Bulten Ab · OMXSTO:BULTEN
Bulten Ab — Investor Day (February 2022)
58 slides from Bulten Ab's investor day presentation, Feb 22, 2022
Slide 1: Bulten's Capital Markets Day
BULTEN’S CAPITAL MARKETS DAY February 22, 2022
Slide 2: Agenda
Sustainable Growth Anders Nyström, CEO and President A Strong Sustainable Offer Markus Baum, Chief Commercial Officer Agenda Tomorrow’s Products Emmy Pavlovic, SVP Technology and Innovation A World-Class Production Fredrik Bäckström, Chief Operating Officer A Stronger Supply Chain Claes Lindroth, SV
Slide 3: Sustainable Growth
SUSTAINABLE GROWTH Anders Nyström CEO and President
Slide 4: Vision
Vision We create and supply the most innovative and sustainable fastening solutions BULTEN • CAPITAL MARKETS DAY 2022 4
Slide 5: Bulten in brief
Bulten in brief Net sales 2021 3,730 MSEK Operating earnings 2021 Sweden ●●● 232 MSEK Russia ●●● China ●●● Operating margin 2021 Taiwan ●● 6.2 % UK ●● Germany ●●● Growth 2021 Poland ●●● 16.7% USA ●● Employees (FTE)* ● Production ● Sales 1,673 ● Development *Number of FTEs by January 31, 2022 BULTEN
Slide 6: Strong development through the pandemic
Strong development through the pandemic Annual growth Bulten vs. global light and Target beating quarters in heavy commercial vehicle market, % normalized market 16,7 9,7 1 3,3 1,6 SALES SALES 1,080 MSEK 1,103 MSEK -1,2 -5,5 EBIT 8.5% EBIT 8.9% -14,7 2018 2019 2020 2021 Q4, 2020 Q1, 2021 BULTEN GLOB
Slide 7: A record in new major contract wins
A record in new major contracts wins July 650 MSEK* FSP for current European automotive 2020 customer 2021 July 50 MSEK* Major contract with consumer 2021 electronics customer contract wins August 68 MSEK* Extended FSP for current European 2021 automotive customer 775 MSEK per year at full pace Sept
Slide 8: Existing financial targets remain
Existing financial targets remain 2024 2020 Net sales Net sales 5.0 BSEK 3.2 BSEK BULTEN • CAPITAL MARKETS DAY 2022 8
Slide 9: Diversified customer portfolio
Diversified customer portfolio Customer sector shares 100% 80% 60% Non-automotive industries Automotive suppliers 40% Heavy commercial vehicle OEMs Light vehicle OEMs 20% 0% 2019 2020 2021 2025 BULTEN • CAPITAL MARKETS DAY 2022 9
Slide 10: Stronger regional presence
Stronger regional presence Accelerate Keep Accelerate growth in momentum growth North in Europe in Asia- America Pacific Scale in North America and Asia-Pacific Acquisition in North America necessary to reach economy of scale BULTEN • CAPITAL MARKETS DAY 2022 10
Slide 11: Sustainability
Focusing on both functionality and sustainability to innovate new products Recycled Cleaner Lighter Sustainability Stronger Smarter Functionality BULTEN • CAPITAL MARKETS DAY 2022 11
Slide 12: Sustainability is key in everything we do
Sustainability is key in everything we do Sustainability is not an add-on. To be a sustainability leader is core to our vision. 2019 (base year) Scope 1 & 2 2030 Corporate governance and business ethics (Greenhouse gas emissions- absolute target) Scope 3 (Greenhouse gas emissions- -30% intensity tar
Slide 13: Strategy
Strategy STRONG POSITION STRONG OFFER Including sustainability and FSP concept, geographic proximity, forefront of innovation and sustainability innovation leadership GROWTH SALES 5 BSEK Organic and acquisition growth, inside and outside automotive CAGR 10% MARGIN EXPANSION EBIT MARGIN Economy of sc
Slide 14: A Strong Sustainable Offer
A STRONG SUSTAINABLE OFFER Markus Baum Chief Commercial Officer
Slide 15: A changing landscape – global trends
A changing landscape – global trends Digitalization Sustainability Urbanization Connectivity Understanding of sustainability Growing megacities and urban as a key driver for companies areas with larger number of Artificial Intelligence and organizations inhabitants Stricter regulations to New ways o
Slide 16: A changing landscape – automotive trends
A changing landscape – automotive trends Alternative powertrain technologies Electri- fication New technologies and investments will accelerate the development in the automotive industry tremendously over CO₂ the next 20 years. neutral mobility To stay ahead of the game, we focus on: Biofuels Hydrog
