Makes it easier to be professional Investor presentation Q3 2018 - PowerPoint PPT Presentation

Makes it easier to be professional Investor presentation Q3 2018 London and Edinburgh Roadshow with DNB Markets 1

Introduction 2

At a glance Ahlsell is the Nordic market leading distributor of installation products within HVAC, Electrical and Tools & Supplies • Annual sales: 30 281MSEK* • E-commerce represents ~28% of sales* For more than 140 years, Ahlsell has continuously developed and broadened its product offer to a diversified and loyal customer base • >100 000 customers • >1 000 000 articles of which 190 000 SKU’s The unique business model in combination with a decentralised structure generates stable cash flow and profitable growth – both organic and acquired • EBITA margin: 8,5%* With 5,800 employees, more than 230 branches and three central warehouses, we constantly fulfil our customer promise: Ahlsell makes it easier to be professional. * RTM = Rolling twelve months Q3 2018 3 SKU = Stock Keeping Unit

A strong success story… and the journey continues 2018 1877 1970 1980 1990 2000 2010 Sweden Geographical Nordic Region expansion Baltics HVAC & Plumbing Electrical Product and Refrigeration services expansion Tools & Supplies PPE (Personal Protective Equipment ) Work-site logistics DIY (Do it yourself) Customer segment expansion Construction Web shop Other strategic China sourcing office initiatives Sustainability as business case New roadmap developed for private label offering 4

Leading Nordic distributor in three product segments Electrical HVAC & Tools & 45% 28% 27% Plumbing Supplies Assortment >1.000.000 articles and 190.000 SKUs Share of revenues RTM 2018 Q3 5

Successful one-stop-shop for professionals One-stop-shop Strong sales force ~ 3 900 sales people (of 5 800) 6

For the customer: Unique distribution capacity  The broadest product offering in the Nordics Strong local presence with specialist sales force   Accurate next morning delivery  Optimisation of transports  Value-added delivery  Lowering total cost 7

Fragmented and loyal customer base More than 100 000 active customers 1. Not to scale 2. SMEs refer to small and medium-sized enterprise customers. The definition of an SME varies across Ahlsell’s product segments but is based on sales thresholds in some cases and the number of employees in other cases 3. SME customers Based on first historical registration date of customers that purchased from Ahlsell in 2015 Source: Company information as per financial year ended Dec 2015, Third Party/Company Analysis 80% contribute to 45% of sales of sales derive from customer relationships Top 10 longer than customers account for 5 years 6% of sales 8

Ahlsell lowers the total cost for the customer Total cost for the customer Ahlsell value proposition Quality products at right prices Product price Direct cost Transaction cost Assortment and processes • Transport cost makes One order - One Inirect cost • Admin cost delivery, One invoice possible • Handling cost of several orders Cost of inadequate expertise • Wrong product Advising the customer to the Inirect cost best choice of product • Inefficient usage • Wrong expertise Order today with delivery Cost of failed delivery tomorrow morning • Production downtime Inirect cost • High inventory level Delivery complaints at very low • Handling costs of additional orders level (0,003%) 9

World class logistics – Example Swedish logistics center Next step Increase capacity and efficiency Hallsberg Overview Automated Storage & Retrieval New investment 235 ’ m 2 storage capacity, of which 80’ System (ASRS) 1st circle reachable within 2 hours • • 450 MSEK, of which MSEK 200 • covered • Small goods storage 1/5th of the Swedish population financed by the property owner • High level of automatization and • 2nd circle reachable within 3 hours • Room for 95’ totes • Completion of the investment is digitalisation 1/2 of the Swedish population • Operated by 48 shuttles estimated at the beginning of 2020 • 90’ SKU in stock • 230 km to Stockholm • 10 elevators • Increased automation and >13 million order lines processed p.a. • • 280 km to Gothenburg robotization • 10 picking stations • ~750 employees / Three shift • 470 km to Malmö • 300 forklifts 10

For the supplier: Unique presence  Cost-efficient access to a loyal customer base in a geographically large and attractive market The largest sales force in B2B in the Nordics   Strong omni-channel market access  Constant work towards improvements Top 10 suppliers represent 24% of COGS 11

For the employee: An attractive employer Opportunity for development  Healthy values ​and good leadership   Work for increased diversity  A safe and sustainable workplace  Constant improvement 12

