Slide 1: Presentation Interim Report Jan-Jun 2016
PRESENTATION INTERIM REPORT JAN-JUN 2016 15 JULY 2016
Slide 2: Contents
CONTENTS 1 Business overview 3 2 Dental 13 3 Demolition & Tools 19 4 Systems Solutions 23 5 Group overview 27 2
Slide 3: 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, KTH • MSc in Business Administration, • International Marke
Slide 4: Organised in three business areas
ORGANISED IN THREE BUSINESS AREAS Sales 2016 LTM: 8,455 MSEK EBITA 2016 LTM: 1,284 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 excava
Slide 5: Lifco develops leading niche companies
LIFCO DEVELOPS LEADING NICHE COMPANIES Dental Demolition & Tools Systems Solutions 3 MANAGEMENT LAYERS COMPANIES COUNTRIES EMPLOYEES1) All managers have incentives connected to 133 28 3,577 EBITA and working capital development 5 1) 2016-06-30
Slide 6: 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 Decentralized for the creati
Slide 7: One target: to increase profits every year
ONE TARGET: TO INCREASE PROFITS EVERY YEAR EBITA (MSEK) 2016 LTM 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: IFRS accounting since 2012, prior years Swedish GAAP. 7
Slide 8: While maintaining focus on capital employed
…WHILE MAINTAINING FOCUS ON CAPITAL EMPLOYED EBITA margin ROCE excl. goodwill and other intang. assets x.x% ROCE incl. goodwill and other intangible assets 15.0% 15.2% 135% 14.2% 123% 105% 18.8% 19.9% 19.8% 2014 2015 2016 LTM 2014 2015 2016 LTM 8
Slide 9: 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 structure • Focus on value adding personnel and minimized bur
Slide 10: Examples of value creation
EXAMPLES OF VALUE CREATION Dental1 - EBIT (MSEK) and organic EBIT growth Brokk2 - EBIT (MSEK) and organic EBIT growth CAGR CAGR 19% 11% CAGR 4% CAGR CAGR 8% 183 CAGR 167 11% 169 32% 118 79 71 31 14 1997 2006 2013 2015 2000 2006 2013 2015 EBIT EBIT 5% 12% 18% 19% 10% 27% 33% 40% margin margin 1) Comp
Slide 11: Geographic footprint
GEOGRAPHIC FOOTPRINT Dental Sweden 21% North Germany Rest of America 22% Europe Demolition & Tools 6% 40% Asia & Australia Rest of 9% World 2% Systems Solutions 11 Note: Geographic split per 2015
Slide 12: Contents
CONTENTS 1 Business overview 3 2 Dental 13 3 Demolition & Tools 19 4 Systems Solutions 23 5 Group overview 27 12
Slide 13: Dental
DENTAL Sales split by product category 2015 EBITA and % of total EBITA 2015 Prosthetics Other Other 614 MSEK 48% Manufacturing 3% 3% Prosthetics 48% 18% Sales split by geography 2015 76% Other 1% Sweden Rest of 16% Europe Distribution 42% 41% Germany Manufacturing Distribution 13 1) Excluding HQ cos
Slide 14: 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 14
Slide 15: 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 Rest of Europe Distribution of consumables Distribution of FI equipment Nordics
Slide 16: Attractive position in the value chain
ATTRACTIVE POSITION IN THE VALUE CHAIN Suppliers Dentists • Fragmented – large • Stable growth number of suppliers • Highly fragmented used by each dentist • Dependent on public • Sound profitability financing • Slow adoption of technical advances • Sound profitability 500+ 40,000+ • Lifco has a str
Slide 17: Dental financial overview
DENTAL FINANCIAL OVERVIEW Sales (MSEK) EBITA (MSEK) and EBITA margin 700 20,0% 18,0% 600 3,435 3,445 16,0% 3,266 500 14,0% 2,840 2,826 2,439 12,0% 400 10,0% 1,663 1,674 300 8,0% 1,435 200 6,0% 1,048 2016 LTM 2016 LTM 890 4,0% 100 2,0% 0 0,0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 200
Slide 18: Contents
CONTENTS 1 Business overview 3 2 Dental 13 3 Demolition & Tools 19 4 Systems Solutions 23 5 Group overview 27 18
Slide 19: Demolition & Tools
DEMOLITION & TOOLS Sales split by business 2015 EBITA and % of total EBITA1 2015 Demolition machines 31% 396 MSEK Attachments for 46% Demolition excavators and 54% machines Sales split by geography 2015 cranes Rest of World 3% Sweden APAC 7% 17% Germany 17% 17% North Attachments America 39% Rest of
Slide 20: Strong position in global niche markets
