Ratos Ab Class A · OMXSTO:RATO_A
Ratos Ab Class A — Shareholder Meeting (March 2022)
29 slides from Ratos Ab Class A's shareholder meeting presentation, Mar 22, 2022
Slide 1: AGM 2022
AGM 2022 Jonas Wiström, President and CEO 22 March 2022
Slide 2: AGM 2022 agenda
AGM 2022 ▪ Ratos 2021 ▪ Sustainability ▪ Ahead of plan ▪ Ratos share in 2021 and goals for 2022 2
Slide 3: Objectives 2021
Objectives 2021 (from AGM 2021) ✓ Continue handling Covid-19 ✓ Keep increasing company profitability ✓ Execute on first acquisitions 3
Slide 4: 2021: An important year for Ratos
2021: An important year for Ratos ▪ Turnaround period 2018-2020 was finalized ▪ Our journey from investment company to group was completed ▪ Growth journey started and is ahead of plan ▪ EBITA growth 23% for the year ▪ EPS growth from operations is up 79% 4
Slide 5: Turnaround completed: 86% annual EBITA growth
1. Turnaround completed Turnaround completed: resulted in 86% annually EBITA growth Ratos consolidated EBITA* (MSEK) 1 468 +86% 701 425 2018 2019 2020 Profitability Stability *Based on current structure. All exit gains, sale of property (Lejonet) & revaluation of D&B shares excluded. 5
Slide 6: Profit improvement steps and focus
1. Turnaround completed Profit improvement steps and focus Our journey to growth The way we work ▪ Structure 3 Growth Organic (sales, pricing) and acquisitions ▪ Processes 2 Profitability Opex and gross margin ▪ Culture 1 Stability Forecasting ability, management, prio business plan 6
Slide 7: Financial targets
Financial targets Announced in February 2021 Dividend payout EBITA Net Debt / EBITDA 30–50% 3 bn SEK 1.5 – 2.5x of profit after tax Net debt in relation to EBITDA The dividend payout ratio should normally range from 1.5 EBITA is to amount to at least should amount to 30–50% of to 2.5x, excluding fin
Slide 8: Target of 3,000 MSEK in EBITA announced in 2021
Target of 3 000 MSEK in EBITA announced in 2021 3 000 +15% 1 468 2020 2025 Growth Profitability Profitability Stability Stability *Based on current structure, all exit gains, sale of property & revaluation of D&B shares excluded. 8
Slide 9: First year starting ahead of plan
First year starting ahead of plan 3 000 Whereof 70% organic +14% +23% 1 802 1 468 2020 2021 2025 Growth Profitability Profitability Stability Stability *Based on current structure, all exit gains, sale of property & revaluation of D&B shares excluded. 9
Slide 10: Acquisition journey started in 2021 - 8 acquisitions completed
Acquisition journey started in 2021 - 8 acquisitions completed Acquired run rate EBITA 400 MSEK Add-on Acquisitions (6) Adjacent (1) New platforms (1) Sales EV / EBITA Sales EV / EBITA Sales EV / EBITA 1 228 MSEK 5-6x 932 MSEK 6x 1 922 MSEK 9x ▪ Decentralized company-driven ▪ Identified by companies
Slide 11: Evaluation of +200 companies has resulted in 8 acquisitions
Evaluation of +200 companies has resulted in 8 acquisitions M&A pipeline Comments ▪ Ratos holds bi-weekly and monthly meetings to discuss M&A opportunities +200 companies screened ▪ Clear investment guidelines +20 bids submitted ▪ After bids, deal teams are formed 8 successful acquisitions completed
Slide 12: Industry: Profit has developed strongly since 2018
Industry: Profit has developed strongly since 2018 Group of industrial market leaders, based in the Nordics who export to the world EBITA has grown 10x since 2018 Export driven Global Consolidated EBITA Industry (MSEK) Sales Subsidiaries in +85% outside Nordics 5 continents 561 116% ~40% outside Eur
Slide 13: Consumer: Annual EBITA growth of 86%
Consumer: Annual EBITA growth of 86% Provide a better and easier life for consumers EBITA has grown 86% per annum What we do Positive outlook Consolidated EBITA consumer* (MSEK) 845 “Provide a better and Outdoor easier life for Green living consumers” Digital transformation 651 86% Facts Strong deve
Slide 14: Construction & Services: Acquisitions as a launchpad for growth
Construction & Services: Acquisitions as a launchpad for growth We build and maintain a sustainable society EBITA has stabilized and is now fast-growing What we do Focus areas EBITA, consolidated (MSEK) Construction & engineering “We build and maintain +68% a sustainable society” Infrastructure 677
Slide 15: Strong balance sheet, large headroom for investment - 6.5 bn SEK
Strong balance sheet, resulting in large headroom for investment - 6.5 bn SEK Leverage (Net Debt/EBITDA) Comments ▪ Leverage has improved over the last four years driven by increased 2,4x stability and profitability resulting in a strong cash flow Target level at 1,5x-2,5x ▪ Target level at 1,5x-2,5
Slide 16: Return on capital employed
Return on capital employed ROCE % Comments 12% ▪ Strong development 2018 – 2021 ▪ A 3 ppt increase versus last year 9% ▪ Improved earnings has contributed to an improved ROCE 4% 3% 2018 2019 2020 2021 * Adjusted for Bisnode, exit capital gains and sale of property. 16
Slide 17: Significantly improved earnings per share
Significantly improved earnings per share Earnings per share* Comments (SEK / share) 2,8 • Significantly increased EPS as a Bisnode result of improved net financial 2,2 79% items and lowered tax cost 0,6 • Improved net financial items by +40%, effect of centralized financing • The effective tax rate
Slide 18: Sustainability at Ratos – action speak louder than words
Sustainability at Ratos – action speak loader then words We are firm believers in that what is sustainable in the long run is also profitable in the long run We focus is on incremental improvement that really makes a difference in the long term Action!
