INTERIM REPORT JANUARY – MARCH 2019 Strictly private and confidential May 3, 2019
Today’s presenters JAKOB HOLM, CEO BENGT LEJDSTRÖM, CFO • • Joined Sdiptech in 2014 Joined Sdiptech in 2018 • • Holds 258,749 ordinary shares, 1,040 Holds 45,200 ordinary shares, 2,500 preference shares, 189,000 buy options preference shares, 57,600 buy options • • Background: Axholmen (founder), Background: CFO Lagercrantz Group, General Electric, Accenture Intrum Justitia, Acando • • Education: M.Sc. in Systems Education: M.Sc. in Business Economics from Stockholm School of Engineering from KTH Royal Institute of Economics Technology 2
Today’s presentation LONG-TERM TRENDS IN OUR MARKETS NEW BUSINESS AREAS CURRENT TRADING 3
Aging infrastructure and a need to rebuild ■ ■ Urbanization increases shortage & strain Capacity requirements continue to grow ■ UNDER-INVESTMENTS DRIVE LONG-TERM VOLUME DEMAND ■ Investment priority for nations worldwide
We expect and demand increasing ■ Sustainability, Efficiency & Safety Consumer expectations rise ■ Policy-makers adapt with regulations ■ Implemented in infrastructure ■ A STRIVE FOR BETTER SOCIETIES DRIVES TECHNICAL IMPROVEMENTS Specialists and niche companies ideal ■ home for the technical advancements
Infrastructure technology group OFFERING Niched technology, solutions and services to the Infrastructure sector MARKET Strong underlying trends, volume as well as improvements, drive long-term growth Employees Net Sales 1 100 % 0 4 2 000 + ) 9 R 1 G 0 2 A 1 C Q – 6 1 1 500 0 2 ( 1 000 Units 500 30 0 LTM Q1 2016 2017 2018 2019 6
Today’s presentation LONG-TERM TRENDS IN OUR MARKETS NEW BUSINESS AREAS CURRENT TRADING 7
Three new Business Areas from January 2019 TAILORED NICHED PRODUCTS INSTALLATIONS & SERVICES NEW BUSINESS AREAS SPECIAL INFRASTRUCTURE PROPERTY TECHNICAL WATER & ENERGY SOLUTIONS SERVICES 8
WATER & ENERGY SALES 1) 489 MSEK EBITA*-% 1) 16.1 % Sub-segments: • Water & Sanitation NO. OF UNITS 13 • Power & Energy 1): LTM Share of total EBITA* 2) 37% 2): LTM excl. central costs Acquisitions prior to 2018 Acquisitions last 15 months 9
SPECIAL INFRASTRUCTURE SOLUTIONS SALES 1) 359 MSEK Sub-segments: EBITA*-% 1) 21.6 % • Air & Climate control Safety & Security • NO. OF UNITS: 8 Transportation • 1): LTM Share of total EBITA* 2) 2): LTM excl. central costs 36% Acquisitions prior to 2018 Acquisitions last 15 months 10
PROPERTY TECHNICAL SERVICES SALES 1) 732 MSEK Sub-segments: EBITA*-% 1) 7.8 % Elevator • NO. OF UNITS 9 Other • 1): LTM Share of total EBITA* 2) 27% 2): LTM excl. central costs Service elevators, Stockholm Service elevators, Vienna New elevators, Europe Other, Property Technical Services No acquisitions last 15 months 11
Today’s presentation LONG-TERM TRENDS IN OUR MARKETS NEW BUSINESS AREAS CURRENT TRADING 12
Quarterly highlights § Good market situation and demand § Net sales increased 25% to SEK 422m Strong growth and margin increase § EBITA* increased 51% to SEK 52m and EBITA* margin increased to 12.3% (10.1%) § Strong cash flow, SEK 58m (6) from operating activities, corresponding to a cash generation of 111% (26%) § Strong organic growth for Water & Energy and Special Infrastructure Solutions, in total +11% organic in the quarter Strong organic growth § Our elevator business continues to develop positively with improved profitability and increased profits in the quarter but slowdown in shell completion § We saw a reversed development within shell completion. Large projects in previous year Q1 amplified the decrease y-o-y in the quarter for shell completion, also expected for Q2 but not for Q3/Q4. § Coming quarters unchanged positive view on growing profit levels § Good market situation and acquisitions contribute with results Outlook is positive § An agreement was signed with Nordea regarding bank financing of SEK 800m, which strengthens Sdiptech's scope for further acquisitions and growth 13
Growth in LTM Q1 2019 +37% Group EBITA* Group Net sales Net Sales (SEK m) EBITA* (SEK m) +37% 195 +52% 1580 177 1496 168 1408 153 1291 1153 128 123 1045 108 745 2016 2017 LTM Q1 LTM Q2 LTM Q3 LTM Q4 LTM Q1 2016 2017 LTM Q1 LTM Q2 LTM Q3 LTM Q4 LTM Q1 2018 2018 2018 2018 2019 2018 2018 2018 2018 2019 14
