Business update - First Mover Group - Eirik Arnø, CEO Øystein Leivestad, CFO
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Business update – First Mover Group Eirik Arnø, CEO Øystein Leivestad, CFO March 2021
About FMG
2020 performance
Going forward
2Market position
#1 Norway
#1 Denmark
#3 Sweden
N/A Germany
FMG service offerings – full value chain
Tenant advisory Business Logistics &
AT A GLANCE
services relocation Assembly
Founded in 2006
Headquartered in Oslo, Norway Revenues per business area1 Revenues per country1
Tenant advisory Germany
~400 own FTEs and ~200 hired in Denmark 0%
across the Nordics and Germany 10% 14%
Logistics and 30%
Market leader in Norway with assembly
+60% market share Sweden 15%
450 mNOK 450 mNOK
>1.200 active customers
70%
60%
+5y average relationship with Business relocation Norway
top 30 clients
1 2020 proforma figures 3450
373
+41% 280
LONG TERM 40%
CAGR (2010-20)
200
profitable Proforma Revenue
157
EBITDA %
GROWTH 78
107 113
9%
12% 12%
8%
track record
7%
6% 6%
34 39
18 15 15
0 5
06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Completed
M&A transactions
2015 2016 2017 2018 2019 2020FMG’s overall ambition and strategic priorities
3-year strategic targets Strategic priorities
Dominating market position in the Nordics, Financial performance
through a mix of organic and M&A growth (EBITDA, growth, utilization)
>10% organic growth p.a.
1 3
12-15% operational EBITDA margin Full value chain Leverage asset and
offerings network values
Growth in 1-2 new markets
2 4
Premium services Specialist skills and
Leading ESG player in the industry with and execution value based culture
long-term sustainable operations
5About FMG
2020 performance
Going forward
6FMG 2020 FMG 2021
“Steady State” “Steady State”
ambition ambition
ACHIEVEMENTS IN 2020
Revenue potential 450 550
• 3 M&A transactions completed –
strengthening the value chain
STRONG Payroll
55% • 1 new start-up – gaining traction 53%
STRATEGIC (% of revenues)
• Restructuring in Norway
PROGRESS Other costs
35% • Roll-out of new IT system 33%
(% of revenues)
IN 2020 • Outsourcing of accounting
EBITDA margin 10-12% • Re-branding of the group 11-15%
• ISO 9001 and ISO 14001 certified
7Attractive growth opportunities pursued with risk mitigating structures
3 M&A transactions completed in 2020
▪ M&A funding strategy targeting 50/50 cash and shares
• Ensuring a healthy capital structure of the Group Revenue
Country Company Segment Strategic motivation
• Aligning interests of sellers (key personnel) and buyers ’19
Move4U Bus. Relocation 37mNOK Market position in
▪ Earn-out structures and/or convertible debt implemented in all deals and Assembly Malmø
• Future payments subject to growth in revenues and/or EBITDA
• Each threshold of future payments are accretive on credit metrics Resultat Tennant advisory 13mNOK Strengthen value chain
Prosjektleding in Sweden
• Important to bridge expectations and mitigate transaction risk
Adam Tennant advisory 65mNOK Market position in
▪ 30mNOK in cash drawn from escrow in 2020 Transport / Relocation Denmark
• Expected to increase EBITDA by 9.0mNOK (in normal times)
• Yielding a 3.4x Cash/EBITDA multiple
In addition, a low-cost start-up in Germany was initiated
• Ex. Relokator employee with local knowledge and experience available
• Low fixed costs – leveraging local partners for project execution
• Gaining momentum – first projects completed at attractive margins
1 Move 4 U had a SEKM 4,0 convertible debt that either would be converted to payments to sellers, or as cash back in company, subject financial conditions of the company 2020YE 8Multiple factors temporarily impacting our
business – limited governmental support…
✓ Day-to-day service activity down ~70% as customers work from home
• Representing 20-25% of revenues
COVID-19
✓ Delayed construction projects postponing major relocations
impacting FMG
• Munch museet, NMBU, Nasjonalmuseet, Pressens Hus, etc.
