Q4 2018 Presentation 8 February 2019
Fourth quarter Q4 2018 In Brief • Continued strong sales growth: 17% 10% acquired, 4% organic and 3% currency o Market demand flat relative Q3, but a little weaker than strong Q4 2018… o …but: increased market share, good order intake, and strong start to 19Q1 o Acquisitions continue to contribute well o • Operating profit (EBITA) improved by +14% Low gross margin, but also lower opex percentage o Segment International very strong; weak gross margin in Sweden o Overall strong EBITA growth, but slightly lower margin o • Acquisition of Rudhäll Industri in October • Board proposes raised dividend to SEK 2.50 SEK per share 2
Fourth quarter Financial highlights, Group Quarter 4 Δ Jan-Dec Δ SEK million 2018 2017 2018 2017 % % Order intake 982 863 3,798 3,256 14 17 Net sales 966 828 3,786 3,201 17 18 Gross profit 271 238 1,088 917 14 19 28.1% 28.7% 28.7% 28.6% Operating expenses -189 -166 -721 -606 14 19 19.6% 20.0% 19.0% 18.9% Operating profit (EBITA) 82 72 367 311 14 18 8.5% 8.7% 9.7% 9.7% EBITA Q4 2017 72 Currencies +3 Volume +6 Price/cost/mix/other -6 Acquisitions +6 EBITA Q4 2018 82 3
Fourth quarter Financial development, Group Quarterly Net Sales growth Net Sales EBITA Organic growth Acquisitions and currency translation 4000 400 25 3500 350 20 3000 300 LTM Net Sales, SEK millions LTM Adj EBITA, SEK million 15 2500 250 10 Percent 2000 200 5 1500 150 0 1000 100 -5 500 50 0 0 -10 4
Fourth quarter Segment International Quarter 4 Δ Jan-Dec Δ SEK million 2018 2017 2018 2017 % % Order intake 668 568 2,648 2,172 18 22 Net sales 644 560 2,615 2,144 15 22 Gross profit 197 164 20 788 623 26 30.6% 29.3% 30.1% 29.1% Operating expenses -129 -110 -498 -420 16 19 20.0% 19.6% 19.1% 19.6% Operating profit (EBITA) 68 54 290 203 28 43 10.6% 9.7% 11.1% 9.5% EBITA Q4 2017 54 Net sales grew by 15%, whereof 5% organic and 5% from acquisitions Currencies +6 Higher market shares and somewhat higher demand Volume +4 Best-ever gross margin: Price/cost/mix/other -2 exchange rates and price increases Acquisition +6 Very strong end to a good year, reaching all-time high EBITA EBITA Q4 2018 68 5
Fourth quarter Financial development, International Quarterly Net Sales growth Net Sales EBITA Organic growth Acquisitions and currency translation 3000 300 35 30 2500 250 25 LTM Net Sales, SEK millions LTM Adj EBITA, SEK million 2000 200 20 Percent 15 1500 150 10 1000 100 5 0 500 50 -5 0 0 -10 6
Fourth quarter Segment Sweden Quarter 4 Jan-Dec Δ Δ SEK million 2018 2017 % 2018 2017 % Order intake 314 295 1,149 1,089 6 6 Net sales 322 268 20 1,172 1,057 11 Gross profit 81 79 323 312 2 4 25.1% 29.4% 27.6% 29.5% Operating expenses -53 -44 19 -198 -173 14 16.5% 16.4% 16.7% 16.4% Operating profit (EBITA) 28 35 -19 126 139 -10 8.7% 13.1% 10.7% 13.2% EBITA Q4 2017 35 Net sales up 20%, whereof 19% due to the acquisition of Rudhäll Currencies -3 Gross margin down YoY due to purchasing prices, a weak SEK and a Volume +2 lower gross margin in Rudhäll. However, no organic change since Q3. Price/cost/mix/other -9 Overall result unsatisfactory. Acquisition +3 Strong focus on cost savings and efficiency in 2019. EBITA Q4 2018 28 7
Fourth quarter Financial development, Sweden Quarterly Net Sales growth Organic growth Currency translation effects and acquisition Net Sales EBITA 25 2000 200 20 LTM Net Sales, SEK millions 1500 150 15 LTM Adj EBITA, SEK million 10 Percent 1000 100 5 0 500 50 -5 -10 0 0 -15 8
Fourth quarter Acquisitions since 2014 Acquisition of Rudhäll Industri AB in Sweden and China in October Strengthens our offering in special products and sourcing capabilities in China Sales 2018 of SEK 210 million with an operating margin of 9% Price: SEK 100 million on EV basis 9
EBITA Bridge Fourth quarter Group International Sweden Other EBITA in Q4 2017 72 54 35 -17 Currency +3 +6 -3 0 Volume +6 +4 +2 0 Price/cost/mix/other -6 -2 -9 +5 Acquisitions +6 +6 +3 -3 EBITA in Q4 2018 82 68 28 -15 Full Year Group International Sweden Other EBITA in FY 2017 311 203 139 -31 Currency +18 +27 -9 0 Volume +66 +47 +19 0 Price/cost/mix/other -60 -19 -27 -14 Acquisitions +31 +31 +3 -3 EBITA in FY 2018 367 290 126 -49 10
2018 Long-term profitable growth Growth EBITA margin Earnings, Dividend 20% 14% 8 80% 7 70% 12% 15% 6 60% 10% 10% 5 50% 8% 5% 4 40% 6% 3 30% 0% 4% 2 20% -5% 2% 1 10% 0 0% -10% 0% 12 13 14 15 16 17 18 12 13 14 15 16 17 18 12 13 14 15 16 17 18 EPS, SEK Target DPS/ DPS, SEK 5-year Target 5-year Target EPS DPS/EPS, % average Growth % average EBITA%
Fourth quarter Summary and Outlook 2018 in summary • Continued execution of strategy, and significant investments in Leadership • Strong growth, driven by acquisitions, increased market share, and good demand • Stable margins • Price increases have offset cost increases • Investment in Leadership paid for by leverage on organic growth • Sales, operating profit and net profit all all-time-high, by a wide margin Outlook No signs of sharp drop in demand, but customers cautious about inventory, ... o ...leading to delayed orders over year-end—strong start January 2019 o Raw materials prices leveled off end 2018—favorable for savings this year o Focus 2019 o Short-term: purchasing savings and cash flow o Strategy unchanged: Leadership 2020 o 12
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