A long-term owner of profitable, small and mid-sized European businesses July 2019
The Röko team has EUR 270m in committed capital Our background CEO and co-founder Chairman and co-founder Deputy CEO Born Born Born 1963 • 1962 • 1989 • Education Education Education • MSc in Engineering • BSc in Accounting and • MSc in Business Physics (KTH Teknisk Administration Finance (Stockholm Fysik) School of Economics) (Stockholm School of Economics) • MSc in Business Tomas Billing Fredrik Karlsson Johan Bladh Administration • Sweden-America (Stockholm School of Foundation Scholarship Economics) to Luther College, USA Experience Experience Experience CEO of Nordstjernan 1999-2019 • CEO of Lifco 1998-2019 • Private Equity (Bridgepoint, BC Partners, Altor) • 2015-2019 • Co-owner and board member of the Hjertmans • Chairman of NCC 2001-Present group. Board member of the German-Swedish • Management consultant at BCG 2014-2015 • Co-owner and board member of the Hjertmans Chamber of Commerce group. Board member of Centrum för rättvisa • CEO of Mercatura 1993-1998 and Parkinson Research Foundation CEO of Hufvudstaden 1997-1999 • Management consultant at BCG 1988-1992 • • CEO of Monark Bodyguard 1994-1996 | – 2
Röko’s differentiators 60 60 years of combined investment experience Perpetual investment horizon – Röko never sells an investment. Röko is a company, not a fund. 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 Open for co-ownership | – 3
Röko looks for niche market leaders Investment criteria Established or potential market leader in a niche Long track record of profitability – EBITA margin of 10% or more Reasonable valuation Main focus on asset light companies with EBITA of EUR 2-10m 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 | – 4
Röko’s principles • Has a long-term perspective on value creation Long-term • Intention to never sell a company • Uncompromisable code of conduct • Empowers managers by giving them room to grow Decentralised • Fosters entrepreneurship and drives employee engagement • Decisions are taken close to businesses • Relentless focus on profits Profitable • Incentives based on profits and capital employed • Competitive spirit within the organisation • Believes in high ethical standards Sustainable • Invests in companies with a future in a sustainable world | – 5 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 • Continuous monitoring and optimisation of prices Pricing in focus • Focus on customers with potential for sustainable profit growth • Long-term view on career development and personal growth Motivated managers • Compensation tied to performance • Management changed when required • Focus on value adding operations Lean organisation • Outsourced non-core functions • Minimised bureaucracy • Investments in product development, geographical expansion and Value creating investments expanded sales organisation | – 6
Lifco – 100 times the money in 20 years Total shareholder return – compared to the 5 Swedish listed large caps with the best return over 20 years (1) Relative performance Index 100 = January 1999 Annual return (over 20 years) 20,000 Lifco 28.5% 18,000 16,000 Sweco 27.1% 14,000 12,000 Betsson 26.4% 10,000 8,000 Wallenstam 26.5% 6,000 4,000 NIBE 24.5% 2,000 0 Elekta 24.0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Lifco (2) Sweco Betsson Wallenstam NIBE Elekta | – 7 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
Nordstjernan – more than twice the stock market over 20 years NAV development (1) Relative performance (1) EURbn (rebased to Nordstjernan) NAV development L20Y (average annual) 4.0 17.9% Öresund 3.5 13.7% Nordstjernan 3.0 Latour 13.1% 2.5 12.7% Lundbergs 2.0 10.3% Kinnevik (2) 1.5 1.0 Investor 9.0% 0.5 SIX Return Index 8.5% 0.0 7.4% Industrivärden 1998 2004 2010 2016 Nordstjernan Nordstjernan peers (average) SIX Return Index | – 8 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)
Arboritec – Röko’s first investment 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 owner 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 | – 9 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
Contact information 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 | – 10 1) Johan Bladh will start his employment at Röko by 21 September 2019 the latest
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