Storskogen Group Ab Class B · OMXSTO:STOR_B
Storskogen Group Ab Class B — Q3 2023 Earnings Presentation
25 slides from Storskogen Group Ab Class B's earnings presentation, Nov 7, 2023
Slide 1: Storskogen Q3 2023
Storskogen Q3 2023 TODAY’S PRESENTERS Daniel Kaplan Lena Glader CEO CFO November 2023 1
Slide 2: Q3 2023 highlights
Q3 2023 highlights Focus on cash flow from operating activities yielding good results KEY EVENTS NET SALES: ORGANIC NET SALES GROWTH, YTD: • Cash flow from operating activities continued to improve: SEK 8,333m -2% • Q3 at SEK 584m (204) (-1%1) (12%2) • YTD at SEK 1,903m (356) • LTM adj. cash convers
Slide 3: Net sales and EBITA margin
Net sales and EBITA margin Sales on par with comparable quarter, and where the margin contraction was driven by Trade Financial development COMMENT 10,000 • Margin contraction 9,000 10% affected by the 8,000 9.6% 9.7% seasonally slow July 9.7% 9.4% 9.2% 8.7% 9% 7,000 • Divestments in H1’23 had 6,000
Slide 4: Cash conversion
Business Insight Cash conversion Positive cash conversion trend reflects the fact that Focus areas the ongoing initiatives in this area are bearing fruit 100 90 Inventory reduction Accounts payable Proactive accounts 80 improvements receivable 70 • Inventory categorisation, • Analysis of payment • I
Slide 5: Cash flow from operations
Cash flow from operations Prioritising cash flow from operating activities yielding tangible results 3,175 Cash flow from operating activities, LTM 2,795 2,278 1,628 1,055 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 5
Slide 6: Services
Services YTD margin recovering from challenging 2022 NET SALES: ORGANIC NET SALES GROWTH, YTD: COMMENTS SEK 2,576m -2% • Q3 is a seasonally weaker quarter (-8%1) (16%2) • Companies divested in Q2 had sales of SEK 194m in comparable quarter • Solid performance in Infrastructure, Digital Services ADJU
Slide 7: Trade
Trade Key focus on cash flows and protecting profitability NET SALES: ORGANIC NET SALES GROWTH, YTD: COMMENTS SEK 2,341m -3% • Q3 is a seasonally weaker quarter (+4%1) (5%2) • Companies divested in H1 had sales of SEK 64m in comparable quarter • Health and Beauty showed resilience with strong ADJUST
Slide 8: Industry
Industry Demand normalising from very high levels in late 2022 and early 2023 NET SALES: ORGANIC NET SALES GROWTH, YTD: COMMENTS SEK 3,429m 0% • Overall performance in line with expectations as markets are normalising (+2%1) (15%2) • Solid underlying market with good demand and orderbooks ADJUSTED E
Slide 9: Transactions
Transactions Strategic divestments continue, while primarily only adding small value-accretive add-ons. Focus on reducing leverage and building long term shareholder value Q31 YTD1 Strategic divestments Strategic divestments Annual sales SEK 578m Annual sales SEK 1,850m EBITA margin ~6% EBITA margin
Slide 10: Financial summary, Q3
Financial summary, Q3 Gross profit holds up, but EPS affected by interest rates SEKm Q3’23 Q3’22 Chg., % LTM COMMENTS Net sales 8,333 8,417 -1 36,845 • Q3 net sales affected by -1% organic C.O.G.S -6,726 -6,783 -1 -29,446 growth and net divestments while FX contributes positively Gross profit 1,607
Slide 11: Earnings bridge, Q3
Earnings bridge, Q3 Earnings primarily affected by increased interest expenses and lower revenue Q3’23 vs Q3’22 575 1 77 Y/Y comparable change 55 443 31 1 62 121 230 19 8 2 192 11 PBT Q3’22, IAC FX and PBT Q3’22, Gross profit Sales & Other Net interest PBT Q3’23, FX and One-off IAC PBT Q3’23, report
Slide 12: Financial summary, YTD
Financial summary, YTD Adj. EBITA margin improving but significant impact from fin. items Jan-Sep Jan-Sep SEKm 2023 2022 Chg., % LTM COMMENT Net sales 27,009 24,414 11 36,845 • 9M net sales growth of 11% is positively C.O.G.S -21,544 -19,573 10 -29,446 affected by acquisitions and FX (∑ +13%), but n
