COMPANY PRESENTATION November 23, 2017 Strictly private and confidential
Todays presenters JAKOB HOLM, CEO CARL JOHAN ÅKESSON, CFO • Joined Sdiptech in 2015 • Joined Sdiptech in 2014 • Holds 100,000 ordinary shares and • Holds 266,749 ordinary shares and 150 preference shares 1,040 preference shares • Background: CFO Mediaplanet • Background: Axholmen (founder), International, EF Education, Modern General Electric, Accenture Times Group • Education: M.Sc. in Systems • Education: M.Sc. in Accounting & Engineering at KTH Royal Institute of Managerial Finance from Stockholm Technology School of Economics 2
Agenda • Sdiptech in brief • Current situation and run-rate • Acquisitions • Summary • Q & A 3
NICHE ENGINEERING FOR URBAN INFRASTRUCTURES Growing city infrastructures - continuous need to develop and maintain • MARKET • Stockholm main market - opportunity in additional urban areas in Europe OPERATING Strong niches - businesses with documented history of profitability • MODEL • Decentralized - preserve entrepreneurial spirit, decision making closest to customer GROWTH Acquisitions to add additional niched products and services in our core market • STRATEGY • SEK 500 million in capital injection in May 2017 to finance growth Add 90 MSEK acquired EBITA on a yearly average, 5-10 % organic yearly growth • GOALS Continue on set path and pace and reach SEK 600-800 million EBITA in 2021 • 4 4
Sdiptech in brief Core business of niched services and products for urban infrastructures Tailored installations Niche Products & Services Elevators (local) Electrical power quality Renovation and service Percent of EBITA * Percent of EBITA * Elevators (global) New installations Shell completion Cooling 34% 66% Vibration monitoring Uninterrupted power supply Gas evacuation Wastewater treatment No of employees 519 No of employees 246 District heating and water metering * * Electrical automation 8,1% 22,2% EBITA margin EBITA margin Water cleaning Roof maintenance *) Excluding central units. RTM. 5
Sdiptech in brief Management and board Management Board of Directors Shares: Shares: JAKOB HOLM ASHKAN POUYA 266,749 (Class B), 1,040 (Pref) 1,000,000 (Class A), 5,835,383 (Class B)* CEO Chairman Experience: Experience: Axholmen, General Electric, Accenture Serendipity Ixora, Serial enrepreneur M.Sc. KTH Royal Institute of Technology B.A. Business Administration Shares: JOHNNY ALVARSSON 18,200 (Class B) Shares: CARL JOHAN ÅKESSON Board Member Experience: 100,000 (Class B), 150 (Pref) Indutrade, Elektronikgruppen, Zeteco CFO Experience: M.Sc. Linköping University Institute of Technology Mediaplanet, EF, MTG M.Sc. Stockholm School of Economics Shares: JAN SAMUELSON 91,000 (Class B) Board Member Experience: Shares: FREDRIK SEDERHOLM Resurs Bank, Accent Equity Partners 88,888 (Class B) M.Sc. Stockholm School of Economics President, Experience: Assemblin, Caverion, Otis Elevator Tailored installations Shares: M.Sc. Business Eonomics, Stockholm University KATARINA LUNDBLAD PINNEKAMP 9,090 (Class B) Board Member Experience: ABB, Exeger M.Sc. in Material Science Shares: FREDRIK NAVJORD 18,180 (Class B) President, Experience: Shares: SAEID ESMAEILZADEH Metric, Addtech, Volvo Niched products & services 1,000,000 (Class A), 5,835,383 (Class B)* M.Sc. Chalmers University of Technology Board Member Experience: Seredipity Ixora, Serial entrepreneur Ph.D. in Materials Chemistry Shares: Shares: KAMJAR HAJABDOLAHI MIKAEL LÖNN 46,700 (Class B), 12,349 (Pref) 169,215 (Class B) Head of acquisitions Experience: Board Member Experience: Orbion Consulting, Webbentus Serial entrepreneur Master of Law (LL.M.) Uppsala University B.A. Stockholm University and M.D. Karolinska Institutet *) Through Serendipity Group AB 6
Agenda • Sdiptech in brief • Current situation and run-rate • Acquisitions • Summary • Q & A 7
Current situation and run-rate Prevailing market conditions and a build-up in central costs lower margins, but good long term support in solid growth in sales SALES, Run-rate EBITA, Run-rate • Lower margins in Tailored Installations in prevailing, high • Growth in run-rate sales on a quarterly basis, coming from intensity, market conditions both acquisitions and organic growth (2017 YTD 10,4 %). – Higher completion costs in delivery due to increased staff turnover, • Overall solid demand for the Group’s offerings, especially and a reduced capital allocation to the renovation sector for Niched Products & Services. • Building central costs for future growth • Additionally, shell completion margin squeeze with similar dynamics as Tailored Installations 8
