Slides
Page 1
Presentation, April 2 Ependion strengthens its position in the energy sector through the acquisition of Welotec
Page 2
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, THE UNITED KINGDOM, AUSTRALIA, BELARUS, CANADA, HONG KONG, JAPAN, NEW ZEALAND, NORTH KOREA, RUSSIA, SINGAPORE, SOUTH AFRICA, SOUTH KOREA, SWITZERLAND OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR ANY OTHER MEASURE IN ACCORDANCE WITH APPLICABLE LAW.
Page 3
An acquisition to strengthen our position in the energy segment and in Edge Computing Focused on large customers in the energy and manufacturing industry segments Pioneer with 10+ years of experience in substation automation for critical energy infrastructure and rugged environments 70 employees in Laer, Germany Sales 2024: 24M€ CAGR 2020-2024 +12% EBIT 2024 13.4% Sales 2024 24M€ EBIT 2024 +13.4% CAGR 2020-2024 +12%
Page 4
An edge computer in industrial applications is placed close to the physical equipment – in contrast to cloud computing – which brings several advantages: Key aspects of Edge Computing Low latency with data processing close to the source Reduced bandwidth usage in remote or high-data environments Improved reliability for mission-critical operations if connectivity is lost Security is improved when sensitive data is processed locally Efficient scalability by adding local computing devices Many possible applications, for example onboard trains and in power substations.
Page 5
Smarter grids – a fast-growing market 40% > 40Y of EU distribution grids are over 40 years old €584 bn 2030* *EU Commission 2024. 24% of global grid investments up to 2050 for digitalization Total 5 trillion USD* *BloombergNEF 2023 3X by 2050 Transmission and distribution investments need to threefold* *McKinsey Global Energy Perspective 2024
Page 6
Huge potential in the energy segment: Sweden as an example Power station Generate electricity Substation transformer Raises the voltage of the electricity for efficient transportation Substation transformer Lowers the voltage of the electricity ready to deliver for everyday use Homes and businesses Transmission networks Transports electricity over long distances to feed into the distribution networks Distribution powerlines The poles and wires that supply electricity to homes/businesses A total of 50-60 000 substations in the Swedish transmission and distribution networks. Expected grid investments SEK 400 bn until 2030.
Page 7
Facts about the acquisition Ependion, through its business entity Westermo, has entered into a binding agreement to acquire all shares in Welotec GmbH for an initial cash consideration of MEUR 35.2 (approx MSEK 3871), on a cash and debt-free basis A performance-based earn-out of up to MEUR 14.8 may be paid dependent on Welotec’s results in 2025-2026, to be settled in the first half of 2027 The acquisition is expected to be EPS accretive from the completion of the acquisition (adjusted for non-cash flow impacting amortizations from the transaction) During the twelve-month period ended 31 December 2024, Welotec reported a turnover of approximately MSEK 2692 and operating profit of approximately MSEK 362, corresponding to a margin of about 13.4 percent The completion of the acquisition is expected to occur in the second quarter of 2025 and is only subject to customary completion conditions 1) Based on the EUR/SEK exchange rate of 11.00, the final acquisition cost in SEK will be determined on the completion date. 2) Based on the EUR/SEK exchange rate of 11.43 as of 31 December 2024.
Page 8
Transaction financing, equity issue and support from shareholders The purchase price will be paid in cash upon completion and is intended to be partially financed through a directed share issue of approximately MSEK 300, provided that the AGM on 13 May authorises the Board to decide on the share issue, as well as from available cash resources Ependion has appointed Danske Bank to explore conditions for carrying out the directed issue when necessary market conditions are deemed to exist If the issue has not been completed before the acquisition is finalised, the initial purchase price will be financed through a bridge loan facility Net debt / adj. EBITDA LTM amounted to 1.2x as of December 2024. Following the completion of the acquisition and the directed share issue, net debt / adj. EBITDA is expected to amount to approx. 1.3x Stena Adactum AB and Svolder AB, Ependions two largest shareholders, have expressed their intentions to invest in the directed share issue of up to an amount corresponding to their ownership and have also committed to vote in favour for the authorisation at the AGM. Stena Adactum represent 29.5% of the shares and Svolder 15.2% of the shares in Ependion.
