Hi, and welcome to Storskogen's presentation of our first quarter here in 2021. My name is Daniel Kaplan, and I'm the CEO and Co-Founder. Together with me today, I have Lena Glader, CFO. Hi. Welcome. First, I'd like to promote our second section, where I interview our Business Area Head for Industry, Fredrik Bergegård, and also Truls Browall, where we discuss the interaction between M&A and the Business Areas when we acquire companies. How are we performing this year? It started off quite well. We've had 41% organic growth, a total growth of 68% on the EBITDA line, which is, of course, satisfactory. We've done 27 acquisitions so far, out of which 18 in the first quarter. We had a turnover of almost SEK 3 billion in the first quarter as well, I might add. We're growing. We're now an international company with operations in 12 countries and soon to be about 5,000 employees. We're moving ahead. Lena. Excellent. So, let's have a look at the numbers here. The Q1 2021, as you said, Daniel, started off pretty well. We had a total net sales of SEK 2.9 billion, which is a growth of 40%. We had 9.4% EBITDA margin, which is an improvement of 1.6 percentage points compared to the previous year, and an organic growth, as you said, of 41%. So, on this page, I'd like to bring your attention to a couple of key metrics. So, let's start off with the column to the right here, where we show the rolling 12 months. So, from April 2020 to March 2021, we had a total revenue of SEK 9.8 billion and an EBITDA of a little bit short of SEK 1 billion. If we'd owned these subsidiaries the entire 12-month period, shown on the pro forma lines here, the EBITDA would have been not SEK 1 billion, but actually SEK 1.4 billion. The EBITDA, calculated in a similar way, would be SEK 1.8 billion. On this page, you can also see that the return on equity has improved from 10%-14%. The return on capital employed has improved from 9%-10%. A slight improvement there also. Finally, the cash flow is normally a bit weaker in Q1. As you can see, we had actually negative cash flow last year in Q1. This year, we had a positive cash flow with a cash conversion of 53%. On a rolling 12-month period, the cash conversion was actually 83%. That's actually higher than the Storskogen average. The net debt to EBITDA was 2.2, measured on the entire net debt and measured on only the interest-bearing part of the net debt. The net debt to EBITDA was 1.7. And then we have some graphs here showing, to the left, you have the quarterly sales and the EBITDA margin. As you can see, the sales increase was quite substantial in Q4 and Q1 due to acquisitions mainly. And the EBITDA margin has been pretty stable with some seasonality at around 10%. And to the right, we show, again, the rolling 12-month EBITDA. And as you can see here, it's actually grown from SEK 580 million a year ago to SEK 960 million in Q1 this year. And as Daniel will shortly tell you, we have actually made some acquisitions even after March. So, this kind of rolling 12-month profit will likely increase going forward, all else equal. Right. So, if we're talking in more detail about the first quarter, it was a great performance by our business areas and by our companies. Why is that? I think, first of all, during COVID, we've had a pretty tight cost control. As we can see now, the business cycle is gradually improving. We retained that tough cost control, which basically increases productivity and profits. If we take each and every business area, you would have the Trade business area. We have a strong performance almost across the line. They're quite COVID resilient. Some of them are actually beneficiaries of the COVID. They're developing quite nicely, and they're also scalable with their own brands and everything. We foresee actually that they will continue to have a strong growth even going forward. If we take Services, that's the fastest-growing business area we have with lots of acquisitions. They also had a strong organic quarter. Normally, the first quarter is actually the weakest in the service area. It's cold, so it's hard to dig for the infrastructure companies. We actually see still that there is price competition in the installation and painting businesses. However, our education, digital services, construction, and logistics are all doing very well. So, all in all, they had a strong, especially March, which drives the service organic growth this quarter. If we take industry, they were the hardest hit last year, especially in the second quarter. They actually had a strong first quarter with the exception of the second half of March. However, this year, we can see a clear bounce back where a lot of the majority of companies are actually starting to perform pretty well. Our two biggest business areas, business units, Swedstyle and Aura Group, and they're both doing very, very well. So, of course, that increases our margin and profitability overall. If we take a look at the numbers on the business areas, please, Lena? Yes, thank you. There's a lot of numbers on this page, I know. And if you want to know more and have a closer look at that, I recommend you to actually download the Q1 report from our homepage. But very briefly here, stating in numbers what Daniel actually just said, is that services had the best organic growth and actually acquired growth as well in Q1 compared to Q1 last year. You can see here that the number of business units in the business area services has increased from 21 last year