Q3 2019 Presentation October 25, 2019 Third quarter Q3 2019 In - - PowerPoint PPT Presentation

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Q3 2019 Presentation October 25, 2019 Third quarter Q3 2019 In - - PowerPoint PPT Presentation

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Q3 2019 Presentation October 25, 2019 Third quarter Q3 2019 In Brief Sales up +17% o Weaker underlying demand sequentially and year-on-year o However, order intake in line with sales o Only slightly positive organic growth, driven by

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SLIDE 1

Q3 2019 Presentation

October 25, 2019

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SLIDE 2

Third quarter

Q3 2019 In Brief

  • Sales up +17%
  • Weaker underlying demand sequentially and year-on-year
  • However, order intake in line with sales
  • Only slightly positive organic growth, driven by increased market share
  • Operating profit improved +10% over strong comparables
  • Lower gross margin, but also lower percentage of operating expenses
  • Increased operating profit contributed by good development of acquired companies
  • International: some organic growth,

but operating profit down over strong comparables

  • Sweden: negative organic growth,

but operating profit up due to acquisitions and good cost control

  • Good contribution from acquisitions, work on pipeline continues
  • Strong cash flow
  • Continued focus on share gain, “Leadership” strategy, as well as
  • pportunities and challenges in a weaker market

2

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SLIDE 3

EBITA Q3 2018 81 Currencies

  • 2

Volume +2 Price/cost/mix/other

  • 4

Acquisitions +12 EBITA Q3 2019 89

3

Third quarter

Financial highlights, Group

Quarter 3 Δ Jan-Sep Δ SEK million 2019 2018

%

2019 2018

%

Order intake 1,042 893

17

3,206 2,816

14

Net sales 1,044 895

17

3,223 2,820

14

Gross profit 279 259

8

886 817

8 % 26.7 28.9 27.5 29.0

Operating expenses

  • 191
  • 178

7

  • 575
  • 532

8 % 18.3 19.9 17.8 18.9

Operating profit (EBITA) 89 81

10

311 285

9 % 8.5 9.1 9.6 10.1

Net profit 59 51

15

214 193

11

Operating cash flow 122 50

144

255 112

127

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SLIDE 4

Financial development, Group

5 10 15 20 25

Percent

Quarterly Net Sales growth

Organic growth Acquisitions and currency translation

50 100 150 200 250 300 350 400 450 500 1000 1500 2000 2500 3000 3500 4000 4500

LTM EBITA, SEK million LTM Net Sales, SEK millions Net Sales EBITA 4

Third quarter

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SLIDE 5

Third quarter

Segment International

▪ Net sales grew by 5%, whereof 2% organic ▪ Somewhat lower underlying demand and increased market share ▪ Gross margin down to 29.3%, mainly due to weaker mix compared to strong quarter last year ▪ Continued investment in strategic areas EBITA Q3 2018 73 Currencies +2 Volume +5 Price/cost/mix/other

  • 11

Acquisition EBITA Q3 2019 69

5 Quarter 3 Δ Jan-Sep Δ SEK million 2019 2018

%

2019 2018

%

Order intake 673 658

2

2,123 1,980

7

Net sales 676 647

5

2,137 1,971

8

Gross profit 198 197

1

632 591

7 % 29.3 30.4 29.6 30.0

Operating expenses

  • 129
  • 124

4

  • 399
  • 369

8 % 19.1 19.2 18.7 18.7

Operating profit (EBITA) 69 73

  • 6

233 222

5 % 10.2 11.3 10.9 11.3

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SLIDE 6

Third quarter

Financial development, International

50 100 150 200 250 300 350 500 1000 1500 2000 2500 3000 3500

LTM EBITA, SEK million LTM Net Sales, SEK millions Net Sales EBITA

5 10 15 20 25 30 35

Percent

Quarterly Net Sales growth

Organic growth Acquisitions and currency translation 6

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SLIDE 7

▪ Net sales up by 48%, all contributed by latest 2 acquisitions ▪ Organic growth -4%: Lower underlying demand and unchanged market share ▪ Gross margin down year-on-year, fully attributable to acquisitions (adjusted for acquisitions, gross margin was 27.3% (27.0)) ▪ EBITA improvement due to acquisitions and good cost control ▪ Focus on price, sourcing savings and cost control going forward

