Slide 1: Second Quarter 2018 Earnings Conference
Second Quarter 2018 Earnings Conference 19 July, 2018
Slide 2: Today’s presenters
Today’s presenters JOHAN OSKAR MENCKEL HELLSTRÖM CEO CFO Since: 2012 Since: 2011 Gränges since: 2004 2
Slide 3: Gränges today
Gränges today ○ 1,600 employees ○ Listed on Nasdaq Stockholm ○ Net sales of SEK11 billion ○ Production capacity of 420,000 20% Global market share in rolled products for brazed aluminium metric tonnes heat exchangers ○ Adjusted operating profit of SEK 933 million 3
Slide 4: Second quarter 2018 – increased profits, focus on growth and capacity expansion
Second quarter 2018 – increased profits, focus on growth and capacity expansion ○ Sales volume increased by 0.5% to 99.1 ktonnes ○ Adjusted operating profit increased by 3.9% to SEK 301 million – including costs for US anti-dumping duties (AD/CVD) of SEK 27 million ○ Profit for the period rose to SE
Slide 5: Market growth of 2% expected for full year 2018
Market growth of 2% expected for full year 2018 Light vehicle production growth (YoY) Region Q2 2018 Q3 2018 outlook FY 2018 outlook Asia +6% +2% +2% Europe +5% +2% +2% Americas ±0% +9% +3% Global +4% +4% +2% Source: IHS Automotive, 15 June 2018 5
Slide 6: Stable volume development in the second quarter
Stable volume development in the second quarter Gränges sales volume (ktonnes) Asia Europe Americas +1% +1% +/-0% 23,0 58,5 56,8 54,8 58,8 22,3 20,7 22,5 50,6 20,6 17,9 17,2 17,8 15,5 15,4 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 2017 2018 2017 2018 2017 2018 ○ Growth driven by sales to ○ Growth
Slide 7: Decision to restart production in Newport, Arkansas focused on light gauge aluminium foil
Decision to restart production in Newport, Arkansas focused on light gauge aluminium foil Huntingdon, TN Salisbury, NC Newport, AR Franklin, TN ○ Investment of USD 26 million in upgrading mills and equipment ○ 20 ktonnes capacity available in second half of 2019 ○ Expected to contribute positively t
Slide 8: The positive earnings trend continued in the second quarter
The positive earnings trend continued in the second quarter Rolling 12 months sales volume and adjusted operating profit 450 1100 977 989 925 933 Adjusted operating profit (SEK million) 400 879 900 769 Sales volume (ktonnes) 350 687 632 700 300 521 528 541 541 563 494 437 444 463 500 401 250 374 348
Slide 9: Continued good development during second quarter
Continued good development during second quarter Financial overview SEK million Q2 January – June 2018 2017 Change 2018 2017 Change Sales volume (ktonnes) 99.1 98.7 0.5% 194.2 193.5 0.4% Net sales 3,443 3,081 11.7% 6,514 5,973 9.1% Adjusted operating profit1 301 290 3.9% 583 527 10.6% Adjusted opera
Slide 10: Net debt was SEK 2.6 billion at the end of second quarter
Net debt was SEK 2.6 billion at the end of second quarter Change in net debt -1 800 1.8 Cash flow before financing SEK 125 million 2.0 -2 000 -82 -17 -2 200 SEK million -166 -2 400 -2 353 390 -227 -2 600 -166 -2 621 -2 800 Net debt Adjusted Change in Other Investments FY 2017 FX & Net debt 31 Mar EB
Slide 11: US trade tariffs and sanctions
US trade tariffs and sanctions Antidumping duties Section 232 tariffs Sanctions against Rusal ○ Antidumping and ○ Additional tariffs of 10% ○ Sanctions prohibiting US countervailing duties on all aluminium imports persons and limiting non- (AD/CVD) on foil and into the US in effect as of US persons
Slide 12: Outlook
Outlook ○ Global Light Vehicle Production is expected to increase 4% during third quarter – for the full year 2018 a growth of 2% is projected1 ○ Gränges expects a stable sales volume of Automotive heat exchanger materials in all regions in the third quarter ○ HVAC & Other in the US is estimated to
Slide 13: Summary of second quarter 2018
Summary of second quarter 2018 ○ Sales volume increased by 0.5% to 99.1 ktonnes ○ Adjusted operating profit increased to SEK 301 million ○ Profit for the period rose to SEK 214 million ○ Cash flow before financing was SEK 125 million ○ Net debt of 2.0 x adjusted EBITDA 13
Slide 14: Q&A
Q&A Johan Menckel, CEO Oskar Hellström, CFO
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