acquire Great entrepreneurial companies with strong profits and cash flows Ultimate objective is We enable earnings growth by Sustainable profit Supporting & generation coaching in the long-term our companies & developing people we Re-invest capital with attractive
Slide 26: Our acquisition & ownership criteria
Our acquisition & ownership CRITERIA asset light industrial businesses with strong cash generation, proven track record and a management fit with boreo culture Industrial characteristics financial characteristics organisational characteristics investment characteristics B2b high Cash conversion Stro
Slide 27: Our philosophy – Sustainable long-term profit generation
Our philosophy – Sustainable long-term profit generation Decentralization Capital allocation Culture of ownership and release of Focus on earnings and capital efficiency entrepreneurial energy Broad universe of investment Aligned interest of shareholders and opportunities – discipline in capital emp
Slide 28: What's in it for the companies?
What’s in it for the companies? A Long-term owner Leadership development • Stability • Best practice sharing • Continuation • Support from ’Coaches’ • • MD peer group • Credibility Access to funding boreo companies • Boreo Academy Balance P&L sheet Business development Personnel • Board of Directors
Slide 29: Focus on earnings growth and return on capital
Focus on earnings growth and return on capital Updated long-term strategic financial targets to better reflect shareholder value creation minimum annual minimum net debt / average operational ROCE operational EBITDA EBIT growth 15% 15% 2-3x Dividend policy Target to annually increase dividend per sh
Slide 30: Grow & prosper
BOREO GROW & PROSPER