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Q4 2017
Bo AnnvikCEO
Summary 2017
• Record high sales and earnings
• Favourable market conditions
• 12 acquisitions with total annual sales of SEK 1.3 billion
• Net sales rose 15% to 14,847 MSEK (12,955)
• Adjusted EBITA 11.8%
• EBITA rose 9% to 1,613 MSEK (1,484)
• EBITA margin 10.9% (11.5)
• Earnings per share rose 9% to SEK 8.54 (7.80)
• Prosed dividend SEK 3.75 (3.20) +17%
• New organization structure and management team
2
Highlights fourth quarter 2017
• Positive momentum in most operations, with growth inorder intake, sales and earnings
• Continued good development in the Nordic countries,Benelux and Germany
• Lower volumes for valves for power generation having an impact on earnings and EBITA-margin
• Restructuring of Sander Meson group
• Acquisition of Inovatools in Germany
3
Financial summary fourth quarter 2017
• Order intake rose 13% to 3,895 MSEK (3,434)
• Net sales rose 12% to 3,932 MSEK (3,499)
• Restructuring costs of 132 MSEK
• Excluding restructuring costs EBITA rose 10% to 431 MSEK, corresponding to an EBITA-margin of 11.0%
• EBITA declined 24% to 299 MSEK (391)
• EBITA margin 7.6% (11.2%)
4
Market conditions
• Sweden: ↗
• Finland: ↗
• Norway: oil & gas → other →
• Denmark: →
• UK: →
• Ireland: →
• Benelux: ↗
• Switzerland: →
• Germany: ↗
• North America: →
• Asia: ↗
5
Order intake
• Q4: Order intake rose 13% to 3,895 MSEK (3,434) whereof organic 6%
• FY 2017: Order intake rose 16% to 15,051 MSEK (13,004) whereof organic 6%
0
2 000
4 000
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12 000
14 000
16 000
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1 000
1 500
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Q1 -05 Q1 -06 Q1 -07 Q1 -08 Q1 -09 Q1 -10 Q1 -11 Q1 -12 Q1 -13 Q1 -14 Q1 -15 Q1 -16 Q1 -17
Order intakemov 12m
MSEK
Order intakeMSEK
Order intake Order intake moving 12 mos
6%
8%
-1%
13%
-100
0
100
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400
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Organic Acquisitions Currency Total
MSEK
growth Q4 2017
6%
9%
1%
16%
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Organic Acquisitions Currency Total
MSEK
6
Net sales
• Q4: Net sales rose 12% to 3,932 MSEK (3,499) whereof organic 5%
• FY 2017: Net sales rose 15% to 14,847 MSEK (12,955) whereof organic 5%
0
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Q1 -05 Q1 -06 Q1 -07 Q1 -08 Q1 -09 Q1 -10 Q1 -11 Q1 -12 Q1 -13 Q1 -14 Q1 -15 Q1 -16 Q1 -17
Net salesmov 12m
MSEK
Net salesMSEK
Net sales Net sales moving 12 mos
5%
8%
-1%
12%
-100
0
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Organic Acquisitions Currency Total
MSEK
5%
9%
1%
15%
0
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1400
1600
1800
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Organic Acquisitions Currency Total
MSEK
7
EBITA
• Q4: Excl. restructuring costs: EBITA 431 MSEK EBITA-margin 11.0%EBITA declined 24% to 299 MSEK (391) whereof organic 4% EBITA-margin 7.6% (11.2)
• FY 2017: Excl. restructuring costs: EBITA 1,745 MSEK Adjusted EBITA-margin 11.8%EBITA rose 9% to 1,613 MSEK (1,484) whereof organic 8%EBITA-margin 10.9% (11.5)
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Q1 -05 Q1 -06 Q1 -07 Q1 -08 Q1 -09 Q1 -10 Q1 -11 Q1 -12 Q1 -13 Q1 -14 Q1 -15 Q1 -16 Q1 -17
EBITAmov 12m
MSEK
EBITAMSEK
EBITA EBITA moving 12 mos
4%7%
-1%