STRONG POSITION IN GLOBAL NICHE MARKETS Demolition machines Share of sales 46% Operations Development, assembly and marketing of remote controlled demolition robots. Assembly in Sweden Geographical Global focus Customer market Mainly construction industry (cramped and hazardous renovation) and other
Slide 21: Demolition & Tools financial overview
DEMOLITION & TOOLS FINANCIAL OVERVIEW Sales (MSEK) EBITA (MSEK) and EBITA margin 1,667 1,574 450 35,0% 1,289 400 1,176 1,189 30,0% 1,039 350 992 25,0% 862 300 743 736 250 20,0% 200 15,0% 2016 LTM 2016 LTM 373 150 10,0% 100 5,0% 50 0 0,0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 20
Slide 22: Contents
CONTENTS 1 Business overview 3 2 Dental 13 3 Demolition & Tools 19 4 Systems Solutions 23 5 Group overview 27 22
Slide 23: Systems Solutions
SYSTEMS SOLUTIONS Sales split by product category 2015 EBITA and % of total EBITA 2015 Environ- Contract mental manufacturing technology 21% 263 MSEK Environmental Contract technology manufacturing Construc- 20% 24% tion material Construction Sales split by geography 2015 material 11% Rest of World
Slide 24: Leading companies within specific niches
LEADING COMPANIES WITHIN SPECIFIC NICHES Contract manufacturing Construction material Interiors for vehicles Sawmill equipment Environmental technology Share of sales 24% 11% 17% 28% 20% 2015 Operations Contract Replacement of runoff Interior modules for Equipment for Equipment f
Slide 25: Systems Solutions financial overview
SYSTEMS SOLUTIONS FINANCIAL OVERVIEW Sales (MSEK) EBITA (MSEK) and EBITA margin 400 12,0% 3,343 350 2,892 10,0% 300 2,428 8,0% 2,276 2,247 2,168 250 2,055 2,014 1,869 1,747 200 6,0% 1,366 2016 LTM 150 2016 LTM 4,0% 100 2,0% 50 0 0,0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2007 2
Slide 26: Contents
CONTENTS 1 Business overview 3 2 Dental 13 3 Demolition & Tools 19 4 Systems Solutions 23 5 Group overview 27 26
Slide 27: Lifco Group financial overview
LIFCO GROUP FINANCIAL OVERVIEW Sales (MSEK) EBITA (MSEK) and EBITA margin 1400 16,0% 1200 14,0% 8,455 12,0% 1000 7,901 10,0% 6,802 800 6,184 6,030 5,707 8,0% 4,901 600 4,591 4146 6,0% 3,66 Pro forma 2014 400 2016 LTM 2016 LTM 2,629 4,0% 200 2,0% 0 0,0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 20
Slide 28: Strong cash flow generation
STRONG CASH FLOW GENERATION Core net working capital1 Capex and depreciation2 Operating pre-tax cash flow 1600 20,00% 18,00% 105 1400 102 1200 120% 16,00% 95 1200 14,00% 81 1000 100% 1000 12,00% 67 800 80% 60 800 10,00% 600 60% 8,00% 600 6,00% 1.6% 1.5% 400 40% 400 1.3% 4,00% 1.0% 1.0% 1.0% 200 20%
Slide 29: Overview of acquisitions 2006-2014
OVERVIEW OF ACQUISITIONS 2006-2014 Year Company Description Type Country Sales at acquisition Segment split - # of acquisitions Darda Producer of attachments for demolition robots Demolition & Tools Germany MEUR 8 Dental Prime Distributor of dental equipment and services Dental Finland MEUR 3 2006 E
Slide 30: Overview of acquisitions 2015-
OVERVIEW OF ACQUISITIONS 2015- Year Company Description Type Country Sales at acquisition Auger Torque Producer of earth drills Demolition & Tools UK MGBP 10 Auto-Maskin Diesel control units for marine use Systems Solutions Norway MNOK 130 Endodonti products Dental products Dental Sweden MSEK 10 J.H
Slide 31: 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 32: 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 33: Financials FY, Q2 and Jan-Jun 2016
FINANCIALS FY, Q2 AND JAN-JUN 2016 GROUP FY FY Q2 Q2 Jan-Jun Jan-Jun 2014 2015 Change 2016 2015 Change 2016 2015 Change Net sales, MSEK 6,802 7,901 16.2% 2,373 2,122 11.8% 4,424 3,870 14.3% EBITA, MSEK 966 1,186 22.8% 407 341 19.4% 681 583 16.9% EBITA margin 14.2% 15.0% 0.8 17.2% 16.1% 1.1 15.4% 15.
Slide 34: Lifco Group balance sheet
LIFCO GROUP BALANCE SHEET Comments Balance sheet 30 Jun 30 Jun 31 Dec MSEK 2016 2015 2015 • Interest bearing net debt increased 908 MSEK to Intangible fixed assets 6,063 4,961 5,010 2,858 MSEK due to acquisitions of 1.2 BSEK Tangible fixed assets 454 418 417 Financial assets 96 59 87 • At the end of
Slide 35: Growth or profit? Profit growth!
GROWTH OR PROFIT? PROFIT GROWTH! 35
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