Bellman Group Company presentation
Introduction to Bellman Group Key facts Sales split by geography, 2019 SEK 1,780m SEK 219m 5 Sales 2019 1) EBITDA 2019 1) Subsidiaries 2) 15% 18% 67% ~1,200 ~900 ~400 Units 3) Subcontractors 4) Employees Stockholm Bellman Group was founded in 2017 through the acquisitions of Bellmans • Gothenburg and Uppländska and has since then made three additional acquisitions Rest of Sweden 5) Bellman Group is a full-service provider of field related works required for • Sales split by entity, 2019 Sales split by market segment 6) , 2019 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 18% 24% each Bellman Group entity offering unique and complementing capabilities 11% Recession resilient business model through exposure to contracyclical 57% • 14% infrastructure market coupled with a flexible cost base due to extant 76% leveraging of subcontractors Bellman Group acquired SÅCAB in March 2020, which strengthens the • Infrastructure group’s presence in the Stockholm region, provides a strategically Bellman Group entities Industrial & commercial important landfill and recycling facility and increases capacity by Subcontractors Housing approximately 100 units. SÅCAB’s sales 2019 amounted to approximately Other 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 2 subcontractors. Mainly operated by smaller contractors. 5) VSM is also present in Norway. 6) “Other” segment includes materia l handling and other ancillary services.
50 years track record – Buy and build strategy to continue VSM is acquired, expanding the SÅCAB is acquired, providing • • group’s geographical presence the group with its own landfill and substantially growing the and recycling facility in the • Verdane acquires group’s machinery segment Stockholm region and an Uppländska from increased transportation Sequent Invest • Bellman Group increases capacity outstanding bond loan by SEK 280m Financed through existing cash • 1972 2016 2017 2018 2019 2020 Samgräv is acquired, creating a • • Bellman Group is formed permanent presence in the Gothenburg through the acquisitions of • Bellmans, Uppländska region and an expanded offering including Bellmans and Uppländska and VSM are founded as landfill and recycling of masses independent companies First corporate bond issue of • • Bellman Group increases outstanding SEK 220m bond loan by SEK 100m Sales split by subsidiary 1) , 2019 • Bellman Group has successfully acquired several companies historically to broaden offering and increase market footprint 9% VSM • The companies have been integrated into Bellman Group, but operate independently and are 12% 35% led by each company’s managing director Bellmans • Acquisitions have enabled coordination of group functions, realisation of cross-selling Uppländska 13% synergies as well as efficiency improvements Samgräv • Further add-ons identified, key factor to execute current M&A plan is to remain as an attractive SÅCAB 32% employer and partner for subcontractors Note: 1) Pro forma figures for sales 2019 including acquisition of SÅCAB made in March 2020. 3
Well-positioned to leverage growing underlying market Infrastructure Industrial & commercial Housing SEKbn SEKbn SEKbn CAGR 2.0% CAGR 5.1% CAGR 0.2% 273 104 190 189 185 262 252 241 168 100 229 227 156 96 147 94 91 91 2015 2016 2017 2018 2019E 2020E 2015 2016 2017 2018 2019E 2020E 2015 2016 2017 2018 2019E 2020E ~71% of Bellman Group sales 2019 Infrastructure investments expected to increase Shortage of commercial and industrial Historical housing construction in Sweden • • • rapidly based on Trafikverket’s current properties expected to drive future investments declined in recent years due to introduction of implementation plan comprehensive credit restrictions Further need for investments driven by • Public investments forecasted to shift forecasted population growth in metropolitan Housing deficit in the Stockholm, Gothenburg • • somewhat from road construction to railway areas and Malmö regions combined with forecasted investments population growth drives long-term housing During economic downturns, governments tend need to maintain infrastructure expenditures to drive the economy, creating recession resilient market fundamentals for Bellman Group Source: The Swedish Construction Federation, October 2019. 4
Diversified service offering – Full suite of ground preparation services Construction projects Blasting Excavation and Transportation Landfill, recycling machine work 1) of masses 2) and mass handling Majority volume-based Hour and volume-based Hour and volume-based Volume-based compensation compensation compensation compensation • Core offering comprises • Excavation and filling of soil • Transportation of rock, • Landfill or recycling of blasting for construction – in and earth during gravel, soil and masses masses, waste and rubble any environment construction projects generated in earthwork from construction sites and services other field works • Experts on cautious blasting • Full-scale offering in terms in urban and sensitive areas of machinery size with • Provides both drivers • Recycled rubble or other group entities serving and vehicles waste sold to third parties • Offering also includes different needs substitute services such as • Handling of both wire sawing and rock • Provides both operators contaminated and non- reinforcement and machinery contaminated masses 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). 5
Risk-mitigating profile with focus on volume and low risk projects …serving as a partner rather than competitor to leading Bellman has a risk-mitigating business model… construction companies Sales per customer segment, 2019 % of sales High use of subcontractors leads to well-balanced Subcontractors operational leverage Bellman Group 24% entities Project contract Subcontractors Leading 65% 76% 34% construction companies Contract type Compensation per unit 2% Subcontractors Compensation per hour or PAY-PER- Leading construction companies volume ensures safeguarding of UNIT profitability and implies a Municipalities BUSINESS substantially lower risk compared Other construction companies MODEL to compensation per project Low High % of sales Project risk Low exposure to Project portfolio individual projects… The 8 largest Leading construction company customer segment comprises individual divisions within • projects represent each company, thus exposure toward the leading construction companies is even lower 22% of sales than indicated 78% …and 85% of sales in high • Bellman Group aims for low project risk and avoids low profitability “prestige” projects growth regions such as Stockholm and Gothenburg Exposure to infrastructure projects coupled with risk-mitigating business model characteristics • and low project risk focus further enhances recession resilience Note: All figures presented on this page, unless specified, exclude SÅCAB. 6
Key initiatives going forward 4 1 Landfill expansion with opening of new facilities key Execute on existing focus going forward, further enabled through M&A pipeline acquisition of SÅCAB. Significantly higher EBITDA 3 margin potential than transportation segment Several large coming infrastructure Transportation and excavation segments expected 2 projects in the to gain further market shares through attracting new 2 near term drivers as well as improved negotiation position towards customers with the landfill expansion Continue to gain market shares across all 3 Stockholm area has a project pipeline with a total segments 1 value of c. SEK 12.5bn, including e.g. Förbifart Stockholm (road) and Citybanan (railway). Exploit current and Gothenburg area has a project pipeline with a total add new value of c. SEK 3.5bn including e.g. Västlänken capabilities within landfill segment (tunnel, railway) and Eriksberg (railway) Strong brand recognition and successful historical 4 track record paves the way for further M&A transactions. Several potential add-ons already identified 2023E 2019A 7
Bellman Group AB info@bellmangroup.se 8
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