Slide 17: A changing landscape – automotive trends
A changing landscape – automotive trends Platform consolidation • Various skateboard platforms in development • OEMs to increasingly share platforms and architectures • Suppliers (old and new) will play an important role in developing future platforms Extend customer base to new players in the autom
Slide 18: A changing landscape – automotive trends
A changing landscape – automotive trends EINRIDE • TESLA • RIMAC • AMAZON • APPLE CAR • RIVIAN • CATL • • The number of players – OEMs and suppliers – in the automotive industry is increasing TOGG • ARRIVAL • NORTHVOLT • rapidly MAGNA • FISKER • VOLTA • POLESTAR • WAYMO • SONO MOTORS • Car sharing,
Slide 19: If we want to outperform the market, which customer strategy do we adopt?
If we want to outperform the market, which customer strategy do we adopt? BULTEN • CAPITAL MARKETS DAY 2022 19
Slide 20: How can we adapt to the changing landscape?
How can we adapt to the changing landscape? PRODUCTS OPERATIONS CUSTOMERS WAY OF WORKING AND SERVICES AND REGIONS BULTEN • CAPITAL MARKETS DAY 2022 20
Slide 21: Targeted customer approach
Targeted customer approach AUTOMOTIVE AUTOMOTIVE SUPPLIERS NEW CUSTOMER GROUPS NORTH AMERICA Existing and Engage with the growing E.g. consumer electronics, AND ASIA-PACIFIC new OEMs – number of new players agricultural and recreational Increase market share passenger/ OEM (30% of value) vehicles, w
Slide 22: Balancing customer base and market sectors
Balancing customer base and market sectors > 10% CAGR Other industries – consumer electronics, agricultural/recreational 5% vehicles, wind power… 20% Maximize growth through the automotive value chain – new customers + Accelerate growth in other sectors 2020 Automotive – passenger/ 2025 heavy commer
Slide 23: Focus areas for products and services
Focus areas for products and services • Broaden our product portfolio with new sustainable products and service offers • Leverage our unique BUFOe offer • Strengthen technical sales and increase number of development projects • Further penetrate the EV ecosystem with tailored products and service va
Slide 24: FSP – one stop partner for all fastener management
FSP – one stop partner for all fastener management Value added elements addressing every step of a fastener’s life: ⁻ Customer resource efficiency ⁻ Supply base de-complexing ENGINEERING MANUFACTURING SOURCING LOGISTICS • Optimization of • Access to Bulten’s • Proven certified • Seamless delivery sy
Slide 25: FSPs – we add superior sustainability to FSP
FSPs – we add superior sustainability to FSP • Addresses each element of the value chain from a sustainability point of view • Committed and agreed sustainability objectives for customer specific programs • Alignment on sustainability actions together with the customer • Examples: FSP Reduction of
Slide 26: Regional balance
Regional balance 2020 2021 2025 EUROPE ASIA-PACIFIC NORTH AMERICA • Keep momentum in Europe and Asia-Pacific • Enhance sales activities in Central Europe, especially in Germany • Break ground in North America and target new customers through M&A BULTEN • CAPITAL MARKETS DAY 2022 26
Slide 27: Way of working
Way of working Leverage the integrated Motivate application Agile sales and global sales team to promote engineering to explore sales focus on customer value Bulten & PSM International opportunities proposition product capabilities BULTEN • CAPITAL MARKETS DAY 2022 27
Slide 28: Continue to outgrow the market
Continue to outgrow the market 2024 2020 Continue to outgrow the market Net sales Targeting > 10% Net sales Net sales 5.0 BSEK CAGR 3.23.2 BSEK Net sales 3.2 BSEKBSEK BULTEN • CAPITAL MARKETS DAY 2022 28
Slide 29: Summary
Summary • The automotive industry is currently undergoing an enormous transformation • Bulten is well positioned and will outperform the general market growth, also in challenging market conditions • Our customer portfolio will be more balanced and new markets and customer groups will be established
