Storskogen Group Ab Class B · OMXSTO:STOR_B
Storskogen Group Ab Class B — Q1 2022 Earnings Presentation
31 slides from Storskogen Group Ab Class B's earnings presentation, May 2022
Slide 1: Storskogen Q1 2022
Storskogen Q1 2022 TODAY’S PRESENTERS Daniel Kaplan Lena Glader CEO and co-founder CFO May 2022 1
Slide 2: Agenda
Agenda 1. Storskogen in brief 2. Q1 highlights 3. Financial performance 4. Focus – Trade business area 5. Key takeaways 6. Q&A 2
Slide 3: Storskogen in brief
Storskogen in brief An international compounder with an infinite ownership agenda and a vision to be the best owner of small and medium-sized companies SEK 32.7bn Investment teams Operational presence in annual RTM net sales1 Operational presence in 35 countries with investment SEK 3.6bn teams in 9
Slide 4: Storskogen in brief
Storskogen in brief An international compounder with an infinite ownership agenda and a vision to be the best owner of small and- medium sized companies SEK 32.7bn Investment teams Operational presence in annual RTM net sales1 ~11,000 employees, with operational presence in 27 countries with investm
Slide 5: Storskogen in brief
Storskogen in brief Highly diversified business split across three business areas, 14 verticals and 122 business units Services Trade Industry Peter Ahlgren Christer Hansson Fredrik Bergegård NO. OF BUSINESS UNITS NO. OF BUSINESS UNITS NO. OF BUSINESS UNITS 58 29 35 NO. OF EMPLOYEES NO. OF EMPLOYEES
Slide 6: Overview of financial targets
Overview of financial targets TARGETS Organic EBITA growth Adjusted Adjusted cash Interest-bearing net IN THE EBITA growth: including EBITA margin conversion on an debt / MEDIUM Real GDP acquisitions: (over time): annual basis: adjusted RTM TERM EBITDA: 10% >70% growth + 1-2 In line with percentage
Slide 7: Agenda
Agenda 1. Storskogen in brief 2. Q1 highlights 3. Financial performance 4. Focus –Trade business area 5. Key takeaways 6. Q&A 7
Slide 8: Q1 2022 highlights
Q1 2022 highlights Significant growth further reduces risk and strengthens the strategic platform Key events NET SALES: ORGANIC NET SALES GROWTH: • A total of 25 acquisitions were completed, of which 8 add-ons, with SEK 6,938m 17% combined net sales of SEK 4,444m and (+140%1) EBITA of SEK 661m • Bon
Slide 9: Market development
Market development A complex macro environment is creating significant business opportunities in the transaction market MACRO TRANSACTION MARKET Fundamentally solid demand in all business High deal flow as a result from areas in Q1 internationalisation and organisational expansion Significant supply
Slide 10: Services
Services ACQUISITION: NITRO CONSULT Continued acquisitions in a turbulent market A market-leading supplier and developer of consulting services for blasting technology, environmental monitoring, and support software in the • As of 1 January 2022, Construction and Infrastructure Nordics. Part of Cont
Slide 11: Trade
Trade ACQUISITION: 2M2 GROUP Solid demand and successful establishment of product focused platforms for synergies and acquisitions A fast-growing distributor of products for the outdoor living environment, including pots, planters, accessories and seasonal items. Part of Home and • New vertical stru
Slide 12: Industry
Industry ACQUISITION: LNS GROUP Strong performance across all verticals despite pricing A global market leader within automation challenges peripherals and services based in Orvin, Switzerland. Part of Automation. NET SALES SEP 2021 (LTM): • Strong underlying market during the quarter • Material pri
Slide 13: Portfolio composition
Portfolio composition Diverse portfolio composition provides a strategic platform for further COMMENT growth • Diversified across many sectors VERTICAL’S SHARE OF GROUP NET SALES IN Q1 2022 • Storskogen’s 20 largest business units are on average 49 years old Services - Installation Services, 11% • L
Slide 14: Significant events after the reporting period
Significant events after the reporting period 18 additional acquisitions and significant pipeline support continued growth with strategic use of equity instruments 12 6 LOIs andLOIs preferred and preferred buyer letters Use of equity and buyerwith letters with an annual EBITA ofEBITA of convertibles
Slide 15: Agenda