-34%
-24%
-150
-100
-50
0
50
100
Organic Acquisitions Currency Restructuring Total
MSEK
growth Q4 2017
8
Growth bridge 2017
Q4 Q4
MSEK 2017 Org Acq F/X Restruct Total 2016
Order intake
3,895 6% 8% -1% - 13% 3,434
Net sales 3,932 5% 8% -1% - 12% 3,499
EBITA 299 4% 7% -1% -34% -24% 391
9
Acquisitions 2017
Annual sales Possession
1. RS Technics B.V., NL 20 MSEK January
2. Sunflower Medical Ltd, UK 50 MSEK January
3. Ellard Ltd, UK 100 MSEK February
4. Türenfabrik, CH 70 MSEK March
5. Pro-Flex AS, NO 100 MSEK April
6. MaxxVision, DE 80 MSEK April
7. Wennerström Ljuskontroll AB, SE 110 MSEK July
8. Elma Instruments A/S, DK 180 MSEK July
9. Young Black Ltd, UK 110 MSEK July
10. Tubeworkx B.V., NL 50 MSEK July
11. Inovatools, DE 330 MSEK November
12. Tradinco B.V., NL 70 MSEK December
Total 1 ,270 MSEK
10
7,0%8,0%
11,3%12,8%
9,3%
0,0 %
2,0 %
4,0 %
6,0 %
8,0 %
10, 0%
12, 0%
14, 0%
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100
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400
500
Q4 -16 Q1 -17 Q2 -17 Q3 -17 Q4 -17
Engineering & Equipment• Net sales: 461 MSEK (415) +11%, whereof organic +11%
• EBITA: 43 MSEK (29) +48%
• EBITA-margin: 9.3% (7.0)
• Positive business climate
• Stable demand in most customer segments
6,6% 6,6%
9,2% 9,8%8,5%
0,0 %
2,0 %
4,0 %
6,0 %
8,0 %
10, 0%
12, 0%
0
100
200
300
400
500
600
700
Q4 -16 Q1 -17 Q2 -17 Q3 -17 Q4 -17
Flow Technology• Net sales: 613 MSEK (580) +6%, whereof organic +4%
• EBITA: 52 MSEK (38) +37%
• EBITA-margin: 8.5% (6.6)
• Stable demand
• Continued low invoicing for companies within the the marine segment with impact on earnings and margin, restructuring initiated
11
12,1% 13,1% 13,1% 12,9%11,0%
0,0 %
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Q4 -16 Q1 -17 Q2 -17 Q3 -17 Q4 -17
Fluids & Mechanical Solutions• Net sales: 474 MSEK (445) +7%, whereof organic +5%
• EBITA: 52 MSEK (54) -4%
• EBITA-margin: 11.0% (12.1)
• Stable demand
• Higher costs within some units
11,0%
10,2%
11,2% 11,3%11,6%
9,5 %
10, 0%
10, 5%
11, 0%
11, 5%
12, 0%
0100200300400500600700800
Q4 -16 Q1 -17 Q2 -17 Q3 -17 Q4 -17
Industrial Components• Net sales: 831 MSEK (690) +20%, whereof organic +7%
• EBITA: 96 MSEK (76) 26%
• EBITA-margin: 11.6% (11.0)
• Continued strong demand in Sweden and Norway
12
15,1% 16,6%19,2%
17,1% 16,8%
0,0 %
5,0 %
10, 0%
15, 0%
20, 0%
25, 0%
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400
Q4 -16 Q1 -17 Q2 -17 Q3 -17 Q4 -17
Measurement & Sensor Technology• Net sales: 387 MSEK (338) +14%, whereof organic +14%
• EBITA: 65 MSEK (51) +27%
• EBITA-margin: 16.8% (15.1)
• Stable demand in most regions and applicable segments
• Healthy margins
13,8%15,4%
13,7% 14,2%
11,3%
0,0 %
2,0 %
4,0 %
6,0 %
8,0 %
10, 0%
12, 0%
14, 0%
16, 0%
18, 0%
0
300
600
900
1 200
Q4 -16 Q1 -17 Q2 -17 Q3 -17 Q4 -17
Special Products• Net sales: 1,178 MSEK (1,040) +13%, whereof organic
+0%
• EBITA: 133 MSEK (144) -8%
• EBITA-margin: 11.3% (13.8%)
• Variations in demand. Healthy business situation in Germany and Benelux offsets situation in UK and Switzerland
• Lower volumes of valves for power generation having an impact on earnings and EBITA-margin
13
Earnings per share
0,00
0,50
1,00
1,50
2,00
2,50
3,00
Q1 -08 Q1 -09 Q1 -10 Q1 -11 Q1 -12 Q1 -13 Q1 -14 Q1 -15 Q1 -16 Q1 -17
SEKQ4: -32% SEK 1.42 (2.08)YTD: 9% SEK 8.54 (7.80)Proposed dividend: SEK 3.75 (3.20) +17%
14
Financial targets
2017 Target