Slide 13: Condensed cash flow, Q3
Condensed cash flow, Q3 Focus on cash flow yielding significant results SEKm Q3’23 Q3’22 Chg., % LTM Q3’23 COMMENT Profit before tax 192 575 -67 1,631 • Cash flow from operating activities of SEK 584m (after interest and tax) Adjustment for non-cash items 552 259 >100 1,971 • Change in WC SEK -6m (-
Slide 14: Cash flow bridge, last twelve months
Cash flow bridge, last twelve months Improvement in free cash flow after leasing of almost SEK 2 bn compared to LTM Q3 2022 LTM, SEKm Y/Y increase 3,175 SEK 1,962m 637 23 557 2,004 22 48 633 1,301 Q3’23 cash flow Capex Net investments Leasing Free cash flow Acquisitions and Acquired and Paid conting
Slide 15: Operating cash flow and cash conversion
Operating cash flow and cash conversion Cash flow improvement supported by working capital efficiency and LTM cash conversion well ahead of target Operating cash flow1 (LTM) 4,500 140% 4,000 120% 3,500 95% 100% 3,000 87% 2,500 73% 71% 80% 59% 2,000 55% 60% 1,500 50% 32% 40% 1,000 20% 500 1,634 1,454
Slide 16: Condensed balance sheet
Condensed balance sheet Debt significantly reduced in the past year SEKm Q3’23 Q3’22 Q4’22 Chg., % COMMENT Total non-current assets 30,878 30,369 31,093 -1 Total current assets 15,017 16,824 16,389 -8 • Interest-bearing gross debt reduced Total assets 45,895 47,193 47,482 -3 • Q3: SEK -896m • YTD: S
Slide 17: Total debt and leverage
Total debt and leverage Strong cash flows enabling significant reduction of interest-bearing and non-interest-bearing debt items while liquidity remains ample Gross debt/Cash & cash equivalents, SEKm RTM Adj. EBITDA, SEKm 20,000 -649m Y/Y 5,500 -375m Q/Q 2,997 2,988 2,784 2,723 15,000 -2,492m Y/Y 2,
Slide 18: Key takeaways
Key takeaways Delivery on strategic priorities Efforts to improve cash flow yielding significant results Strategic review with further divestments in the quarter Focusing on margins and gaining market share in a challenging macro environment Well positioned to reduce debt further in seasonally stron
Slide 19: Q&A
Q&A TODAY’S PRESENTERS Daniel Kaplan Lena Glader CEO CFO 19
Slide 20: Appendix
Appendix 20
Slide 21: Storskogen in brief
Storskogen in brief Storskogen is an international group of businesses with annual LTM net sales of SEK 36.8bn and Adj. EBITA of SEK 3.5bn, split across three business areas and 14 verticals Services Trade Industry Peter Ahlgren Christer Hansson Fredrik Bergegård NO. OF BUSINESS UNITS1 NO. OF BUSINE
Slide 22: Financial development per segment
Financial development per segment Services solid around 10 percent margins as Industry normalising from high levels Services Trade Industry 12,000 12% 12,000 12% 15,000 11,000 11,000 10.6% 14,000 11.3% 11.6% 11.5% 11.4% 12% 11.1% 11.0% 10.0% 10.0% 10.0% 13,000 9.5% 9.7% 9.6% 10,000 9.2% 10% 10,000 9
Slide 23: Organic sales growth
Organic sales growth Organic sales growth in negative territory, primarily driven by the Services business area Organic growth (QTD1) 30% 25% 24% 20% 20% 15% 17% 17% 16% 10% 11% 5% 6% 4% 3% 0% -2% -5% -7% -6% -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 1 Comparable s
Slide 24: Net debt and leverage
Net debt and leverage Debt maturities significantly extended. Leverage unchanged at 2.6x with further reduction in short to medium term being a key priority 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 target range 10,000 2.5 2 8,000 1.8 6,000 1 4,000 0.5 2,000 1,
Slide 25: Overview of financial targets
Overview of financial targets Focus is on operational excellence, balance sheet and cash flow in the short to medium term 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: