Bellman Group Company presentation Introduction to Bellman Group - - PowerPoint PPT Presentation

Bellman Group

Company presentation

Key facts

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Introduction to Bellman Group

SEK 1,780m

Sales 20191)

SEK 219m

EBITDA 20191)

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Subsidiaries2)

~1,200

Units3)

~900

Subcontractors4)

~400

Employees

• Bellman Group was founded in 2017 through the acquisitions of Bellmans

and Uppländska and has since then made three additional acquisitions

• Bellman Group is a full-service provider of field related works required for

construction of crucial infrastructure and buildings

• Attractive business model with a full suite of ground preparation services

including blasting, excavation, transportation of masses and landfill – with each Bellman Group entity offering unique and complementing capabilities

• Recession resilient business model through exposure to contracyclical

infrastructure market coupled with a flexible cost base due to extant leveraging of subcontractors

• Bellman Group acquired SÅCAB in March 2020, which strengthens the

group’s presence in the Stockholm region, provides a strategically important landfill and recycling facility and increases capacity by approximately 100 units. SÅCAB’s sales 2019 amounted to approximately SEK 185m

Note: All figures presented on this page, unless specified, exclude SÅCAB. 1) Includes figures for Samgräv on a full year basis. EBITDA before items affecting comparability. 2) Includes SÅCAB. 3) Total number of units available to Bellman Group including subcontractor units. Units include, among others, trucks, backhoe loaders, crushers, dumpers, drilling rigs, excavators and wheel loaders. 4) Trucks and machines available through

• subcontractors. Mainly operated by smaller contractors. 5) VSM is also present in Norway. 6) “Other” segment includes material handling and other ancillary services.

67% 18% 15% Stockholm Gothenburg Rest of Sweden

Sales split by geography, 2019

57% 14% 11% 18% Infrastructure Industrial & commercial Housing Other 24% 76% Bellman Group entities Subcontractors

Sales split by entity, 2019 Sales split by market segment6), 2019

5)

• Samgräv is acquired, creating a

permanent presence in the Gothenburg region and an expanded offering including landfill and recycling of masses

• Bellman Group increases outstanding

bond loan by SEK 100m

• Bellman Group is formed

through the acquisitions of Bellmans and Uppländska

• First corporate bond issue of

SEK 220m

• Bellmans, Uppländska

and VSM are founded as independent companies

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50 years track record – Buy and build strategy to continue

• SÅCAB is acquired, providing

the group with its own landfill and recycling facility in the Stockholm region and an increased transportation capacity

• Financed through existing cash
• VSM is acquired, expanding the

group’s geographical presence and substantially growing the group’s machinery segment

• Bellman Group increases
• utstanding bond loan by SEK

280m

1972

• Verdane acquires

Uppländska from Sequent Invest

2016 2017 2018 2019 2020

• Bellman Group has successfully acquired several companies historically to broaden offering

and increase market footprint

• The companies have been integrated into Bellman Group, but operate independently and are

led by each company’s managing director

• Acquisitions have enabled coordination of group functions, realisation of cross-selling

synergies as well as efficiency improvements

• Further add-ons identified, key factor to execute current M&A plan is to remain as an attractive

employer and partner for subcontractors

35% 32% 13% 12% 9% VSM Bellmans Uppländska Samgräv SÅCAB

Sales split by subsidiary1), 2019

Note: 1) Pro forma figures for sales 2019 including acquisition of SÅCAB made in March 2020.