to 36 this year. So, that's 15 acquisitions during the last 12 months here. But the growth is not only acquired, it's, as you said, organic as well. And the margin has improved here from 6.3% in Q1 last year to 9% this year. Trade has also made quite a lot of acquisitions the past 12 months. The number of business units here has increased from 11 to 17 over the course of the last 12 months. Trade has also had a quite good organic EBITDA margin growth as well and increase. The EBITDA margin has improved from 7% last year to now 10.6%. Lastly, industry has the lowest growth, even though it's a 10% top-line growth and 22% EBITDA growth, due to the fact that industry has made the fewest acquisitions of these three business areas during the past 12 months, having added only two business units during this period. Nevertheless, industry has been able to maintain quite a good margin despite the fact that commodity prices have increased and not all business units have managed to keep up their own pricing to the same extent. Their productivity has improved, and they have been really efficient with cost management. So, the margin has actually improved despite this compared to last year from 10.9% to 12.1% in Q1 this year. So, moving on, we have made quite a few acquisitions: 27 last year, 27 so far to date this year. But in fact, we do also have the organization to take care of it. As we're growing, we're also developing. So, Lena and Alexander heads up our central functions, including Lena's controlling and finance, communication, and IR, whereas Alexander heads up M&A, corporate development, ESG, and HR. Below that, we do have a matrix with the business areas on one on the vertical and the countries or geographical areas on the horizontal. And of course, we've had Lars Nottehed, who joined us as the head of Germany in March. We also brought on Jan Ebbesen in Denmark. And in fact, the M&A team is actually three times as big now as it was in the beginning of the year. All in all, more than 40 people in the head office and also out in our geographies taking care of our businesses. That's a little bit about the organization. If you talk about acquisitions, like I mentioned, we've done quite a few acquisitions. It's no coincidence. We have a significant deal flow, quite a lot higher than we've ever had before. I guess at this point, we have more than 100 ongoing discussions, more or less at any given point. We've strengthened the M&A organization, but we're also strengthening our international teams going forward with a number of M&A people coming in both in Germany, as well as in the U.K. and in the Nordics in the following months. But we've also made a conscious decision to buy a little bit bigger companies abroad in our new platform acquisitions with bigger teams and a more diverse customer supplier base, basically to reduce operational risk, but also from a reputational standpoint that the first platform acquisitions should be really high-quality companies, also decreasing our general operational risk as we move and increase the operational complexity as we move outside in the world. This, of course, costs a little bit more, but also adds a little bit more organic growth potential to the portfolio. so, does this mean that we're doing lots of acquisitions poorly? well, in fact, I would say the opposite. The fact that we're doing so many acquisitions really builds expertise out in the business areas, in the finance team, but not to say least in the M&A team. So, we build close relationships with our suppliers on the legal or financial due diligence side. Of course, when we've done 80 acquisitions together, they know what we think about various aspects in the legal documents, for example. Also, we build quite close relationships to the brokers or the company sellers. And they know more and more about the deal certainty that we provide as a buyer. And so, they can advise their sellers better with regard to us. So, if you look concretely, we've done quite a few milestone acquisitions during these first four months. We did our first Danish acquisition of Danmatic, an automation company in Denmark. We bought PerfectHair.ch, an e-commerce company quite dominant in the market for haircare products in Switzerland. SGS, which is also a market leader with about 50 million SEK in EBITDA in the UK, providing products for the garage and also like power tools and stuff like that. And all in all, we also decided that we were going to make a few bigger acquisitions. The first one we announced, Wibe Group, which is based in Mora but also has a big factory in Holland. It's a more complex acquisition than we've ever made before, but we think that it's going to be a great add-on to our industrial business area. So, if we look at the strategic development, first of all, on the financing side, this is, of course, to enable our business strategy for us to be able to fulfill our business strategy. We issued our first bond, a SEK bond. It was very successful. It's actually probably the second biggest ever in Sweden of its kind. And we got a decent price, and it was heavily oversubscribed. So, we're very happy with that. And hopefully, we've opened the door to access a different kind of capital for the future as well. We're also conducting a private placement right now. We're targeting big financial investors, professional financial investors. The minimum ticket is SEK 50 million. And in addition to that, also new company sellers. At this