Slide 1: Investor Presentation March 2015
LIFCO STRICTLY PRIVATE AND CONFIDENTIAL INVESTOR PRESENTATION MARCH 2015
Slide 2: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 24 4 Systems & Solutions 28 5 Group overview 32 6 Appendix 38 2
Slide 3: 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 4: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 24 4 Systems & Solutions 28 5 Group overview 32 6 Appendix 38 4
Slide 5: 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 6: Road ahead for Lifco
ROAD AHEAD FOR LIFCO • Overall purpose is to share knowledge about Lifco and communicate the road ahead • First step on the transformation from a private company to a public company was the Purpose of today’s event November 2014 IPO • Natural next step is to is to evaluate the possibilities of acces
Slide 7: Lifco develops leading niche companies
LIFCO DEVELOPS LEADING NICHE COMPANIES LIFCO Dental Demolition & Tools Systems Solutions NET SALES EBITA COMPANIES COUNTRIES EMPLOYEES SEK 6,898m1 SEK 998m1 106 28 3,013 1) pro forma LIFCO 7
Slide 8: 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 9: One target: to increase profits every year
ONE TARGET: TO INCREASE PROFITS EVERY YEAR… Pro forma 2014 EBITA (MSEK) 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Dental Demolition & Tools Systems Solutions Note: IFRS accounting since 2012, prior years Swedish GAAP. Proforma includes acquired MDH full yea
Slide 10: While maintaining focus on capital employed
…WHILE MAINTAINING FOCUS ON CAPITAL EMPLOYED EBITA margin Return on core net working capital1 ROCE (excl. goodwill and other intang. assets) 14.5% 105.4% 77.3% 11.6% 11.5% 64.9% 62.0% 73.0% 71.0% Pro forma 2014 18.1% 17.4% 18.8% 2012 2013 2014 2012 2013 2014 2012 2013 2014 ROCE (incl. goodwill and x
Slide 11: 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 optimisation • Focus on customers with potential for sustainable profit growth Optimized management • Focus on value adding personnel and minimized bureaucracy s
Slide 12: 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) 2) Companies included: Nordenta, DAB Dental, Da
Slide 13: Organised in three business areas
ORGANISED IN THREE BUSINESS AREAS LIFCO Sales pro forma: 6,898 MSEK EBITA pro forma: 998 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
Slide 14: Geographic footprint
GEOGRAPHIC FOOTPRINT Dental Sweden 23% Germany 24% North RoE America 42% Demolition & Tools 4% Asia & Australia 7% RoW 1% Systems Solutions Note: Geographic split per 2014 LIFCO 14
Slide 15: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 24 4 Systems & Solutions 28 5 Group overview 32 6 Appendix 38 LIFCO 15
Slide 16: 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 17: 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 LIFCO 17
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 CAGR 1.6% 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
Slide 19: Highly fragmented customer market
HIGHLY FRAGMENTED CUSTOMER MARKET Overview of the customer groups in Lifco’s main dental markets 69,250 11,875 Number of 7,550 dentists 4,750 4,600 4,500 Germany Sweden Denmark Norway Finland Europeavg.1 European Share of private 96% 46% 66% 69% 44% 84% practices Share of public expenditure on 63% 3
Slide 20: 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 ü ü ü ü ü ü Distribution of FI equipment ü ü ü ü ü Nordics
Slide 21: 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 adoptation of technical advances LIFCO • Sound profitability 500+ 40,000+ • Lifco has
Slide 22: Prosthetics is a new market for Lifco