Slide 30: Tomorrow's Products
TOMORROW’S PRODUCTS Emmy Pavlovic SVP Technology and Innovation 30
Slide 31: A sustainable and functional product offer
A sustainable and functional product offer - delivered faster than before Sustainability -30% -25% per ton of sold products Targeted growth Functionality BULTEN • CAPITAL MARKETS DAY 2022 31
Slide 32: Summary
Summary • Bulten has increased the innovation capacity • New products are developed with focus on sustainability and functionality • The BUFOe concept is a product family – we are redefining fasteners • Speed is a key differentiator BULTEN • CAPITAL MARKETS DAY 2022 32
Slide 33: A World-Class Production
A WORLD-CLASS PRODUCTION Fredrik Bäckström Chief Operating Officer
Slide 34: Maximize the utilization of current asset footprint
Maximize the utilization of current asset footprint – smart CAPEX usage Lean and well positioned logistics and manufacturing facilities In-house vs. outsourced production - sales value Sweden ●●●●●● Russia ●●●● China ●●●● ● In-house 60% Taiwan ●●●● ● Outsourced 40% UK ●●●● Germany ●●● Poland ●●● USA
Slide 35: Value chain improvements in 2020-2021
Value chain improvements in 2020-2021 • New value chain management process has improved cost and capital efficiency • Insourcing of previously purchased products to an approx. value of 300 MSEK • Sustainability measures for all plants implemented, including renewable electricity contracts for all ma
Slide 36: Plant relocations and expansions 2020-2021
Plant relocations and expansions 2020-2021 Relocation to a new plant in 30% expansion in Wuxi, China Consolidation of Bulten/PSM Taipei, Taiwan International business in North America - new plant in Streetsboro, Ohio • Increased capacity and • Enabling expanding business • Enabling increased product
Slide 37: New surface treatment plant in Poland
New surface treatment plant in Poland The new plant include: • All major types of coatings supplied to customers, both electrolytic and flake • All finishing operations after surface treatment, e.g. patching and plastic over-molding, as well as packaging • A warehouse including high degree of automa
Slide 38: New surface treatment plant in Poland
New surface treatment plant in Poland The new plant will lead to: • Improved margins due to insourcing and state-of-the-art processes • Shorter lead times and lower inventory • Lower CO₂ emissions due to shorter transportation routes and 100% renewable energy • Secured capacity in a very constrained
Slide 39: Our sustainability journey
Our sustainability journey • Renewable electricity in all EU and US plants • New state of the art solvent-free cleaning process in Taipei, Taiwan, has eliminated solvent emissions • New German warehouse equipped with solar panels • New Polish plant planned for solar panels and additional space for s
Slide 40: Manufacturing focus areas ahead
Manufacturing focus areas ahead Digitalization and automation New products Integration of Bulten and PSM International Manufacturing footprint BULTEN • CAPITAL MARKETS DAY 2022 40
Slide 41: A Stronger Supply Chain
A STRONGER SUPPLY CHAIN Claes Lindroth SVP Purchasing and Quality
Slide 42: The last years were a challenge with a magnitude hardly ever experienced
The last years were a challenge with a magnitude hardly ever experienced in industry history • Trade barriers due to Brexit and political/financial protectionism • A global pandemic • Sea freight turmoil (container shortage and blocked Suez channel) • Raw material shortage • Semiconductor shortage •
Slide 43: It isn't over yet, but we have managed to manoeuvre through the storm
It isn’t over yet, but we have managed to manoeuvre through the storm We have: • Been able to continue delivering products to our customers • Managed to secure supply of material and components • Kept our production running by being proactive and due to strong relationships with our key suppliers We
Slide 44: De-risking our supply chain by focusing on regional sourcing
