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

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 increased market share • Operating profit improved +10% over strong comparables o Lower gross margin, but also lower percentage of operating expenses o Increased operating profit contributed by good development of acquired companies o International: some organic growth, but operating profit down over strong comparables o 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 opportunities and challenges in a weaker market 2

Third quarter Financial highlights, Group Δ Δ Quarter 3 Jan-Sep SEK million 2019 2018 % 2019 2018 % Order intake 1,042 893 3,206 2,816 17 14 Net sales 1,044 895 17 3,223 2,820 14 Gross profit 279 259 8 886 817 8 26.7 27.5 % 28.9 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 51 214 193 11 15 Operating cash flow 122 50 144 255 112 127 EBITA Q3 2018 81 Currencies -2 Volume +2 Price/cost/mix/other -4 Acquisitions +12 EBITA Q3 2019 89 3

Third quarter Financial development, Group Quarterly Net Sales growth Net Sales EBITA Organic growth Acquisitions and currency translation 4500 450 25 4000 400 20 3500 350 LTM Net Sales, SEK millions LTM EBITA, SEK million 3000 300 15 2500 250 Percent 2000 200 10 1500 150 1000 100 5 500 50 0 0 0 4

Third quarter Segment International Δ Δ Quarter 3 Jan-Sep SEK million 2019 2018 % 2019 2018 % Order intake 673 658 2,123 1,980 2 7 Net sales 676 647 5 2,137 1,971 8 Gross profit 198 197 632 591 1 7 % 29.3 30.4 29.6 30.0 Operating expenses -129 -124 -399 -369 4 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 EBITA Q3 2018 73 ▪ Net sales grew by 5%, whereof 2% organic Currencies +2 ▪ Somewhat lower underlying demand and increased market share Volume +5 ▪ Gross margin down to 29.3%, mainly due to weaker mix Price/cost/mix/other -11 compared to strong quarter last year Acquisition 0 ▪ Continued investment in strategic areas EBITA Q3 2019 69 5

Third quarter Financial development, International Quarterly Net Sales growth Net Sales EBITA Organic growth Acquisitions and currency translation 3500 350 35 3000 300 30 LTM Net Sales, SEK millions LTM EBITA, SEK million 2500 250 25 2000 200 20 Percent 15 1500 150 10 1000 100 5 500 50 0 0 0 6

Third quarter Segment Sweden Δ Δ Quarter 3 Jan-Sep SEK million 2019 2018 % 2019 2018 % Order intake 369 235 1,083 836 57 30 Net sales 368 248 48 1,087 849 28 Gross profit 87 67 271 243 30 12 % 23.7 27.0 24.9 28.6 Operating expenses -59 -45 -168 -144 31 16 % 16.0 18.1 15.4 17.0 Operating profit (EBITA) 28 22 103 99 28 4 % 7.6 8.9 9.5 11.7 ▪ Net sales up by 48%, all contributed by latest 2 acquisitions EBITA Q3 2018 22 ▪ Organic growth -4%: Currencies -4 Lower underlying demand and unchanged market share Volume -2 ▪ Gross margin down year-on-year, fully attributable to acquisitions Price/cost/mix/other +5 (adjusted for acquisitions, gross margin was 27.3% (27.0)) Acquisition +7 ▪ EBITA improvement due to acquisitions and good cost control EBITA Q3 2019 28 ▪ Focus on price, sourcing savings and cost control going forward 7

Third quarter Financial development, Sweden Quarterly Net Sales growth Organic growth Currency translation effects and acquisition Net Sales EBITA 60 2000 200 50 LTM Net Sales, SEK millions 1500 150 40 LTM EBITA, SEK million 30 Percent 1000 100 20 10 500 50 0 0 0 -10 8

Third quarter Gross margin development Segment Sweden Group GP%-development GP%-development 32% 32% 30% 30% 28% 28% 26% 26% 24% 24% 22% 22% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 18 19 19 19 18 19 19 19 Group, excl. Rudhäll and HT Bendix Segment Sweden, excl. Rudhäll and HT Bendix Group, as reported Segment Sweden, as reported 9

Third quarter Challenges and opportunities in a weaker market Challenges Opportunities • Adapt cost base to • Customers more focused on efficiency → weaker underlying growth… new business leads • …while continuing • Low demand for suppliers → investment in Leadership 2020 sourcing savings • → more focus on • Some competitors improving internal challenged or failing efficiency • Potentially, more acquisition candidates 10

Third quarter Acquisitions since 2014 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% 11

Third quarter EBITA Bridge Group International Sweden Other EBITA Q3 2018 -14 81 73 22 Currency 0 .-2 +2 -4 Volume 0 +2 +5 -2 Price/cost/mix/other +2 -4 -11 +5 Acquisitions +4 +12 0 +7 EBITA Q3 2019 -8 89 69 28 Group International Sweden Other EBITA YTD 2018 -36 285 222 99 Currency 0 +3 +7 -4 Volume 0 +37 +40 -3 Price/cost/mix/other +9 -29 -36 .-2 Acquisitions +2 +14 0 +12 EBITA YTD 2019 -25 311 233 103 12

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 ➔ only 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 o Continued market share gains o Continued investment in “Leadership 2020”; more focus on implementation & results, e.g. sourcing savings, efficiency o Capture opportunities in weaker market; adapt cost to lower demand • Confidence in continued good development despite slower market 13

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