point, we have more than SEK 1.7 billion. And I think, depending on the transactions going forward, I think it will be a bit bigger than that in the end. So, it's very successful, I should say. We're doing that on 250 SEK per share, which is the equivalent of SEK 32.5 billion in valuation. In addition to that, we are complementing our current lending bank consortium with additional banks, with the ambition, of course, to have commercial banks supporting us in our international rollout, but also in other financial processes that we're doing. And finally, the thing that you're all waiting for, we are evaluating an IPO if the market allows. And we'll get more in contact with you regarding that, our dear shareholders, as that process and valuation moves along. So, if we take the strategic developments going forward, I mean, we're really pushing now, developing our organization and expertise in business areas and segments, in M&A, in finance. We're working hard now with a corporate culture to remain and retain entrepreneurial long-term and really serious about building the best companies that we can. Financial control and governance are key when you're growing. We have a diverse set of companies. Our internationalization continues. We're strengthening our current teams in the UK, DACH, and the Nordics, but we're also looking at new geographies for next year. We have an increased ESG focus. We have a large inflow of new companies. We always have an improvement agenda for those and our existing. We'll never be finished. We'll never be the best. But we do have a high ambition on that level to be really a force driving change in our companies and making them long-term competitive even in the ESG arena. Finally, we are expanding our acquisition criteria. We're always looking to enter into new segments, to new geographies. We're buying a few bigger companies, even a few portfolios of companies. This, of course, gives us a diversified, profitable base of companies and gives us the stability to be able to do that high acquisition growth as well. So, in conclusion, if you look at the first quarter or the first four months, it's been a very satisfactory period for us with a strong organic growth and a fantastic, I have to say, acquisition growth as well. And also, the strategic developments we've made during these months have been quite significant for us. So, we're very happy about that. So, thank you for myself and Lena. Thank you. Don't forget to watch the video with myself and Fredrik and Truls discussing industry and acquisitions in the business areas. Thank you very much. Thank you. Bye-bye. Bye. Hi, and welcome to Storskogen. My name is Daniel Kaplan. I'm the CEO and Co-Founder of Storskogen. Today, we're going to meet Fredrik Bergegård, heading up our industry business area. Welcome. Thanks. So, before we get into business, who are you? So, my name is Fredrik, and I have, over the last 18 months or 18 years, been in various executive positions in mainly manufacturing and distribution industries in Sweden and with responsibility around the world. Before that, I also was a strategy consultant for six years, and I have a master's background both in engineering and in an MBA from IMD in Switzerland. On a private note, I live here in Stockholm and have a with my wife and three kids, twins, Ebba and Erik, who is 15, and our older daughter, Rebecca, who's 18. Okay, so you can always pick them up at night when they're out partying, I guess, if you're feeling if you don't have anything to do in the weekend. Yeah. Picking up, driving to the different interests and activities takes a lot of time. All right, so tell me, how come you joined Storskogen? So, I really, really enjoy working with business development and people. At my last assignment at Ahlsell, who is one of the largest distributors in the Nordics, I had a responsibility for 2,000 salespeople, 130 stores, and we had a sales turnover of 22 billion SEK, which is a bit more than 2 billion EUR. So, worked a lot with growth, developing the business, working a lot with different regional heads, and so how to develop their teams, et cetera, et cetera. I really, really enjoy that. And when the opportunity came up to come to Storskogen, of course, this is very clear. We have a nice portfolio of companies with their CEOs and their management teams, and it's all about coaching and working together with them and develop their businesses, of course, their responsibility, but for us to coach and work together with them. Tell us a little bit about the Business Area Industry. Yeah. So, business area industry is still, in terms of turnover, the smallest, but soon to be the biggest, of course. We have a turnover of pro forma, as we say when we work with portfolio companies, of 3.4 billion SEK, roughly, if we had owned them for a full year, all of them. And with a really, really nice development on the EBITDA level as well. Portfolio of 18 companies currently. And centrally, we are a team of six people with what we call investment directors and investment managers, where we support the companies, work towards mainly the CEO and CFO of the companies. And yeah, have a structure of both board meetings, quarterly board meetings, and then monthly reviews for 30 minutes with each CEO in each company, and then ongoing troubleshooting and coaching. Yeah. So, I know, I mean, there's industrial technology, automation. Tell me a little bit about the different segments of. Yeah. So, within