Storskogen Group (STOR) Investor Update summary

Strategic direction and divestment rationale

• Announced divestment of nine business units to M Industrial Invest to enhance profitability and focus on core areas with higher growth potential.

• Divestment aims to improve organic growth, cash flows, reduce debt, and deliver on financial targets.

• Divested units had annual sales of SEK 1,583 million and adjusted EBITA of SEK -98 million over the last 12 months.

• Pro forma, group net sales would be SEK 33,567 million with an adjusted EBITA margin of 9.4%, up 0.7 percentage points.

• The process began in late February/early March, with substantial interest and multiple options evaluated.

Financial impact and impairment details

• SEK 920 million in non-cash impairments and write-downs will be booked in Q2, including SEK 600 million goodwill impairment and SEK 320 million in tangible/intangible asset write-downs.

• An additional SEK 30 million capital loss will be recorded, all adjusted as items affecting comparability.

• The divested units had negative EBITDA of SEK 10 million over the last 12 months and negative operating cash flow.

• Group's interest-bearing net debt/RTM adjusted EBITDA is expected to improve marginally.

• Storskogen remains focused on organic EBITA growth, profitability, and cash flow improvement.

Transaction structure and future proceeds

• Initial proceeds of SEK 10 million received; internal loans to subsidiaries converted to the new company, totaling SEK 240 million.

• Storskogen will hold a preference share in the new company, entitling it to future profits and sales proceeds.

• No dividends from the new company until loans are repaid; future proceeds will be received as dividends or other payments after the loan is repaid.

• The new owner, M Industrial Invest, is committed to investing working capital and managing the portfolio.

• Transaction subject to regulatory approval and bondholder waivers, expected by August 2024.