Page 9
Strong strategic fit – unmatched rationale ✓ ✓ Welotec
Page 10
Q & A
Page 11
Important information This presentation does not constitute or form part of, and should not be construed as, an offer, or a solicitation of an offer, to subscribe or purchase any shares or any other securities in Ependion. The information in this presentation may not be announced, published, copied, reproduced or distributed, directly or indirectly, in whole or in part, within or into United States, the United Kingdom, Australia, Belarus, Canada, Hong Kong, Japan, New Zealand, North Korea, Russia, Singapore, South Africa, South Korea, Switzerland or in any other jurisdiction where such announcement, publication or distribution of the information would not comply with applicable laws and regulations or where such actions are subject to legal restrictions or would require additional registration or other measures in accordance with applicable law. This presentation does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the “SecuritiesAct”),and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There is no intention to register any securities referred to herein in the United States or to make a public offering of the securities in the United States. This presentation is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the “ProspectusRegulation”)and has not been approved by any regulatory authority in any jurisdiction. Ependion has not authorized any offer to the public of shares or rights in any member state of the EEA and no offering prospectus has been or will be prepared in connection with the directed new share issue. This presentation is only addressed to and directed at persons in member states of the EEA who are “qualifiedinvestors” within the meaning of Article 2 (e) of the Prospectus Regulation. The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with qualified investors. This presentation should not be acted upon or relied upon in any member state of the EEA by persons who are not qualified investors. This presentation does not constitute an offer of securities to the public in the United Kingdom, and no prospectus has been or will be approved in the United Kingdom in respect of the securities. In the United Kingdom, this presentation is only being distributed to, and is only directed at “qualifiedinvestors”(within the meaning of Article 2(e) of Regulation (EU) 2017/1129 of 14 June 2017 as it forms part of domestic law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 ) who are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”)or (ii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevantpersons”). In the United Kingdom, any investment or investment activity to which this presentation relates is available only to, and will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this presentation or any of its contents. This presentation does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the new shares. Any investment decision in connection with the directed new share issue must be made on the basis of all publicly available information relating to Ependion and the company's shares. Such information has not been independently verified by the Danske Bank as Sole Global Coordinator and Bookrunner. The information contained in this presentation is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this presentation or its accuracy or completeness. Danske Bank is acting on behalf of Ependion in connection with the transaction and not on behalf of anyone else. Danske Bank will not be responsible to anyone else for providing the protections afforded to its clients nor for giving advice in relation to the transaction or any other matter referred to herein. This presentation does not constitute a recommendation concerning any investor’soption with respect to the directed new share issue. Each investor or prospective investor should conduct his, her or its own investigation, analysis and evaluation of the business and data described in this presentation and publicly available information. The price and value of securities can decrease as well increase. Past performance is not a guide to future performance.
Page 12
Forward-looking statements This presentation contains forward-looking statements that reflect Ependion's intentions, beliefs, or current expectations about and targets for the company's future results of operations, financial condition, liquidity, performance, prospects, anticipated growth, strategies and opportunities and the markets in which the company operates. Forward-looking statements are statements that are not historical facts and may be identified by words such as “believe”,“expect”,“anticipate”,“intend”,“may”,“plan”,“estimate”,“will”,“should”,“could”,“aim”or “might”,or, in each case, their negative, or similar expressions. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Ependion believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that they will materialize or prove to be correct. Since these statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward looking statements as a result of many factors. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this presentation by such forward-looking statements. Ependion does not guarantee that the assumptions underlying the forward-looking statements in this presentation are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this presentation or any obligation to update or revise the statements in this presentation to reflect subsequent events. Readers of this presentation should not place undue reliance on the forward-looking statements in this presentation. The information, opinions and forward-looking statements that are expressly or implicitly contained herein speak only as of its date and are subject to change without notice. Neither Ependion nor anyone else undertake to review, update, confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this presentation, unless it is required by law or Nasdaq Stockholm’sRulebook for Issuers of Shares. Information to distributors Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFIDII”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFIDII Product Governance Requirements”),and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer”(for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the shares in Ependion have been subject to a product approval process, which has determined that such shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “EU Target Market Assessment”). Solely for the purposes of each manufacturer's product approval process in the United Kingdom, the target market assessment in respect of the shares in Ependion has led to the conclusion that: (i) the target market for such shares is only eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook, and professional clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MiFIR"); and (ii) all channels for distribution of such shares to eligible counterparties and professional clients are appropriate (the “UK Target Market Assessment” and, together with the EU Target Market Assessment, the “Target Market Assessment”). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the shares in Ependion may decline and investors could lose all or part of their investment; the shares in Ependion offer no guaranteed income and no capital protection; and an investment in the shares in Ependion is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the directed new share issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Danske Bank as Sole Global Coordinator and Bookrunner will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II or UK MiFIR; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the shares in Ependion. Each distributor is responsible for undertaking its own target market assessment in respect of the shares in Ependion and determining appropriate distribution channels.