Growth 15% >10%
EBITA-margin 10.9% >10%
Return on operating capital 19% >20%
Net debt/equity ratio 74% <100%
15
Income statement
MSEK Q4 2017 Q4 2016 % 2017 2016
Net sales 3,932 3,499 12% 14,847 12,955
Gross profit 1,299 1,159 12% 4,966 4,348
% 33.0% 33.1% 33.4% 33.6%
Operating expenses -1,004 -851 18% -3,534 -3,126
% -25.5% -24.3% -23.8% -24.1%
Other -56 27 -52 50
Operating profit 239 335 -29% 1,380 1,272
Financial net -17 -17 -70 -78
Earnings before tax (EBT) 222 318 -30% 1,310 1,194
% 5.6% 9.1% 8.8% 9.2%
EBITA 299 391 -24% 1,613 1,484
% 7.6% 11.2% 10.9% 11.5%
Earnings per share, SEK 1.42 2.08 -32% 8.54 7.80
16
Balance sheet
MSEK 31 Dec 2017 31 Dec 2016
Intangible fixed assets 4,947 39% 4,267 39%
Tangible and financial fixed assets 1,757 14% 1,568 14%
Inventories 2,517 20% 2,249 20%
Receivables 2,881 23% 2,637 24%
Cash and cash equivalents 464 4% 332 3%
Total assets 12,566 11,053
Equity 5,168 41% 4,399 40%
Interest-bearing liabilities 4,293 34% 3,960 36%
Non-interest-bearing liabilities 3,105 25% 2,694 24%
Total equity and liabilities 12,566 11,053
17
Financial key data
MSEK 31 Dec 2017 31 Dec 2016 31 Dec 2015
Adjusted EBITA margin, % 11.8 11.5 12.0
EBITA margin, % 10.9 11.5 12.0
Return on operating capital, % 19 20 22
Return on equity, % 22 24 26
Interest-bearing net debt, SEK million 3,829 3,628 2,949
Net debt/equity ratio, % 74 82 80
Net debt/EBITDA, times 2.1 2.2 1.8
Equity ratio, % 41 40 40
Key ratios per share
Earnings per share, SEK 8.54 7.80 7.44
18
Margins
Gross profit 33.0% of sales (33.1)YTD 33.4% (33.6)
EBITA margin 7.6% of sales (11.2)YTD 10.9% (11.5)
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
40,0%
0
500
1 000
1 500
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Q1 -12 Q1 -13 Q1 -14 Q1 -15 Q1 -16 Q1 -17
Net salesMSEK
Net sales GP 2 margin
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
16,0%
0
2 000
4 000
6 000
8 000
10 000
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Q1 -12 Q1 -13 Q1 -14 Q1 -15 Q1 -16 Q1 -17
Net salesMSEK
Net sales EBITA-margin EBITA-marginmov 12m
0,0%
2,0%
4,0%
6,0%
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12,0%
14,0%
16,0%
0
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1 000
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Q1 -12 Q1 -13 Q1 -14 Q1 -15 Q1 -16 Q1 -17
Net salesMSEK
Net sales EBITA-margin
19
New Business Areas 2018
• New Business Areas established
– to strengthen platform for continued profitable growth of current portfolio companies
– to maintain a high acquisition pace
– to better utilize the international skills within the Group
• Business Area ‘Special Products’, with a majority of the companies outside Nordics, dissolved into three new Business Areas, with geography as linkage:
– Benelux
– DACH
– UK
20
• Flow Technology (Product/technology commonalities)
• Measurement & Sensor Technology(Product/technology commonalities)
• Fluids & Mechanical Solutions
• Industrial Components
• Finland (Engineering & Equipment)
• Benelux
• DACH
• UK
New Business Areas 2018
21
30%
16%
20% 10%
Management Group extended and strengthened
• As a result of the new Business Areas, the existing Group Management is extended and strengthened
• Better utilize the international skills within the company
• Reflect our international business scope and growth potential
22
» Sustainable
» Profitable
» Growth
Business objective
24
Thank you!Q&A