Slide 1: Fourth Quarter 2020 Earnings Conference
Fourth Quarter 2020 Earnings Conference 28 January, 2021
Slide 2: Today’s presenters
Today’s presenters JOHAN OSKAR MENCKEL HELLSTRÖM CEO CFO Since: 2012 Since: 2011 Gränges since: 2004 2
Slide 3: Strong fourth quarter concluded a challenging yet productive year
Strong fourth quarter concluded a challenging yet productive year ○ Improved market conditions in all regions ○ Aluminium Konin acquisition completed ○ Increased sales volume and operating profit – Sales volume increased by 33% – Adjusted operating profit SEK 193 million ○ Continued strong cash gene
Slide 4: Continued recovery of both Automotive and HVAC markets in the fourth quarter
Continued recovery of both Automotive and HVAC markets in the fourth quarter End market production growth (YoY) End market Automotive HVAC Region Global Asia Europe Americas Americas Q4 2020 +2% +4% +1% ±0% +61% Q1 2021 +15% +27% +2% +8% - Full year +14% +9% +14% +26% - 2021 Source: Automotive light
Slide 5: Sales volume increased by 33% in total and by 14% excluding acquisitions
Sales volume increased by 33% in total and by 14% excluding acquisitions in the fourth quarter Gränges sales volume (ktonnes) Asia Europe Americas Gränges Group +2% +123% +23% +33% 59.6 56.7 103.3 25.7 46.0 47.1 0.9 86.7 20.4 20.9 14.6 77.9 70.8 15.1 16.8 13.6 51.8 48.3 51.8 48.3 11.5 39.1 39.1 8.6
Slide 6: The acquisition of Aluminium Konin has been successfully completed
The acquisition of Aluminium Konin has been successfully completed ○ Strategic rationales for the acquisition – New capabilities 1 – New niche markets 2 – Stronger presence in Europe 3 ○ Integration activities progress Aluminium Konin according to plan Konin, Poland ○ Rights issue successfully compl
Slide 7: 2020 has been a challenging yet productive year
2020 has been a challenging yet productive year o COVID-19 o Record year in Americas o Aluminium Konin o Powder Metallurgy o Rights issue o Sustainability 7
Slide 8: In 2020 the sustainability performance continued to improve in several prioritized areas
In 2020 the sustainability performance continued to improve in several prioritized areas Climate Recycled Sustainable Diverse impact aluminium products workspace Metric: Total Metric: Share of Metric: Share of products Metric: Share of carbon emissions sourced recycled with verified sustainability w
Slide 9: In 2020 the financial performance reflects challenging market conditions and material investments
In 2020 the financial performance reflects challenging market conditions and material investments Net debt over Growth ROCE adjusted EBITDA Dividend SEK +4% 1 8.1% 2.2 1.102 32% Target: Target: Target: Target: 30–50% above market 15–20% 1.0–2.0 times of net profit (1) Gränges sales volume growth exc
Slide 10: Updated strategy for 2025
Updated strategy for 2025 PURPOSE Driving the development of lighter, smarter and more sustainable aluminium solutions >> PEOPLE GROWTH AREAS MAKE THE DIFFERENCE o Thermal management o Electrified transportation >> o New rolled product niches PURPOSE GROWTH o New materials technology AND STRATEGY PR
Slide 11: Sales volume recovery continued in fourth quarter
Sales volume recovery continued in fourth quarter Sales volume and adjusted operating profit 500 1,250 Adjusted operating profit (SEK million) 1,005 400 933 1,000 866 Sales volume (ktonnes) 300 687 750 648 541 463 200 500 362 371 193 209 210 203 100 42 250 149 152 159 160 164 239 373 375 347 90 71 8
Slide 12: Stable year over year margin in fourth quarter
Stable year over year margin in fourth quarter Sales volume and adjusted operating profit per tonne 100 4.0 Adjusted operating profit per tonne (kSEK) 2.1 80 1.9 2.0 Sales volume (ktonnes) 1.8 60 1.1 0.0 40 -2.0 20 45.0 45.9 46.2 46.6 40.6 45.2 38.8 39.1 38.2 51.7 27.3 43.4 34.9 51.8 40.4 48.3 14.6
Slide 13: Financial overview – fourth quarter 2020
Financial overview – fourth quarter 2020 SEK million Q4 January - December 2020 2019 Change 2020 2019 Change Sales volume (ktonnes) 103.3 77.9 32.6% 350.6 347.3 0.9% Net sales 3,149 2,682 17.4% 11,008 11,978 -8.1% Adjusted operating profit1 193 144 34.0% 648 866 -25.1% Adjusted operating margin (%)
Slide 14: Increased net debt from acquisition of Aluminium Konin partly offset by rights issue
Increased net debt from acquisition of Aluminium Konin partly offset by proceeds from rights issue Change in net debt 0 2.5 Adjusted cash flow before financing 2.2 SEK 232 million -1,000 SEK million -2,000 12 -19 -102 1,662 -3,000 -2,812 342 -2,367 -8 -3,292 -4,000 Net debt Adjusted Change in Other
Slide 15: Continued strong cash generation in 2020
Continued strong cash generation in 2020 Adjusted operating profit to cash flow before financing conversion1 1500 200% 182% Adjusted operating profit and cash flow before financing (SEK million) 150% Cash conversion (%) 129% 1000 121% 112% 121% 111% 100% 81% 100% 70% 500 50% 0 0% 2012 2013 2014 2015
Slide 16: Outlook - first quarter 2021
Outlook - first quarter 2021 ○ Continued market recovery anticipated ○ Gränges currently expects an organic1 year over year sales volume increase by low double digits – Low double digit increase for Automotive materials on global level – Mid single digit increase for HVAC & Other materials in Americ
Slide 17: Summary - fourth quarter 2020
Summary - fourth quarter 2020 ○ Improved market conditions in all regions ○ Aluminium Konin acquisition completed ○ Increased sales volume and operating profit ○ Continued strong cash generation ○ Resumed dividend ○ Updated strategy for 2025 17
Slide 18: Q&A
Q&A Johan Menckel, CEO Oskar Hellström, CFO
Slide 19: Slide 19