industry, you can say we're all manufacturing companies and all business-to-business manufacturing our products. So, we're split up in three segments. So, we have a portfolio of automation companies. Then we have a portfolio of industrial technology companies, which is typical subcontractors to larger manufacturers, automotive and so forth. And then we have product companies, so manufacturing companies with our own specific products, so to say. They are each around, actually equally large or equal size of about a bit more than a billion SEK in each segment. So, we're fairly equally split. What are the typical challenges that you face out in the companies? I mean, in general, we acquire, in line with our strategy, nice companies with good profitability, clear market niche, and so forth. But of course, there are always challenges. I would say in our business model, it's natural that, for example, when we buy or acquire a family-owned company, that there is an owner and typically a CEO who will want to phase out. So, I mean, but then in a very planned and structured way, we can work with the succession of the seller. Of course, in many cases, they are also the salesperson of the company. So, we overlook or look at what's needed in terms of also maybe having a bit more systematic sales. But then as well, we make sure that we invest in the company and that we allow them to have availability of products and so. But I would say the planned succession is probably the most critical step. I know that the industry area was actually quite hard hit during COVID, but I also know that we did significant investments in new factories and machinery and market share and stuff like that. So, how are they doing now in the first quarter? Yeah. So, we have had a really, really nice first quarter. My predecessor and one of the co-founders, Ronnie Bergström, always said that we should do investments when times are a bit bad because that's when we have time to install the machines and do it, so to say. So, we actually continued planned investments during that time. And now when we have a bit more demand in the market, you could really tell that the investments we did and put in place really pay off. So, we have a really nice productivity gain in the first quarter, which is clear on the EBITDA level. And I see that that will continue for the rest of this year. And of course, we will continue to invest in our companies. So, you've been here for three months, something like that. So, what have you been doing during these first months? Yeah. So, I mean, it's been a lot to do, and I had a really, really good experience. So, I've seen all the companies in a digital way. And about half of them, I've had the opportunity to take my car and drive around and to meet and see. So, and I think we can see some pictures. I took my mobile camera and just took some video clips. So, there is a wide span, as we discussed, with the segments from our foundries. Foundries, yeah. Exactly. Thanks. Where, of course, that's much more traditional, and it's very warm and big components and products manufactured. Then maybe the more traditional companies like Swedstyle, for example, which is a very nice product company where we have more of the typical automated lines that you could imagine in a manufacturing company. Then we have a bit more of an odd bird in our portfolio, but a really, really nice company with the Svenska Grindmatriser, who's manufacturing integrated circuits. So, very small products, of course. So, been around looking, understanding what's critical to their business and how they operate and how they're organized and again, and so forth. Yeah. And in addition to that, we've done a few acquisitions this first quarter, actually 27 in the first four months. So, therefore, Truls Browall, welcome. Truls is from our M&A department. So, tell me, who are you? Truls Browall is my name. 31 years old, originally from Gothenburg on the west coast of Sweden, and I have a background from Deloitte, where I work with transactions on both sell side and buy side mandates for various kinds of companies, but since about two years, I've been with Storskogen, where I work in the M&A team with acquisition and where I'm involved from the initial dialogue to the closing and signing of all the companies. So, people often ask me, how is it even possible to buy like 30 companies a year and this year maybe 50 or 60? And the answer is actually Truls and his colleague Ville and Alexander and the M&A team. Nowadays, we're actually, we've increased the team up to nine people, but previously, I think Truls and Ville did everything. I should, until very recently. So, a lot of, you know, haven't worked long days at all, I guess. No, not at all. Very lazy, half-day time. Yeah. Half days. So, we bought, for example, a number of industrial companies this first quarter. One of them was Danmatic, our first Danish acquisition. So, I was thinking that we could go into a little bit of that process, how it worked and things like that, and how we work together as a team. Yeah. We received a case from a broker called Clearwater International last autumn. And in the beginning, we received a teaser, short information about the company. And based on that, it matched our criteria. And we went through and requested the IM, a so-called information memorandum. And together with the Business Area Industry, we made a thorough review of the company and also appointed the time with the company that we