Interim Management Statement January – September 2018
Interim Management Statement
January – September 2018
Q3 2018
2
Overview
Adjusted NAV SEK 421 bn., +7 percent
Listed Core Investments+9% total return
EQT-2% value change (constant currency)
Patricia IndustriesEstimated market values +2% (ex. cash)
Total Shareholder Return +13%
SIXRX +7%
Pause picture – the earth
Listed Core Investments
4
Important activities within the companies
U.S. Air Force USD 9.2 bn. order to Boeing for T-X training aircraft, Saab risk-sharing partner
Acquisition of Brooks Automation’s cryogenic business strengthens offer within Vacuum
Awarded important 5G order
Increased focus on core brands, decisive action to resolve Consumer Brands
Bid for fin-tech Cinnober, strengthens position as leading market infrastructure provider
Reorganizing operations to more efficiently serve its two end markets, energy and marine
Patricia Industries
> Major subsidiaries (Piab and Sarnova pro forma): +14% reported sales growth,
3% organic in constant currency
> Reported EBITA +13%
> Mölnlycke organic sales growth +2%, Wound Care grew by 4%
> Good growth in new subsidiaries Piab and Sarnova
> Laborie’s profitability returning to more normal levels
> Improved margins in Aleris Care, lower in Healthcare, actions to improve operations taken
5
Highlights during the quarter
Aleris
> Organic sales growth +1 percent in constant
currency
> Profitability improved in Care, declined in
Healthcare
> Focusing of offering in Healthcare Stockholm as
part of ongoing restructuring initiatives
6
Q3 2018
A provider of healthcare and care services in Scandinavia
0
1
2
3
4
5
6
0
2 000
4 000
6 000
8 000
10 000
12 000
2014 2015 2016 2017 201812 m. rolling
%SEK m.
Sales EBITDA, % EBITA, %
Aleris divests Care
> Aleris Care has developed into a high-quality care services provider with high
user satisfaction
> Strategic review to specialize and decentralize operations
> Clear focus on two segments – Care and Healthcare
> New good home for Care to gain scale and develop further
> Divestiture strengthens Aleris’ balance sheet and enables stronger focus on
Healthcare services
7
Aleris divests Aleris Care
8
> Reported profits significantly impacted by restructuring costs in both segments
> Transaction expected to close during second quarter 2019 at the latest
> Aleris plans to reduce net debt by SEK 2,650 m. upon closing
Aleris Care
(12 m. roll. Sep. 30, 2018)
Sales: SEK 5,081 m.
EBITDA: SEK 163 m.
EBITA: SEK 127 m.
~6,000 employees
Aleris Healthcare
(12 m. roll. Sep. 30, 2018)
Sales: SEK 5,712 m.
EBITDA: SEK 245 m.
EBITA: SEK 29 m.
~5,000 employees
Strong position in Scandinavian healthcare services
9
Key priorities
Successfully close the transaction
Continue to enhance quality,
service and efficiency
Restructure Healthcare Sweden
Develop digital platform Doktor24
Adapt and manage new radiology
contract in Stockholm
Mölnlycke
> Organic sales growth +2 percent in constant currency
> Wound Care grew 4 percent, Surgical flat
> Emerging Markets, parts of Europe key growth
drivers, the U.S. flat
> Underlying profitability unchanged
> Roll-out of Mepilex® Border Flex continues, launched
in the U.S. and UK in the quarter. Initial market
response positive
10
Q3 2018
A provider of advanced products for treatment and prevention of wounds and single-use surgical solutions
0
5
10
15
20
25
30
35
0
200
400
600
800
1 000
1 200
1 400
1 600
2014 2015 2016 2017 201812 m. rolling
%EUR m.
Sales EBITDA, % EBITA, %
Permobil
> Organic sales growth +1 percent in constant
currency
> No major difference in growth between business
areas and regions
> The EBITA margin declined, explained by
increasing operating costs, costs relating to CEO
transition, and an asset disposal loss
> Activities ongoing to address operating expenses
11
Q3 2018
A provider of advanced mobility and seating rehab solutions
0
5
10
15
20
25
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
2014 2015 2016 2017 201812 m. rolling
%SEK m.
Sales EBITDA, % EBITA, %
Piab
> Organic sales growth +6 percent in constant
currency
> EBITA margin 28 percent, impacted by product mix
change following acquisitions as well as increased
sales and marketing costs
> Integration of previously acquired Kenos
progressing well, new line of gripping solutions for
collaborative robots launched
12
Q3 2018
A provider of gripping and moving solutions for automated manufacturing and logistics processes
0
5
10
15
20
25
30
35
0
50
100
150
200
250
300
350
%SEK m.
Sales EBITDA, % EBITA, %
Sarnova
> Organic sales growth +6 percent in constant
currency
> Strong growth within Acute Care
> Profit growth exceeded sales growth
> Continued expansion of private label Curaplex
and pre-assembled custom kits, several new
products launched
13
Q3 2018
A specialty distributor of healthcare products in the U.S.
0
2
4
6
8
10
12
14
16
0
20
40
60
80
100
120
140
160
180
%USD m.
Sales EBITDA, % EBITA, %
BraunAbility
> Organic sales growth +3 percent in constant
currency
> EBITA margin impacted by voluntary product
recall
> Continued investments in supply chain
optimization
14
Q3 2018
A manufacturer of wheelchair accessible vehicles and wheelchair lifts
012345678910
0
100
200
300
400
500
600
2014 2015 2016 2017 201812 m. rolling
%USD m.
