Bergman & Beving (BERG) DNB Carnegie Småbolagsdag summary

Company background and business model

• Celebrating 120 years and 50 years on the stock exchange, with a legacy of spinning off several listed companies.

• Operates as a serial acquirer, focusing on business-to-business technology companies in niche markets.

• Owns 36 business groups, primarily in the Nordics and UK, with a strong emphasis on decentralization and capital allocation.

• Maintains a disciplined acquisition strategy, targeting companies with proven earnings and high margins.

• Aims to double profits every five years, with two-thirds of growth from acquisitions and one-third organically.

Financial performance and margin development

• Gross margin increased from 40% to 47% over recent years by phasing out low-margin business.

• Organic sales growth has been negative, but profitability and margins have improved.

• Operating margin target is 10%, with a long-term ambition to increase by one percentage point per year.

• Recent quarters have seen record-high margins, with further improvement expected as market conditions recover.

• Return on capital (RENK) target is 45%, essential for self-financed growth and continued acquisitions.

Market conditions and outlook

• 65% of revenue comes from the Nordics, with 60% industrial and 40% construction exposure.

• Recent market softness, especially in Sweden and Finland, but signs of recovery are emerging, particularly in construction.

• Structural divestments, such as Skydda Norden and parts of Asian and Baltic operations, have been executed to focus on core strengths.

• Acquisition market currently has fewer quality targets and buyers, but pricing remains stable.

• No significant change in acquisition market dynamics expected in the near term.