Market leading position built through acquisitions and scope expansion 1995 #1-2 position Sweden Acquisitions #3-5 position HVAC & Plumbing 3 500 14 3 256 Electrical 3 000 12 2005 2 500 10 Sweden Norway Finland HVAC & P 2 000 8 MSEK Electrical 1 542 1 504 1 434 Tools & S 1 359 1 500 6 1 278 1 265 964 777 886 Current 850 1 000 4 600 Sweden Norway Finland New geography 426 500 326 337 2 173 166 138 HVAC & P 96 73 30 0 0 0 0 Electrical 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018a Tools & S Acquired sales Number of acquisitions New areas a: Announced, but sometimes not finalised acquisitions 13

Q3 segment overview Net sales per segment Adj. EBITA per segment 1% 2% 7% 5% 2% 0% 37 12% branches 56 20% branches 65% 86% Sweden Norway Finland Sweden Norway Finland Denmark Other Denmark Other Sales in % per segment and product segment 100 134 8 27 32 19 14 100 0 6 80 branches 17 85 31 60 28 69 31 4 12 40 50 45 branches branches 37 20 0 Group Sweden Norway Finland Denmark Other HVAC and plumbing Electrical Tools and supplies Q3 2018 RTM, Rolling twelve months 14

Well diversified market exposure New construction Renovation Industrial Infrastructure Production Residential Non-residential Residential Non-residential  Population growth  Vacancy levels  Number of  Building stock age  Manufacturing  Population growth dwellings output  Number of  Number of  Leasing renewals  Urbanisation dwellings buildings/  Regulations and  Industry capex  Number of  Age of existing commercial space subsidies  Interest rates transactions infrastructure  Housing stock age  House prices  Political initiatives  Number of transactions 15% 15% 35% 20% 15% of Sales of Sales of Sales of Sales of Sales ~Estimated 10y average exposure 15

Financial performance 16

Long track record of profitable growth Net sales, EBITA and EBITA margin 32 000 16 30 281 30 000 15 27 484 28 000 14 26 000 13 24 606 24 000 12 22 586 21 979 21 779 21 474 22 000 11 20 639 20 434 20 435 19 256 20 000 10 18 958 18 985 ~2/3 8.8 8.8 8.7 8.6 18 000 9 8.3 8.1 16 245 8.0 organic 7.8 16 000 8 7.0 6.7 5yr CAGR 6.5 14 000 7 6.3 5.9 5.7 ~6% 12 000 11 119 6 9 883 10 000 5 5.3 8 000 4 4.6 15yr CAGR 6 000 3 ~8% 4 000 2 2 000 1 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q3 2018 Adj. EBITA margin, % Net sales, MSEK EBITA, MSEK EBITA margin, % RTM CAGR is updated yearly. 17

Agile and resilient business model with low capex needs Operating cash flow, adj. EBITA, investments and Resilient business model with flexible cost structure cash conversion rate 3 000 180% • Broad exposure to market segments with different cyclical characteristics 2 500 150% Broad product portfolio with attractive profitability • 2 000 120% 1 500 90% • Organisation with decentralised result and profitability responsibility. Over 400 P/L centres 1 000 60% 500 30% • Flexible cost structure, e.g. leased locations and outsourced transportation and IT 0 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q3 2018 -500 -30% Strong, low-cost and resilient IT-platform • RTM giving full transparency Adj. EBITA, MSEK Operating cash flow, MSEK Gross investment in property, plant and equipment, MSEK • Ability to adopt quickly to demand changes Cash conversion rate, % Cash conversion rate - Target 18

Proven deleveraging capacity and long term financing in place Good deleveraging capacity Maturity profile, MSEK Leverage (Net debt/EBITDA) Of total 10 671 MSEK, 3 226 MSEK are unutilised 6,0 9 000 8 000 4,8 5,0 7 000 3,9 3,9 4,0 6 000 3,3 5 000 2,9 3,0 2,6 4 000 3 000 2,0 2 000 1,0 1 000 0 0,0 2018 2019 2020 2021 2022 2013 2014 2015 2016 2017 Q3 2018 Term Loan A SEK Term Loan A EUR Term Loan A NOK RTM Target Net debt/ EBITDA Term Loan B Loan from SEK Revolving facility A Revolving facility B MTN Bond 19