Agenda 1. Storskogen in brief 2. Q1 highlights 3. Financial performance 4. Focus –Trade business area 5. Key takeaways 6. Q&A 15
Slide 16: Key financial performance Q1 2022
Key financial performance Q1 2022 Q1 characterised by growth and seasonality COMMENT • Organic sales growth of 17% driven by volume and price increases Q1 Q1 LTM Q1 SEKm 2022 2021 Chg., % 2022 RTM 1) • Organic EBITA growth of 7%, strongest in Industry Net sales 6,938 2,892 140 21,542 29,425 • Higher
Slide 17: Net sales and EBITA margin
Net sales and EBITA margin Profitability-accretive acquisitions and operational improvements COMMENT expected to recover margins in the coming quarters • Strong sales growth driven by acquisitions and organic growth • Recent acquisitions and pipeline with higher margins 10,000 11.3% 12% expected to
Slide 18: Illustrative EBITA growth bridge – pro forma
Illustrative EBITA growth bridge – pro forma RTM EBITA of SEK 3.6bn today and additional pipeline of SEK 0.6bn Illustrative; numbers based on latest annual financials 1 Includes acquisitions completed as per 31 March 2022 2 Includes acquisitions after the end of the reporting period and acquisitions
Slide 19: Financial development – Services
Financial development – Services Weaker Q1 2022 but stable margins around 10% over time COMMENTS • Organic sales growth of 14%, organic EBITA growth of -2% NET SALES AND ADJ. NET SALES AND ADJ. EBITA MARGIN (Q) EBITA MARGIN (LTM) • Sales and EBITA impacted by Covid-19 in Jan-Feb but recovery in Marc
Slide 20: Financial development – Trade
Financial development – Trade Sequentially improved margins and LTM above 10% COMMENTS • Organic sales growth of 20%, organic EBITA growth of 0% NET SALES AND ADJ. NET SALES AND ADJ. EBITA MARGIN (Q) EBITA MARGIN (LTM) • Strong demand and successful price increases, with some delay 11.6% 3,500 14% 1
Slide 21: Financial development – Industry
Financial development – Industry Lower margin quarter-on-quarter, but LTM above 11% COMMENTS • Organic sales growth of 20%, organic EBITA growth of 26% NET SALES AND ADJ. NET SALES AND ADJ. EBITA MARGIN (Q) EBITA MARGIN (LTM) • Significantly higher COGS but largely offset by price increases, with so
Slide 22: Liquidity bridge
Liquidity bridge Solid cash position and cash availability for further growth 22
Slide 23: Operating cash flow and cash conversion
Operating cash flow and cash conversion Higher prices, strong sales and strategically high inventory impacted COMMENTS cash flow in Q1 • Inventory levels continued to be above normal, also inflated by price increases • Receivables significantly higher due to strong sales in 2,000 180% March at highe
Slide 24: Net debt and leverage
Net debt and leverage Leverage of 1.8x means comfortable financial headroom COMMENTS • Interest-bearing net debt of SEK 7.5bn, excluding earn- outs and minority options • Interest-bearing leverage of 1.8x (reflects definition in loan 14,000 2.8 3 terms), below target of 2-3x 2.6 2.6 12,000 2.2 2.2 2
Slide 25: Agenda
Agenda 1. Storskogen in brief 2. Q1 highlights 3. Financial performance 4. Focus –Trade business area 5. Key takeaways 6. Q&A 25
Slide 26: Christer Hansson, EVP and Head of Trade
Christer Hansson, EVP and Head of Trade 26
Slide 27: New Trade verticals
New Trade verticals Business area Trade have changed the verticals from a business model division to focusing on product types or product areas 20211 20222 Sports, Clothing and 8 BUs Accessories Distributors 14 BUs Home and Living 12 BUs Brands 9 BUs Health and Beauty 6 BUs Producers 2 BUs Niche Bus
Slide 28: Agenda
Agenda 1. Storskogen in brief 2. Q1 highlights 3. Financial performance 4. Focus – Trade business area 5. Key takeaways 6. Q&A 28
Slide 29: Key takeaways
Key takeaways Adjusted EBITA growth of 109% with an organic EBITA growth of 7% The first quarter was characterised by growth and seasonality Significant growth further reduces risk and strengthens the strategic platform A complex macro environment is creating significant business opportunities in th
Slide 30: Agenda
Agenda 1. Storskogen in brief 2. Q1 highlights 3. Financial performance 4. Focus – Trade business area 5. Key takeaways 6. Q&A 30
Slide 31: Q&A
Q&A TODAY’S PRESENTERS Daniel Kaplan Lena Glader CEO and co-founder CFO 31