have a digital meeting with the company. So, based on that, we took the decision to go through with the transaction of Danmatic. And that means, of course, that goes up to actually a small investment committee where I myself am, and I'm Alexander, and the head of the business area, and we decide do we want to go through, do we want to submit a bid. But the key, actually, can I say from my perspective, is of course that we would never buy a company that the business area would dislike because we don't have an exit agenda. So, like I used to say, if we pee in the pants, there's no one to change it ever. And that's the business area task. So, yeah. So, that's when we decided to move forward. How was it even possible during COVID times to run this process? It was a bit special since I had just joined like a week ago, and this company was discussed on how to proceed, how should we do it because it was COVID and we couldn't travel and so forth. But then I ran into Truls, and we got to know each other a little bit in the corridor, and we said, hey, like, can you imagine to go? And I mean, for me, it's okay. And we got this written approval that it was business critical because really the sellers, they didn't want to sell without having met us. And we, of course, didn't want to really buy it without having seen the site. I think we even flew Sunday. Yeah. I flew with SAS from Arlanda to Copenhagen, and I was made two corona tests, both before boarding and when I landed. So, my nose was totally sore when I went to the factory. I took the car. I drove over the bridge, and then we went to see the place, and we could do the final negotiation, me and Truls, with the support of our advisors in Denmark. We really could close it now. So, I mean, in Sweden, we have a very close connection to the brokers. How did that work in Denmark? We actually made a broker letter, you can call it, that we sent out to all of our Nordic colleagues around Norway, Finland, Denmark, and even to the Baltics countries as well, and after that, we received a lot of cases from all the brokers around, so through that, it was a key opener to more cases, I would say. Yeah. But I know Clearwater in this case, they bought Valentum as well. And we've done lots of transactions with Valentum. So, that must have given us some kind of. Yeah. And now we have a close collaboration with Clearwater, especially. And they know how we work and what kind of company we like as well. I can tell that also the sellers, so to say, the business owners who's going to sell the. They know, so to say, who we are. They already, when we meet them, they understand, so to say, the benefits and differences and benefits of our business model compared to maybe other takers, possible takers. So, now we've done the acquisition. So, what happens then? Well, so, Truls and the M&A team, they have a very structured, so to say, agenda and routine process for us to follow. And so, once it was signed and closed, they kind of hand it over via this routine, ensuring that all the practical things get in place. And we, as mentioned, we have been along in the project doing the commercial due diligence, we understand the business and so, but also tying the connection or relation to the management. So, then they, so to say, are handed over to our responsibility, and we set up the structure with a board and do all the formal things. And we get set up the agenda with having quarterly board meetings now. We also have monthly business reviews with them. And we set up the financial follow-up. And also, now in a couple of months' time, we will do the annual business plan together so that we can start to plan the business going forward together. Yeah. So, how is Danmatic performing now after we have bought them? Excellent. Excellent. Which isn't always the case, but in this case. In this case, they actually continue to do very well, which we're happy with, and again, I think the sellers, they, so to say, wanted to hand it over to someone who would give a long-term perspective to the company, so I think we have a really good relation, and so we look forward to invest and develop Danmatic for the future, also help them with geographical expansion and so. A question, one step back, the last question. When we're talking about acquisition criteria, what did we like about Danmatic? Why did we buy it? First of all, they match our financial criteria, but they are also the market leader within their niche in Denmark and in the Nordic region. And they are also the one who can supply a whole and fully integrated process line within its segment. So, they are the only player who can do that. And they also have a strong underlying market that is growing and also have a quite close relationship to the customers as well. Yeah. So, quite a few different things to think about when we bought it. Yeah, and then they are an automation company, and we already have a number of automation companies. So, we can also, we understand the business, and they believe that we could be a good owner to actually contribute as well to the business. Yeah. Hopefully, we have more Danish company in the future. We also have a new colleague called Jan Ebbesen, who started in the M&A team just two weeks ago. So, that's fantastic. So, more Danish acquisitions to come. So, thank you very much for joining. And thank you for listening to us and watching this one. And don't forget to look at our quarterly report for Q1. And thank you very much. Bye.