results
✓ New infection control routines reduce operational flexibility
• Reducing operating margin by 1-2%
✓ Increased costs for precautionary measures (approx. 0.5mNOK)
✓ Sick-leave among operational resources up 10%
9Revenue EBITDA
(mNOK) Revenue (left axis) LTM EBITDA (left axis) EBITDA (for leverage ratio) (mNOK)
120 20
100 15
13 14 15
80 11
60 8 7 46 45 10
37 36 42 41
40 24
3 5
20
0 0
2020: a year of -20
-40 -6
-5
adaptability -60
Q1
19
Q2
19
Q3
19
Q4
19
Q1
20
Q2
20
Q3
20
Q4
20
-10
and change H1 2020 Q3 2020 Q4 2020 Q1 2021
• High-season hampered by • Covid-19 continues to
management • Strong January and
February
• Full shut-down in March with
• Seasonally weak quarter
• Lower than normal frame
agreement activity
new lockdowns (particularly
in Oslo)
impact FMG performance
• Breach of leverage ratio
• 25-30% reduction in likely – the company will
temp. layoffs and cost cuts
• Increased sick leave across revenues company-by- approach bondholders in
• Rebound in June yielding a the org. (particularly in company due course
record strong EBITDA Sweden) • EBITDA hit by one-off
• Restructuring program • No government support elements
initiated packages received ‒ Severance packages
‒ Stay-on bonuses
‒ Year-end provisions
‒ KPI salary adjustments
10About FMG
2020 performance
Going forward
11Identified cost savings in H1 2021 of
approx. 8.5mNOK
✓ 20-25% pay cut in mgmt. team and
Several BoD renumeration
initiatives 4.5
✓ Temporary layoff of admin staff and
delay hiring of replacements (~20FTEs)
implemented to
5.5
preserve cash ✓ Reduction in use of external advisors
3.0
✓ Reduction in other operating expenses
Q1 impact Q2 impact and investments (e.g., office, travel, IT)
One off liquidity improvements
EBITDA effect
12Cash-break even level at quarterly
revenues of 103-107mNOK
Quarterly figures (mNOK)
Limited cash 110
108 ▪ After cost reductions, our new
burn expected 103-107 cash break-even level is
obtained at a revenue level of
105 104 103-107mNOK per quarter
going forward
▪ In line with proforma revenues
100 achieved in the last two quarters
Quarterly cost break-down per category and country ▪ Cash position at year-end1 of
60mNOK plus 10mNOK in RCF
Hired crew Sweden 0
20%
Proforma revenues Revenues Q4 20 Cash break-even
10% Office
6% Q3 20 revenue level
Denmark
12%
10% Vehicles
104mNOK 104mNOK 1% Germany
59%
10%
Other
5% 68%
Interests and CAPEX Norway
Payroll
1 Adjusted for known extraordinary cash outlays in Q1 (e.g. postponed VAT in Denmark, severance packages, and earn-outs) 132021 performance depending on how fast we revert to normal
Our view: a steady return to normal by Q4 2021 Implications for Group target numbers
Activity
level
100% Scenarios Revenue EBITDA EBITDA %
“Back to normal” case (2022) 550 66 12%
90% (4 quarters of “normal operations”)
80% “Normal operations”
“Back after summer” case 470 33 7%
(as illustrated)
70% Moderate lockdown
Hard lockdown (80-90% of “normal”)
Covenant case (5,5x)1 430 21 5%
(70% of “normal”)
(2Q of “red” and 2Q of “yellow”)
Q4 Q1 Q2 Q3 Q4 Q1
2020 2021 2021 2021 2021 2022
1 Covenant case assumes debt of NOK 200m and NOK 45m in cash 14More than 100 frame agreements (examples only) – 20 new won in 2020 + 5-10 signed in 2021
Public companies Property intensive players Assembly Real estate & FM companies
Robust and
growing
customer base Several large projects won with delivery in 2021
15Expecting a continued attractive market,
but timing of rebound is uncertain
✓ Indications of a pent-up market demand
Underlying
market drivers ✓ Post-pandemic changes to office space requirements
and demand ✓ Increased interest in new workplace concepts
remain intact
✓ Continued strong new build activity
✓ FMG’s competitive position in the Nordics strengthened
162020 2021E
Mainland GPD growth -2.5% 3.7%
(Norway)
Unemployment rate 4.8% 4.5%
(Norway)
Market rebound
supported by key m2 absorbed
(1.000)
Office space absorption (left axis)
Change in employment (right axis)
Δ in employment
(1.000)
400 40
economic drivers 300 Dot-com crises Financial crises Corona crises
30
Correlation between 200
20
employment rate and 10
100
office space absorption1 0
0
-10
-100 -20
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
1 Example from greater Oslo area
Source: SSB; Eiendomsspar OsloStudiet 2021 17Combination of shorter contract duration
and future workplace solutions will drive
demand for our services
Average lease # of years
5.5
contract
duration tend 5.0
to drop in times 4.5
of uncertainty 4.0
3.5
08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Source: Arealstatistikk 181.
1 2020 reductions in revenue and increase in costs are directly
linked to COVID-19 and not a permanent market change
2.
2 The market will return to previous levels when lockdown
restrictions are eased
In summary: 3
3. The vaccination program will progress, and our markets will
reopen / return towards normality after summer 2021
What we
4
4. FMG will be able to pay interests through 2021 and be compliant
believe in with leverage covenant by end-2021
5.
5 FMG back to normal operations in 2022 (year of refinancing)
targeting revenue ~550mNOK with >10% EBITDA margin
19professional
together
ahead
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