A long-term owner of profitable, small and mid-sized European - - PowerPoint PPT Presentation

A long-term owner of profitable, small and mid-sized European businesses

July 2019

Deputy CEO Born

• 1989

Education

• BSc in Accounting and

Finance (Stockholm School of Economics) Experience

• Private Equity (Bridgepoint, BC Partners, Altor)

2015-2019

• Management consultant at BCG 2014-2015

The Röko team has EUR 270m in committed capital

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Our background CEO and co-founder Born

• 1962

Education

• MSc in Engineering

Physics (KTH Teknisk Fysik)

• MSc in Business

Administration (Stockholm School of Economics) Experience

• CEO of Lifco 1998-2019
• Co-owner and board member of the Hjertmans
• group. Board member of the German-Swedish

Chamber of Commerce

• CEO of Mercatura 1993-1998
• Management consultant at BCG 1988-1992

Fredrik Karlsson Chairman and co-founder Born

• 1963

Education

• MSc in Business

Administration (Stockholm School of Economics)

• Sweden-America

Foundation Scholarship to Luther College, USA Experience

• CEO of Nordstjernan 1999-2019
• Chairman of NCC 2001-Present
• Co-owner and board member of the Hjertmans
• group. Board member of Centrum för rättvisa

and Parkinson Research Foundation

• CEO of Hufvudstaden 1997-1999
• CEO of Monark Bodyguard 1994-1996

Tomas Billing Johan Bladh

Röko’s differentiators

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Focus on simplicity and speed in decision making Decentralised business model – all decisions are made at company level and the intention is to never move a company Perpetual investment horizon – Röko never sells an investment. Röko is a company, not a fund. 60 years of combined investment experience Open for co-ownership

60

Röko looks for niche market leaders

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Investment criteria

Reasonable valuation Main focus on asset light companies with EBITA of EUR 2-10m Long track record of profitability – EBITA margin of 10% or more Established or potential market leader in a niche Headquartered in Europe

• Röko has 60 years of combined investment experience and a large network from which to source potential transactions
• The transaction process will be characterised by simplicity and swiftness with focus on material aspects and significant involvement from management

Röko’s principles

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• Has a long-term perspective on value creation
• Intention to never sell a company
• Uncompromisable code of conduct

Long-term

• Relentless focus on profits
• Incentives based on profits and capital employed
• Competitive spirit within the organisation

Profitable

• Empowers managers by giving them room to grow
• Fosters entrepreneurship and drives employee engagement
• Decisions are taken close to businesses

Decentralised

• Believes in high ethical standards
• Invests in companies with a future in a sustainable world

Sustainable

For an interview with Fredrik Karlsson please visit: https://www.di.se/ditv/ekonomistudion/han-fick-sparken-som-lifcos-vd---nu-talar-karlsson-ut/

Simple levers for value creation applied consistently

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• Investments in product development, geographical expansion and

expanded sales organisation Value creating investments

• Continuous monitoring and optimisation of prices
• Focus on customers with potential for sustainable profit growth

Pricing in focus

• Focus on value adding operations
• Outsourced non-core functions
• Minimised bureaucracy

Lean organisation

• Long-term view on career development and personal growth
• Compensation tied to performance
• Management changed when required

Motivated managers

Lifco – 100 times the money in 20 years

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2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Lifco Sweco Betsson Wallenstam NIBE Elekta

Source: FactSet, financial reports 1) Selection based on total shareholder return development January 1999-December 2018 of the 6 best performing large cap shares on the Swedish Stock Exchange 2) Lifco’s total return development between buy-out and IPO has been assumed to be linear and has been adjusted for shareholder distributions and contributions (2)

Index 100 = January 1999

Total shareholder return – compared to the 5 Swedish listed large caps with the best return over 20 years Relative performance

(1)

Annual return (over 20 years)

28.5% 27.1% 26.4% 26.5% 24.5% 24.0% Lifco Sweco Betsson Wallenstam NIBE Elekta

17.9% 13.7% 13.1% 12.7% 10.3% 9.0% 8.5% 7.4%

Nordstjernan – more than twice the stock market over 20 years

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Source: Financial reports 1) NAV development is calculated on a per share basis with reinvested dividends 2) CAGR for Kinnevik refers to development post merger with Invik (i.e. 2005 first full year)

NAV development(1)

NAV development L20Y (average annual)

Nordstjernan Latour Lundbergs Kinnevik(2) Investor Industrivärden Öresund SIX Return Index

Relative performance(1)

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 1998 2004 2010 2016 Nordstjernan Nordstjernan peers (average) SIX Return Index

Arboritec – Röko’s first investment

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1) Through Arboritec Holding AB which will acquire 100% of the shares in Arboritec AB and Arboritec USA Inc. Röko will hold 80% of the shares in Arboritec Holding AB

About the acquisition Products

Transaction and rationale

• In June 2019, Röko agreed to acquire 80% of the shares in Arboritec(1)
• Arboritec is indirectly owned by the founder Jörgen Kaldemark who will remain as
• wner of a 20% minority stake
• Although Arboritec is somewhat smaller than Röko’s sweetspot and not the leader

within its market, Röko finds Arboritec to be a well-run highly profitable and growing company with a strong product portfolio About Arboritec

• Founded in 1999 and based in Jörlanda, north of Gothenburg
• Primarily manufactures protective coatings for hardwood and resilient floors
• Has a turnover exceeding EUR 3m with good profitability

Contact information

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Tomas Billing, Chairman E-mail: tomas@roko.se Fredrik Karlsson, CEO E-mail: fredrik@roko.se Johan Bladh, Deputy CEO(1) E-mail: johan@roko.se

1) Johan Bladh will start his employment at Röko by 21 September 2019 the latest