De-risking our supply chain by focusing on regional sourcing Benefits with remote Risks with remote sourcing sourcing • Competitive cost structure • Low flexibility • Specialized skilled suppliers • Long lead time • Solid supplier relations • Building inventory • Increases obsolescence risks • Curre
Slide 45: Make where we sell strategy
Make where we sell strategy Relatively low exposure to overseas trading risks like: • Long lead time • Ocean freight cost and blockages • Currency fluctuations • Trade barriers • Geopolitical and military conflicts • Excess stock build-up BULTEN • CAPITAL MARKETS DAY 2022 45
Slide 46: Reducing an already low risk exposure
Reducing an already low risk exposure Actions to further reduce risks with remote sourcing: • Insource to utilize existing production capacity • Invest in new equipment to expand our in-house production portfolio • Expand business with regional suppliers • Enter new regional strategic supplier partn
Slide 47: Targets and actions to reduce scope 3 CO₂ emissions
Targets and actions to reduce scope 3 CO₂ emissions 2019 (base year) Scope 1 & 2 2030 (Greenhouse gas emissions- absolute target) Scope 3* (Greenhouse gas -30% • Technical collaborations with wire rod suppliers to increase emissions- intensity target) use of scrap based material in our production -2
Slide 48: Summary
Summary • We have managed serving our customers with high quality products right on time even in challenging times. This we will continue to do! • Regional supply is key to de-risking the supply chain going forward. Our global footprint enable us to successfully balance regional vs. global supply •
Slide 49: Strong Financial Platform
STRONG FINANCIAL PLATFORM Anna Åkerblad CFO
Slide 50: Strong Financial platform
Strong Financial platform We have a strong financial platform and a position to support further growth Financial development since last CMD: - Strong performance in Q4, 2020 and Q1, 2021 - Applied strict cost and cash flow control Strong financial platform: - Financial leverage continued distributio
Slide 51: Become a 5 BSEK company in 2024
Become a 5 BSEK company in 2024 2024 2021 2020 Net sales Organic 5.0 BSEK Net sales Acquisitions Net sales growth 3.7 BSEK 3.2 BSEK Become a truly global company Sustainable growth BULTEN • CAPITAL MARKETS DAY 2022 51
Slide 52: Margin expansion to > 8 %
Margin expansion to > 8 % Margin expansion 2024 2021 2020 Production and Acquisition EBIT margin distribution efficiency synergies EBIT margin Economy of scale Strengthened > 8.0 % EBIT margin position in Asia-Pacific 6.2 % Technology and North America 3.6 % Financial leverage Sustainable business B
Slide 53: Return on capital employed > 15 %
Return on capital employed > 15 % Strong financial platform 2024 2021 2020 Financial Increased margin ROCE ROCE leverage continued distribution of expansion and net working capital focus > 15.0 % ROCE 9.7 % dividends 5.4 % Financial leverage Sustainable business BULTEN • CAPITAL MARKETS DAY 2022 53
Slide 54: Dividend with historical yield
Dividend with historical yield POLICY OUTCOME Bulten’s dividend policy over time is to pay >33% 33% out a dividend of at least one third of net earnings after tax. Consideration is given, however, to the company’s financial 76% position, cash flow and outlook. 55% 47% 33% POLICY The Board has propos
Slide 55: Financing
Financing Additional financing secured in December 2021 ⁻ Existing credit facility with Svenska Handelsbanken was increased with 550 MSEK ⁻ The total credit facility amounts 1,300 MSEK ⁻ This enables further growth and expansion BULTEN • CAPITAL MARKETS DAY 2022 55
Slide 56: Summary
Summary 56
Slide 57: Strategy
Strategy STRONG POSITION STRONG OFFER Including sustainability and FSP concept, geographic proximity, forefront of innovation and sustainability innovation leadership GROWTH SALES 5 BSEK Organic and acquisition growth, inside and outside automotive CAGR 10% MARGIN EXPANSION EBIT MARGIN Economy of sc
Slide 58: A stronger solution
A stronger solution BULTEN • CAPITAL MARKETS DAY 2022 58