Current situation and run-rate An expected cooling of the market for new housing in Stockholm should have a limited effect on Sdiptech’s overall earnings Share of EBITA RTM New housing Stockholm – low portion of EBITA International 4% • Sdiptech’s EBITA -exposure to the new housing market in 25% Stockholm is approx. 12%. Not insignificant, but limited. Stockholm 12% • A cooling of the new housing market is likely to result in 75% an over-supply with some pressure on prices in the sector. • Long term, the shortage of housing remains in Stockholm as population is expected to continue grow. New installation - Other 16% 14% housing Support for less cyclical earnings • New housing and population growth leads to follow-on investments in city infrastructures, municipalities and Service, 29% commercial properties, areas where Sdiptech can maintenance, capitalize. renovation 41% • Currently under- investment in Sdiptech’s market for maintenance and renovation, as property owners New installation - prioritize investments in new installation at the expense infrastructure, of existing property stock. municipality and commercial properties 9
Agenda • Sdiptech in brief • Current situation and run-rate • Acquisitions • Summary • Q & A 10
Acquisitions Successful M&A execution in the micro/small cap space Solid acquisition activity… …at attractive multiples SEK million 2 1 5 7 6 Closed SPREAD LOW HIGH 1 5 LOI 90 Average 4.6 8.3 EV/EBITA 2017 3 EV/EBITA 3 2013-2016 2017 Weighted 6.0 6.1 Average 5.7 5.8 41 2 34 Target size, SEKm 2013-2016 2017 14 13 EBITA (average) 3 10 7 2013 2014 2015 2016 2017 Acquired EBITA (LFY) # of acquisitions 1) Letter of Intent signed for transaction 2) Completed transactions. 3) EV at transaction based on flat growth during earn-out. Excl. transaction for ST Liftsystems in early phase with EBITA at zero. 11
Acquisitions Proven ability to convert internally generated leads to acquisitions 2014 2015 2016 Snap shot 2017 (YTD Nov 15th) Early stage M&A team established Proven acquisition strategy Nov 15 th Initial Contact: ~25 Initial Contact: ~160 Initial Contact: ~300 Initial Contact: ~290 First meetings: 5 ~315 First meetings: ~40 Bid discussions: 3 Bid discussions: First meetings: ~90 First meetings: ~80 ~20 LOIs signed: 1 LOIs signed: Acquired: 1 6 Bid discussions: Bid discussions: ~10 ~35 ~30 Acquired: 5 LOIs signed: 5* LOIs signed: 11 9 Acquired: 7 Acquired: 6 TOTAL: ~330 The methodology and capacity to acquire, unchanged at a high level *) Time from LOI to Closing varies between one to two quarters, progress and current status varies across cases Acquisitions can be cancelled for many reasons. To avoid deviations between expectations and outcome no EBITA numbers are provided. 12
Acquisitions Six acquisitions completed in 2017 totaling 34mSEK in EBITA contribution Revenue EBIT Closing Business Acquisition Description LFY* LFY* 2017 area (mSEK) (mSEK) Topas Vatten AB, Q1 Design, installation and service of small waste water treatment plants 33 5.5 Tailored • Topas Vatten Service AB Clean water a focus area. Market for water and air purification is installations • expected to increase as more stringent environmental regulations are introduced. Aufzüge Friedl Gmbh Q2 Installation and service of elevators in Vienna, Austria 70.8 7.2 Tailored • Expansion of elevator business to a new geography and growing urban installations • area ST Liftsystems Gmbh Q2 • Design and manufacture of elevators. Compact design suitable for the ~0 0 Tailored modernization market. Early phase. installations • Complement our global elevator offering with an export product AVA Monitoring AB Q3 • Automated and cloud-based measurement systems for monitoring of 27.8 5.7 Niche vibration and noise in infrastructure projects Products & • Strengthened presence in vibration monitoring and a growing demand on Services export markets Tello Services Partner AB Q4 Roof repainting and installation of personal protection on roofs 32.2 10.0 Tailored • Focus on renovation creates low-cyclical revenue over time installations • Polyproject Environment AB Q4 Bespoke components, systems and facilities for cleaning contaminated 38.6 5.9 Niche • liquids, gases and water Products & Expanding our area for Clean water Services • Total EBITA: 34 *) Last fiscal year. 2015 for Topas Vatten AB and Topas Vatten and Service AB, 2016 for later acquisitions. 13
Agenda • Sdiptech in brief • Current situation and run-rate • Acquisitions • Summary • Q & A 14
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