EBITA Q3 2018 22 Currencies

  • 4

Volume

  • 2

Price/cost/mix/other +5 Acquisition +7 EBITA Q3 2019 28

Segment Sweden

7

Third quarter

Quarter 3

Δ

Jan-Sep

Δ

SEK million 2019 2018

%

2019 2018

%

Order intake 369 235

57

1,083 836

30

Net sales 368 248

48

1,087 849

28

Gross profit 87 67

30

271 243

12 % 23.7 27.0 24.9 28.6

Operating expenses

  • 59
  • 45

31

  • 168
  • 144

16 % 16.0 18.1 15.4 17.0

Operating profit (EBITA) 28 22

28

103 99

4 % 7.6 8.9 9.5 11.7

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SLIDE 8

Third quarter

Financial development, Sweden

  • 10

10 20 30 40 50 60

Percent

Quarterly Net Sales growth

Organic growth Currency translation effects and acquisition

50 100 150 200 500 1000 1500 2000 LTM EBITA, SEK million

LTM Net Sales, SEK millions Net Sales EBITA 8

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SLIDE 9

Third quarter

Gross margin development

9 22% 24% 26% 28% 30% 32% Q4 18 Q1 19 Q2 19 Q3 19

Segment Sweden GP%-development

Segment Sweden, excl. Rudhäll and HT Bendix Segment Sweden, as reported 22% 24% 26% 28% 30% 32% Q4 18 Q1 19 Q2 19 Q3 19

Group GP%-development

Group, excl. Rudhäll and HT Bendix Group, as reported

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SLIDE 10

Third quarter

Challenges and opportunities in a weaker market

10

  • Adapt cost base to

weaker underlying growth…

  • …while continuing

investment in Leadership 2020

  • → more focus on

improving internal efficiency

Challenges

  • Customers more

focused on efficiency → new business leads

  • Low demand for

suppliers → sourcing savings

  • Some competitors

challenged or failing

  • Potentially, more

acquisition candidates

Opportunities

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SLIDE 11

Third quarter

Acquisitions since 2014

11

Acquisition of HT BENDIX A/S in Denmark in June/July ▪ Strong complement to existing business in the Nordics ▪ Annual sales of SEK ~500m ▪ EBITA margin approximately 10%

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SLIDE 12

Third quarter

EBITA Bridge

12 Group International Sweden Other EBITA Q3 2018 81 73 22

  • 14

Currency .-2 +2

  • 4

Volume +2 +5

  • 2

Price/cost/mix/other

  • 4
  • 11

+5 +2 Acquisitions +12 +7 +4 EBITA Q3 2019 89 69 28

  • 8

Group International Sweden Other EBITA YTD 2018 285 222 99

  • 36

Currency +3 +7

  • 4

Volume +37 +40

  • 3

Price/cost/mix/other

  • 29
  • 36

.-2 +9 Acquisitions +14 +12 +2 EBITA YTD 2019 311 233 103

  • 25
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SLIDE 13

Outlook

Summary and outlook

Q3 2019 in summary

  • Continued execution of strategy, and investments in Leadership
  • Lower underlying demand in both segments than earlier this year ➔
  • nly slight organic growth despite increased market share

However, order intake in line with sales

  • Improved net sales, operating profit and net profit
  • Strong cash flow

Outlook

  • Market situation brings challenges, but also many opportunities

(e.g. new business, sourcing, acquisitions)

  • Priorities going forward
  • Continued market share gains
  • Continued investment in “Leadership 2020”;

more focus on implementation & results, e.g. sourcing savings, efficiency

  • Capture opportunities in weaker market; adapt cost to lower demand
  • Confidence in continued good development despite slower market

13

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SLIDE 14

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Q&A