Slide 19: Plantagen – Reduce carbon emissions by 50%
Plantagen – Reduce carbon emissions by 50% ▪ 100% Green energy since 2021 ▪ Reduced CO2 emission by almost 50% since last year ▪ Reduced waste by 26% since 2018 ▪ 35% of all plants sold are locally sourced 19
Slide 20: Aibel 64% of orderbook in renewables & electrification
Aibel 64% of orderbook in renewables & electrification ▪ 64% of the order book offshore wind and electrification projects ▪ Sustainalitycs awarded Aibel a Top ESG rating – 1st percentile in the energy services industry ▪ The latest electrification contracts awarded to Aibel during the quarter help r
Slide 21: HENT – sustainable buildings
HENT – sustainable buildings ▪ The office project Foajén in Malmö was one of Sweden's first WELL-certified projects, focusing on health and well-being ▪ In 2019, nominated for “Environmental Building, of the Year” with Danderyd's New Emergency Department in Sweden ▪ World leader in wooden constructi
Slide 22: Speed reduce carbon footprint by 40%
Speed reduce carbon footprint by 40% ▪ Speed Group reduced its carbon footprint by 40% in 2021 (compared with 2020) ▪ Ahead of plan in its ambition to be carbon neutral by 2025 ▪ Speed Group has divested energy-inefficient properties and optimised warehouse spaces ▪ Emissions from fossil fuels have
Slide 23: Diab – reduce carbon footprint by 46%
Diab – reduce carbon footprint by 46% ▪ Diab Group decided in 2016 that the carbon footprint of a group carbon reduction plan, in 2018 Diab got the targets approved by the Science Based Target initiative, first in core materials industry and still is ahead of competition ▪ Diab reduction program cov
Slide 24: Going forward
Going forward ▪ A Ratos company will strive to be an ESG leader in its industry by supporting and strengthening current ESG trends in the long term ▪ Ratos focuses on incremental improvement in industries that have historically had far too heavy a climate footprint. Here we make a really big differe
Slide 25: Ahead of plan
Ahead of plan 1 2 3 Turnaround completed Acquisition journey started Strong balance sheet All time high earnings +400 MSEK EBITA acquired during 6,5 bn SEK in undeployed In 9 companies 2021 capital EPS +79%
Slide 26: Ratos class B shares 2021
Ratos class B shares 2021 ▪ Total return 2021: 53.7% (SIX Return Index: 39.3%) ▪ Number of shareholders by 31 december 2021 was 73,741 compared to 53,357 end of 2020 ▪ Turnover (total sold shares during the year divided with number of outstanding shares at year-end) in class B shares B-aktien was 74
Slide 27: What sets us apart
What sets us apart We build on the best from Industrials and Private Equity to build earnings per share Operational focus Impatient Incentives We believe value is created through We focus on pricing, gross margin, We have long term equity-based Operational excellence (>90%) rather opex & cash flow i
Slide 28: Goals for 2022
Goals for 2022 ▪ To continue to create shareholder value in an increasingly unpredictable operational environment (from pandemic to new security situation in Europe) ▪ To increase growth - organically and through acquisitions ▪ To gain more soft synergies through more focused business areas over tim
Slide 29: Relentless since 1866
Relentless since 1866 www.ratos.com