Interim Management Statement, January-September 2017 Q3 2017 Overview
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Interim Management Statement, January-September 2017 Q3 2017 overview YTD: Adjusted NAV +14 percent, reported NAV +15 percent, TSR +21 percent (SIXRX +12 percent) Q3: Adjusted and reported NAV +1 percent, TSR -1 percent (SIXRX +2 percent) Listed Core Investments: Ronnie Leten nominated as new Chairman in Ericsson, additional shares purchased in Ericsson Mixed performance in Patricia Industries, EUR 450 m. distribution from Mölnlycke Value of EQT investments increased by 3 percent in constant currency, SEK 0.3 bn. net cash flow to Investor 2 Listed Core Investments – Q3 summary > Total return +2 percent (SIXRX +2 percent) > High activity in the companies – Ericsson: Ronnie Leten proposed new chairman, Investor purchased shares for SEK 1.2 bn. – Atlas Copco: New Management Team and five board members appointed for Epiroc – Wärtsilä: Important orders within the Energy segment – ABB: strategic acquisition of GE Industrial Solutions – Nasdaq: strategic acquisition of eVestment LISTED CORE INVESTMENTS 3 Patricia Industries – Q3 summary > Adjusted market value of SEK 92 bn. (excluding cash), total return -1 percent > Priorities: – Developing the existing companies – New platform companies in the Nordics and in North America – Manage Financial Investments for value and cash 4 Mölnlycke Q3 2017 > Organic sales growth 1 percent in EUR m. % constant currency 1 600 35 1 400 30 1 200 25 1 000 20 > Growth driven by Emerging Markets. U.S. 800 15 600 and Europe essentially flat 400 10 200 5 0 0 > Underlying profitability lower than last year 2013 2014 2015 2016 2017 Rolling 12 m. but higher sequentially Sales EBITDA, % EBITA, % > EUR 450 m. distributed to Patricia Industries A provider of single-use surgical and wound care products for customers, health care professionals and patients Permobil Q3 2017 > Organic sales growth 3 percent in SEK m. % 4 000 25 3 500 constant currency 3 000 20 2 500 15 2 000 1 500 10 > Growth driven by Seating & Positioning 1 000 5 500 and Power products 0 0 2013 2014 2015 2016 2017 Rolling 12 m. > EBITA margin improvement driven by Sales EBITDA, % EBITA, % operating leverage > Initial positive market response to new product introductions > Several complementary acquisitions announced A provider of advanced mobility and seating rehab solutions Laborie Q3 2017 > Organic sales growth 3 percent in USD m. % 135 25 constant currency 130 125 20 120 15 115 > Profitability continued to improve despite 110 10 105 5 significant investments in business 100 95 0 development and operations 2015 2016 2017 Rolling 12 m. Sales EBITDA, % EBITA, % > Michael Frazette new CEO, effective September, 2017 A provider of innovative capital and consumables for the diagnosis and treatment in urologic and gastrointestinal (GI) disorders Aleris Q3 2017 > Organic sales growth 1 percent in constant SEK m. % currency 12 000 6 10 000 5 8 000 4 > EBITA margin higher than last year, improved 6 000 3 profitability in Healthcare offset a decline in 4 000 2 2 000 1 Care 0 0 2013 2014 2015 2016 2017 Rolling 12 m. > Acquisition of Christinakliniken, enhancing its Sales EBITDA, % EBITA, % offering with cancer treatment in Stockholm A provider of healthcare and care services in Scandinavia BraunAbility Q3 2017 > Organic sales growth 11 percent in USD m. % 600 10 constant currency 550 500 8 450 6 400 > Recovery in Consumer WAV business 350 4 300 2 250 driven by strong demand for new products 200 0 2013 2014 2015 2016 2017 Rolling 12 m. > EBITA margin flat as higher volumes were Sales EBITDA, % EBITA, % offset by production ramp-up costs A manufacturer of wheelchair accessible vehicles and wheelchair lifts 3 Scandinavia Q3 2017 > Subscription base -14,000, driven by SEK m. % 12 000 30 lower number of customers with multiple 29 10 000 28 subscriptions in Sweden 8 000 27 26 6 000 25 24 4 000 23 > Strong momentum for Hallon and Oister 2 000 22 21 0 20 2013 2014 2015 2016 2017 > Service revenue declined by 1 percent Rolling 12 m. Sales EBITDA, % > EBITDA -3 percent due to decline in service revenue, higher OPEX > Continued strong cash flow A provider of mobile voice and broadband services in Sweden and Denmark EQT Q3 2017 SEK m. Net cash flow 5 000 EQT AB SEK 13 981 m. 4 000 EQT Equity 4% of total adjusted 3 000 EQT assets Infrastructure 2 000 1 000 EQT Credit EQT Midmarket Value change 3 percent in 0 2012 2013 2014 2015 2016 YTD 2017 constant currency EQT Ventures EQT Outstanding commitment Draw-downs Proceeds to Investor Real Estate SEK 12.0 bn. SEK 872 m. SEK 1 212 m. Strategic priorities going forward LISTED CORE > More companies to become best-in-class INVESTMENTS > Gradually strengthen ownership in selected holdings > Continued profitable growth in the existing companies > Pay a steadily rising > New platforms in the Nordics and North America dividend > Generate an attractive > Continue to invest in EQT funds total shareholder return CORPORATE > High quality FUNCTIONS > Efficiency 12 Interim Management Statement January-September 2017 Financials, Helena Saxon, CFO October 17, 2017 Financial highlights Q3 2017 SEK bn. > Reported Net Asset Value amounted to SEK 350 336 336 bn., an increase of SEK 4.3 bn., 300 corresponding to an increase of 1% during the quarter. 