Quarter and LTM Financial development Group LTM Q1 2019 Q1 2019 (LTM Q1 2018) (Q1 2018) Net Sales (SEKm) +25% 422 (338) +37% 1,580 (1,153) EBITA* (SEKm) +51% 52 (34) +52% 195 (128) EBITA* margin 12.3% (10.1%) 12.3% (11.1%) Net bank debt/EBITDA 0.84 (-0.43) 1) Net debt/EBITDA 3.30 (1.35) 1) Comment on the Net debt/EBITDA ratio. At a share of 54%, Net debt consists of debt related to “conditional considerations for acquisitions” (Swe: tilläggsköpeskillingar). These debts are sized for profit growth, i.e. current Net debt is based on future EBITDA levels higher than the current EBITDA levels used in the ratio. 15
Quarter and LTM Financial development in Water & Energy Water & Energy Quarter Net Sales (SEK m) EBITA* margin (%) 489 25% • Continued strong growth in sales, in the 22,8% quarter increased with 69% to SEK 150m, of 428 which organic growth was 10% 18,9% 20% 359 15,7% 16,1% 15,6% • EBITA* increased with 123% to SEK 26m 14,8% 15% 13,0% 251 299 • EBITA* margin increased to 17.4% (13.2%) 211 10% • The margin increase comes partly from acquired units with higher profit margins, and 112 partly from good organic growth in high margin 5% businesses. 0% Other 2016 2017 LTM Q1 LTM Q2 LTM Q3 LTM Q4 LTM Q1 2018 2018 2018 2018 2019 • EBITA * margin for the business area is expected to be around 16–18% for the full year 2019 LTM 2019 Q1 2019 (LTM 2018) (Q1 2018) • Acquisitions during 2019: Net Sales (SEKm) 150.2 489.2 (88.9) (250.7) Water Treatment Products Ltd, in Feb-19 EBITA* (SEKm) 26,1 78,6 (11.7) (47,3) • Total number of units: 13 EBITA* margin 17.4% (13.2%) 16.1% (18.9%) 16
Quarter and LTM Financial development in Special Infrastructure Solutions Special Infrastructure Solutions Quarter Quarter Net Sales (SEK m) EBITA* margin (%) • Sales in the quarter increased with 60% to • Continued strong growth in sales, in the 30% 27,1% 159.1 MSEK 26,0% 359 26,2% quarter increased with 66% to SEK 100m, of 25,5% 25,2% 320 which organic growth was 13% 25% • EBITA* increased with 20% to 28.7 MSEK 21,6% 284 supported by strong market positions and • EBITA* increased with 51% to SEK 21m 22,1% 20% 238 good demand • The EBITA * margin decreased during the first 193 15% • EBITA* margin increased from last quarter 167 quarter to 20.6 percent (22.6), as a leveling of margins is done through acquisition activities to 20.3%, but decreased compared to RTM, 10% due to very good profitability in the last 91 • Good growth in Safety & Security and in the three months 2017. A normalization to 5% market for refrigeration plants. current levels in the third quarter has 0% occurred. 2016 2017 LTM Q1 LTM Q2 LTM Q3 LTM Q4 LTM Q1 Other 2018 2018 2018 2018 2019 Other • EBITA * margin for the business area is • Acquisitions: expected to be around 18–20% for the full year LTM 2019 Q1 2019 KSS Klimat- & Styrsystem AB in Q2 2019 (LTM 2018) (Q1 2018) Rogaland Industri Automasjon AS early in Net Sales (SEKm) 100.0 359,2 • Acquisitions during 2019: (60.4) (193,2) Q3 RedSpeed International Ltd, in Jan-19 EBITA* (SEKm) 20.6 (13.6) 77,6 (52,3) • Total number of companies: 13 • Total number of units: 8 EBITA* margin 20.6% (22.6%) 21,6% (27,1%) 17
Quarter and LTM Financial development in Property Technical Services Property Technical Services Quarter Net Sales (SEK m) EBITA* margin (%) • Sales in the quarter decreased with 9% to SEK 172m, partly from a planned focus on fewer but 766 20% 754 749 732 more profitable customer segments within 709 667 elevators, partly from a slowdown in new construction of housing in Stockholm, which 15% 545 affected our operations in shell completion. Large projects previous year in Q1 amplified 12,8% 10% the decrease, also expected for Q2 but not for 8,1% 7,9% 7,7% 7,3% 7,0% 6,3% Q3 nor Q4. 5% • However, solid growth, demand and profitability increase in the elevator business • EBITA* decreased with 33% to SEK 9m 0% 2016 2017 LTM Q1 LTM Q2 LTM Q3 LTM Q4 LTM Q1 • EBITA* margin decreased to 5.4% (7.3%) 2018 2018 2018 2018 2019 Other LTM 2019 Q1 2019 • A gradual normalization of the EBITA* margin (LTM 2018) (Q1 2018) for the business area towards 8–10% Net Sales (SEKm) 172.1 732.2 (188.8) (709.1) • Acquisitions during 2019: None EBITA* (SEKm) 9.3 57.1 (13.9) (44.8) • Total number of units: 9 EBITA* margin 5.4% 7.8% (7.3%) (6.3%) 18
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