PROSTHETICS IS A NEW MARKET FOR LIFCO Overview Dental lab import model – example MDH • In March 2014, Lifco acquired MDH, Germany’s Traditional model Import model leading supplier of imported dental prosthetics Dental practice • Diagnosis German lab • Consultancy with dentist ‒ More than 100,000 den
Slide 23: Dental financial overview
DENTAL FINANCIAL OVERVIEW Sales (MSEK) development EBITA (MSEK) and EBITA margin (%) development 600 24% 3 362 575 2 840 2 826 500 20% 2 439 399 17.1% 400 376 16% 15.1% 14.1% 312 13.2% 12.8% 1 663 1 674 300 11.4% 11.6% 12% 253 1 435 10.9% 193 Pro forma 2014 Pro forma 2014 1 048 200 7.9% 8% 890 114 1
Slide 24: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 24 4 Systems & Solutions 28 5 Group overview 32 6 Appendix 38 LIFCO 24
Slide 25: 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 26: 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 27: Demolition & Tools financial overview
DEMOLITION & TOOLS FINANCIAL OVERVIEW Sales (MSEK) development EBITA (MSEK) and EBITA margin (%) development 300 29.7% 288 30% 7% 01 4 12. 268 6,8 % 1 289 R2 006-2 -20 14 1 CAG 246 R 2006 1 189 250 24.9% 25% CAG 1 176 22.8% 22.3% 1 039 992 194 20.7% 200 185 19.6% 20% 862 17.9% 160 155 743 736 15.4%
Slide 28: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 24 4 Systems & Solutions 28 5 Group overview 32 6 Appendix 38 LIFCO 28
Slide 29: 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 30: 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 31: Systems Solutions financial overview
SYSTEMS SOLUTIONS FINANCIAL OVERVIEW Sales (MSEK) development EBITA (MSEK) and EBITA margin (%) development 300 15,0% 6.4% CAGR 2006-2014 9.0% CAGR 2006-2014 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% 162 8.7% 155 8.3% 1 366 150 7.7% 7.5% 136 7,5% 6.3%
Slide 32: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 24 4 Systems & Solutions 28 5 Group overview 32 6 Appendix 38 LIFCO 32
Slide 33: Lifco Group financial overview
LIFCO GROUP FINANCIAL OVERVIEW Sales (MSEK) development EBITA (MSEK) and EBITA margin (%) development 1 200 24% 6 898 % A 17.2 6 184 FORM RO 6 030 1 000 01 4 P 998 20% 5 707 06-2 R 20 CAG 4 901 800 16% 4 591 715 692 4 146 14.5% 631 3 660 600 12% 11.3% 511 11.6% 11.5% 10.6% 11.1% 11.1% 453 2 629 412
Slide 34: Strong cash flow generation
STRONG CASH FLOW GENERATION Core net working capital1 Capex and depreciation2 Operating pre-tax cash flow 827 1 249 105 1 101 1 116 95 710 679 75 18.5% 18.4% 65 67 17.8% 60 99.3% 98.1% 85.6% 1.6% 1.5% 1.2% 1.1% 1.0% 1.0% 2012 2013 2014 2012 2013 2014 2012 2013 2014 NWC (SEKm) NWC as % of sales Capex
Slide 35: 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 36: 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 37: Growth or profit? Profit growth!
GROWTH OR PROFIT? PROFIT GROWTH! LIFCO 37
Slide 38: Key credit considerations
KEY CREDIT 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,
Slide 39: Contents
CONTENTS 1 Business overview 5 2 Dental 15 3 Demolition & Tools 24 4 Systems & Solutions 28 5 Group overview 32 6 Appendix 38 LIFCO 39
Slide 40: Financials 2014
FINANCIALS 2014 GROUP FY14 FY13 Change Q414 Q413 Change Net sales, MSEK 6,802 6,030 12.8% 1,901 1,678 13.3% EBITA, MSEK 966 692 39.6% 273 211 29.2% EBITA margin 14.2% 11.5% 2.7 14.4% 12.6% 1.8 DENTAL FY14 FY13 Change Q414 Q413 Change Net sales, MSEK 3,266 2,826 15.6% 918 765 20.1% EBITA, MSEK 543 39
Slide 41: Lifco Group balance sheet
LIFCO GROUP BALANCE SHEET Comments Balance sheet as at September 2014 SEKm 2012 2013 Sep-2014 • Equity injection by Carl Bennet AB of SEK 500m at the end of September 2014 Intangible fixed assets 3,016 3,047 4,562 Tangible fixes assets 334 342 365 ‒ Proceeds will be used to repay existing debt Finan
Slide 42: Lifco
LIFCO LIFCO