250 200 > Based on estimated market values of 150 Patricia Industries, adjusted net asset value 100 amounted to SEK 380 bn. 50 0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Contribution to Reported Net Asset Value Q3 2017 SEK m. Listed Core Investments Q3 2017 5 000 4 000 SEK 285 857 m. Total Contribution to NAV SEK 4 242 m. 73% of total 3 000 adjusted assets 2 000 1 000 0 -1 000 Investments in Ericsson for SEK 1 245 m. -2 000 -3 000 Patricia Industries Estimated market values vs. reported values – September 30, 2017 SEK 45 bn. SEK bn. 100 92 90 80 SEK 36 bn. 70 60 54 50 48 SEK 40 5 bn. SEK 30 4 bn. 18 20 9 10 8 7 7 4 4 5 4 5 4 3 3 2 2 1 0 0 Financial Investments Excl. cash Estimated market value Reported value 17 Patricia Industries Estimated market value development Q2 vs Q3 2017 SEK m. Of which SEK 4 289 Of which SEK 4 289 paid distribution to received distribution Patricia Industries from Mölnlycke *) Laborie is shown at cost as it was acquired less than 18 months ago Major drivers of estimated market value Q3 2017 Est. market value Company Comment change Q3 vs. Q2 Higher multiples, lower operating profit, currency SEK -0.9 bn.*) impacted negatively SEK -0.3 bn. Lower multiples, currency impacted negatively Cash flow positive driver, operating profit SEK 0.2 bn. impacted negatively, multiple flat Operating profit and cash flow positive drivers, SEK 0.2 bn. lower multiples impacted negatively *) Adjusted for a distribution of SEK 4.3 bn. 19 Financial Investments Q3 2017 > Smaller follow-on investments > Divestitures amounted to SEK 0.6 bn., three companies were fully exited SEK 7 289 m. 2 percent of total assets Financial Investments consists of all former Investor Growth Capital (IGC) investments and other holdings Leverage development > Leverage 3.4% (5.3%) as of September 30, 2017 > Net debt amounted to SEK 11.9 bn. > Investor’s gross cash amounted to SEK 18.7 bn. > Average maturity of the debt portfolio 10.1 years Current rating Standard & Poor’s AA- Moody’s Aa3 Financial calendar & Contact details Event Date Year-End Report 2017 January 23, 2018 Interim Management Statement, January – March 2018 April 20, 2018 Interim Report January – June 2018 July 17, 2018 Interim Management Statement January – September 2018 October 17, 2018 Contact details Stefan Stern +46 70 636 7417 Head of Corporate Relations, Sustainability and Communications [email protected] Magnus Dalhammar +46 73 524 2130 Head of Investor Relations [email protected] Peder Ramel Executive Board Member Hi3G Access AB . Challenger position in DK & SE . Mobile only . 3.3 million subscriptions . Turnover 11.5 billion SEK . 3.1 billion EBITDA result . 27% EBITDA margin . 2 160 employees . Annual growth since launch 2003 Datum: 2017-10-17 4 000 3 000 2 000 1 000 0 -1 000 -2 000 EBITDA in million SEK Datum: 2017-10-17 3 500 000 3 000 000 2 500 000 2 000 000 1 500 000 1 000 000 500 000 0 Opex in million SEK Total subscriptions Scandinavia Datum: 2017-10-17 2,644 2,062 1,840 1,876 UFCF* (SEK m ) 1,277 766 598 295 Datum: 2017201-10-17 201 201 201 201 201 201 2017 YTD 0 *UFCF1 excluding lincence2 investments. All 3DKK numbers are4 translated to SEK5 using Q3 17 SEK6 rate Q3 Closer look at Sweden. Datum: 2017-10-17 . 2.1 million subscriptions . 7.4 billion SEK Turnover 2016 . 68 stores and 900 resellers . 99.8% Population Coverage (86% 4G) . “Cleaning” the base, shifting focus to number of customers/value rather than number of subs . Second brand Hallon – simple and competitive prepaid subscriptions without binding Sida 29 Sveriges lägsta fasta pris är här. Video calls before Mobile Affordable flat- Facetime broadband rate 4G+ VoLTE 03 05 06 07 12 14 15 16 17 Online music Mobile TV Zero-rating WiFi-Calling before Spotify before music YouTube streaming Datum: 2017-10-17 2 068 2 016 1 889 1 690 1 553 1 369 1 219 1 052 823 599 476 345 265 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Datum: 2017-10-17 14% Telia 38% 19% Tele2 Telenor 3 29% Reported subscriptions from Q2 2017 Datum: 2017-10-17 Closer look at Denmark.