Ratos Ab Class A · OMXSTO:RATO_A
Ratos Ab Class A — Q4 2021 Earnings Presentation
28 slides from Ratos Ab Class A's earnings presentation, Feb 14, 2022
Slide 1: Presentation – Q4 2021
Presentation – Q4 2021 14 February 2022
Slide 2: 2021: A great year for Ratos
2021: A great year for Ratos ▪ Turnaround period 2018-2020 is finalized ▪ Financial targets for 2025 were established ▪ Growth journey has started and is ahead of plan ▪ EBITA growth 23% for the year and 13% for the quarter ▪ Strength through the diversified portfolio ▪ EPS growth from operations is
Slide 3: Turnaround completed
Turnaround completed Developed a Ratos toolbox for profit improvement
Slide 4: Turnaround completed: resulted in 86% annually EBITA growth
1. Turnaround Turnaround completed 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 excl
Slide 5: Financial targets
Financial Targets Financial targets Announced in February 2021 Dividend payout EBITA Net Debt / EBITDA 30–50% 3 Billion 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
Slide 6: Target of 3 000 MSEK in EBITA announced in 2021
Financial Targets 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
Slide 7: First year starting ahead of plan
Ahead of plan First year starting ahead of plan 3 000 +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
Slide 8: 2021 - Financials
2021 - Financials • Increased earnings per share • Strong earnings, both in the full year and for the quarter • The transformation from an investment company to a Group is now complete
Slide 9: Increased adjusted EBITA by 23% for the full year 2021
Increased adjusted EBITA by 23% for the full year 2021 Comments EBITA Full year (Consolidated, MSEK) ▪ Increased EBITA in 11 of 13 companies +23% 1 802 ▪ All-time high EBITA in 9 companies 1 686 -116 ▪ EBITA growth of 334M SEK whereof 70% was organic and 30% from acquisitions 1 468 ▪ EBITA impact of
Slide 10: Increased adjusted EBITA by 13% in the fourth quarter 2021
Increased adjusted EBITA by 13% in the fourth quarter 2021 Comments EBITA Q4 (Consolidated, MSEK) ▪ Increased EBITA compared to last year +13% ▪ Acquired EBITA of approx. 50 MSEK 390 ▪ EBITA impact of +164 MSEK from unrealised gain in D&B shares +164 226 200 Q4 2020 Q4 2021 Revaluation Adj EBITA D&B
Slide 11: Earnings per share
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 for the year 1,6 was 1
Slide 12: We have strengthened the balance sheet
We have strengthened the balance sheet Ratos has ~6 500 MSEK in available funds for acquisitions, Net Debt / EBITDA without diluting shareholders. (Financial lease excluded, Consolidated) 2.4 Target leverage 1.5-2.5x 1.8 1.1 0.2 2018 2019 2020 2021 Note: EBITDA proforma post Presis Infra & Vestia 12
Slide 13: Operating cash flow
Operating cash flow Operating cash flow Comments (MSEK) 2 545 120 1 387 ▪ Overall strong operating cash Operating cash flow* flow Change in NWC ▪ 2021 impacted by planned 1 293 inventory build-up in Consumer 2 425 2 161 ▪ Change in NWC 2018 impacted by new accounting practice 224 1 309 (IFRS 15) 634
Slide 14: Return on capital employed
Return on capital employed Return on capital Employed Comments (%) 12% ▪ Strong development 2018-2021 9% ▪ Improved earnings has contributed to an improved ROCE 4% 3% 2018 2019 2020 2021 * Adjusted for Bisnode, exit gains and sale of property 14
Slide 15: Sustainability
Sustainability
Slide 16: EU Taxonomy – Eligibility for Ratos
EU Taxonomy – Eligibility for Ratos EU taxonomy ▪ New EU regulation, requiring reporting from FY2021. ▪ Linking economic activities and sustainability criteria for six environmental objectives with financial reporting. Resulting in KPIs showing share of turnover, capex and opex eligible for the taxo
Slide 17: Several messages of strength
Several messages of strength Ending 2021, several messages of strength came from our companies. Both in terms of concretely reducing climate footprints, and evidence of how the companies lead the way to a more sustainable business in their industry. Speed Group reduced its carbon Ratos reduced its c
Slide 18: Financial performance in our Business areas
Financial performance in our Business areas
Slide 19: Construction & Services: Acquisitions as a launchpad for growth
Construction & Services 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 Consolidated EBITA Construction & Services (M SEK) Construction & engineering We build and maintain
Slide 20: Business Area: Construction & Services
Construction & Services Business Area: Construction & Services Comments EBITA 2021 EBITA Q4 ▪ Organic sales development +5% in the quarter and -1% for the full year 2021 569 MSEK 179 MSEK ̶ Higher project volumes and good (+42%) (+47%) project execution in Aibel ̶ Material/project delays had an impa
Slide 21: Svensk Samverkansentreprenad Aktiebolag (SSEA) Group
Construction & Services Svensk Samverkansentreprenad Aktiebolag (SSEA) Group Vestia and HENTs Swedish division join forces ▪ SSEA Group has been established to become Sweden's leading Partnering contractor, aiming for “555”: 5 bSEK revenue with 5% EBITA-margin in 5 years” ▪ Group consists of Vestia
Slide 22: Consumer division has grown 86% annually
Consumer Consumer division has grown 86% annually Consolidated EBITA consumer* What we do Facts (M SEK) 845 Revenue: SEK 7 000 M “Provide a better and > 12 000 000 customers 651 easier life for 86% consumers” ~1 500 employees Strong development Positive outlook Sales / Marketshare “Outdoor & Green l
Slide 23: Business Area: Consumer
Consumer Business Area: Consumer Comments ▪ Organic sales development +8% in the EBITA 2021 EBITA Q4 quarter and +5% for the full year 2021 ̶ Strong sales in KVD driven by trading 821 MSEK -28 MSEK cars in own book (+29%) (+3%) ̶ Strong order book in Oase Outdoors going in to 2022 ▪ EBITA improved b
Slide 24: Industry: Profit has developed strongly since 2018
Industry Industry: Profit has developed strongly since 2018 Building industrial market leaders, based in the Nordics who exporting to the world EBITA has grown 10x since 2018 Export driven Global Consolidated EBITA Industry* (M SEK) Operate across +85% outside Nordics 116% ~40% outside Europe 5 cont
Slide 25: Business Area: Industry
Industry Comments Business Area: Industry ▪ Organic sales development -6% in the quarter and +1% for the full year 2021 ̶ Strong organic sales growth for HL Display, LEDiL and TFS EBITA 2021 EBITA Q4 391 MSEK 43 MSEK ▪ EBITA decreased by 61% in the fourth quarter (-25%) (-61%) and 25% for full year
Slide 26: Growth started in 2021 - 8 acquisitions completed
Growth started in 2021 - 8 acquisitions completed 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 and or Ratos ▪ Market leaders or potential to
Slide 27: Ahead of plan
Ahead of plan 1 2 3 Turnaround completed 400 MSEK EBITA Strong balance sheet acquired during 2021
Slide 28: The leading company builder in the Nordics
The leading company builder in the Nordics A group of market leaders A clear culture Part of something larger Decentralized structure Ratos is a sustainable long-term owner with no exit horizon It’s all about people Gain benefits of the larger group through contacts and network We own companies that