Sales EBITDA, % EBITA, %
Laborie
> Organic sales growth +15 percent in constant
currency
> Growth driven by strong urology business
> Profitability improved, EBITA margin returning to
more normal levels
> Continued focus on integration of Cogentix Medical,
restructuring of European business
15
Q3 2018
A provider of innovative capital equipment and consumables for the diagnosis and treatment of urologic and gastrointestinal (GI) disorders
-15
-10
-5
0
5
10
15
20
25
30
0
10
20
30
40
50
60
70
80
90
%USD m.
Sales EBITDA, % EBITA, %
3 Scandinavia
> Subscription base +15,000 driven by Hallon and
Oister
> Service revenue increased by 1 percent, supported
by stronger DKK
> EBITDA improved, but adjusting for IFRS 15,
EBITDA declined by 1 percent, negatively impacted
by the previous Danish VAT ruling
16
Q3 2018
A provider of mobile voice and broadband services in Sweden and Denmark
0
5
10
15
20
25
30
0
2 000
4 000
6 000
8 000
10 000
12 000
2014 2015 2016 2017 201812 m. rolling
%SEK m.
Sales EBITDA, %
EQT
> -2 percent value change in constant currency
> Adjusting for sharp value decline in listed Chinese holding LBX, value increased slightly
> Net cash flow to Investor amounted to SEK 338 m.
> SEK 18.4 bn. value of our EQT investments
> Decision to review options to develop EQT, including strengthening of balance sheet
17
Q3 2018
0
1 000
2 000
3 000
4 000
5 000
2014
SEK m.
2017201620152013 YTD 2018
Net cash flow to Investor
EQT AB EQT Equity EQT Infrastructure EQT Credit EQT Midmarket EQT Ventures EQT Real Estate
Strategic priorities going forward
18
> More companies to become best-in-class
> Gradually strengthen ownership in selected holdings
> Continue to invest selectively in EQT funds
> Continued profitable growth in the existing companies
> New platforms in the Nordics and North America
> High quality
> Efficiency
> Pay a steadily rising
dividend
> Generate an attractive
total shareholder
return
LISTED CORE
INVESTMENTS
CORPORATE
FUNCTIONS
Interim Management Statement
January – September 2018Financials, Helena Saxon, CFO
Financial highlights
> Based on estimated market values of
Patricia Industries, adjusted Net Asset
Value amounted to SEK 421 bn., an
increase by 7 percent
20
Q3 2018
0
100
200
300
400
500
181716151311 141009 12080499 0502 07060098 0301
SEK bn.
372
421
Reported NAV
Adjusted NAV
Listed Core Investments
21
Q3 2018
-3 000
-2 000
-1 000
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
SEB NasdaqWärtsiläAstra
Zeneca
Saab Epiroc ElectroluxABB
SEK m.
HusqvarnaAtlas
Copco
Sobi Ericsson
> SEK 316 bn., 75% of total adjusted assets
> Total Contribution to NAV SEK 25 bn.
> TSR was 9% vs. SIXRX 7%
TSR % 33 17 13 8 16 20 7 0 -4 -1 -10 -7
Patricia Industries
22
Estimated market value development Q3 2018 vs Q2 2018
00331
161759
1 186
23
Total NAV
Sep 30, 2018
Financial
Investments
SarnovaPiab Patricia CashVectura
119 391
-426
-69
849
Laborie
117 053
3
-304
The Grand
Group
Permobil
-172
Mölnlycke BraunAbilityTotal NAV
Jun 30, 2018
Aleris
Major drivers of estimated market value Q3 2018
23
SEK +1.2 bn.Higher profit and cash flow impacted positively,
currency impacted negatively
Company
Est. market value
change Q3 2018 vs.
Q2 2018
Comment
SEK +0.3 bn.Cash flow and higher profit impacted positively,
multiples impacted negatively
SEK +0.8 bn. Cash flow and multiples impacted positively
SEK +0.8 bn. Higher profit
SEK -0.3 bn. Lower profit
Financial Investments
> Value essentially unchanged
> Strategic intent to gradually reduce the
portfolio remains
24
Q3 2018
4 214 m.
Atlas Antibodies
Other833 m.
Acquia
422 m.
509 m.
Neuronetics
1 599 m.
NS Focus
382 m.
Madrague
SEK 7 959 m.
2% of total adjusted assets
Leverage development
> Leverage 4.9% (3.5%) as of September 30, 2018
> Net debt SEK 19.1 bn.
> Gross cash SEK 13.6 bn.
> EUR 500 m. 2030 bond issued at all-in fixed
1.52% interest rate, EUR 230 m. of 2021 bond
bought back
> Average maturity of the debt portfolio 10.6 years
25
Current rating
Standard & Poor’s AA-
Moody’s Aa3
-15
-10
-5
0
5
10
15
20
25
30% Quarterly leverage development, 10 years
Leverage target range Leverage Maximum leverage
Q&A
Financial calendar & Contact details
Event Date
Year-End report, January – December 2018 January 24, 2019
Interim Management Statement, January – March 2019 April 24, 2019
Interim Report, January – June 2019 July 17, 2019
Interim Management Statement January-September 2019 October 18, 2019
27
Contact details
Viveka Hirdman-Ryrberg +46 70 550 3500
Head of Corporate Communication and Sustainability [email protected]
Magnus Dalhammar +46 73 524 2130
Head of Investor Relations [email protected]