Infrastructure

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Well-positioned to leverage growing underlying market

Industrial & commercial Housing

227 252 273 262 241 229 2015 2016 2017 2018 2019E 2020E 147 156 168 185 190 189 2015 2016 2017 2018 2019E 2020E 94 91 91 96 100 104 2015 2016 2017 2018 2019E 2020E

• Historical housing construction in Sweden

declined in recent years due to introduction of comprehensive credit restrictions

• Housing deficit in the Stockholm, Gothenburg

and Malmö regions combined with forecasted population growth drives long-term housing need

• Shortage of commercial and industrial

properties expected to drive future investments

• Further need for investments driven by

forecasted population growth in metropolitan areas

• Infrastructure investments expected to increase

rapidly based on Trafikverket’s current implementation plan

• Public investments forecasted to shift

somewhat from road construction to railway investments

SEKbn CAGR 0.2% SEKbn CAGR 5.1% CAGR 2.0% SEKbn

~71% of Bellman Group sales 2019

During economic downturns, governments tend to maintain infrastructure expenditures to drive the economy, creating recession resilient market fundamentals for Bellman Group

Source: The Swedish Construction Federation, October 2019.

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Diversified service offering – Full suite of ground preparation services

Construction projects

• Excavation and filling of soil

and earth during construction projects

• Full-scale offering in terms
• f machinery size with

group entities serving different needs

• Provides both operators

and machinery

Excavation and machine work1)

Hour and volume-based compensation

Transportation

• f masses2)
• Transportation of rock,

gravel, soil and masses generated in earthwork services

• Provides both drivers

and vehicles

• Handling of both

contaminated and non- contaminated masses Hour and volume-based compensation

Blasting

• Core offering comprises

blasting for construction – in any environment

• Experts on cautious blasting

in urban and sensitive areas

• Offering also includes

substitute services such as wire sawing and rock reinforcement Majority volume-based compensation

Landfill, recycling and mass handling

• Landfill or recycling of

masses, waste and rubble from construction sites and

• ther field works
• Recycled rubble or other

waste sold to third parties Volume-based compensation

Note: 1) Includes all machinery on construction sites, chorusing plants and transportations of machinery. 2) Includes external material and landfill (reimbursement for external material transported).

24% 76% Bellman Group entities Subcontractors

78%

Bellman has a risk-mitigating business model… …serving as a partner rather than competitor to leading construction companies

Risk-mitigating profile with focus on volume and low risk projects

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Subcontractors

% of sales % of sales

Project portfolio

…and 85% of sales in high growth regions such as Stockholm and Gothenburg Low exposure to individual projects…

• Leading construction company customer segment comprises individual divisions within

each company, thus exposure toward the leading construction companies is even lower than indicated

• Bellman Group aims for low project risk and avoids low profitability “prestige” projects
• Exposure to infrastructure projects coupled with risk-mitigating business model characteristics

and low project risk focus further enhances recession resilience Contract type Subcontractors Project contract 65% 34%

Sales per customer segment, 2019

Leading construction companies Municipalities Other construction companies

2%

Project risk Low High Leading construction companies

Compensation per hour or volume ensures safeguarding of profitability and implies a substantially lower risk compared to compensation per project

Compensation per unit

PAY-PER- UNIT BUSINESS MODEL

Note: All figures presented on this page, unless specified, exclude SÅCAB.

High use of subcontractors leads to well-balanced

• perational leverage

The 8 largest projects represent 22% of sales

Exploit current and add new capabilities within landfill segment Continue to gain market shares across all segments Several large coming infrastructure projects in the near term Execute on existing M&A pipeline

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2019A 2023E

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Key initiatives going forward

Landfill expansion with opening of new facilities key focus going forward, further enabled through acquisition of SÅCAB. Significantly higher EBITDA margin potential than transportation segment Transportation and excavation segments expected to gain further market shares through attracting new drivers as well as improved negotiation position towards customers with the landfill expansion Stockholm area has a project pipeline with a total value of c. SEK 12.5bn, including e.g. Förbifart Stockholm (road) and Citybanan (railway). Gothenburg area has a project pipeline with a total value of c. SEK 3.5bn including e.g. Västlänken (tunnel, railway) and Eriksberg (railway) Strong brand recognition and successful historical track record paves the way for further M&A

• transactions. Several potential add-ons already

identified

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Bellman Group AB info@bellmangroup.se

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