Trelleborg Ab Class B · OMXSTO:TREL_B

Trelleborg Ab Class B — Q4 2018 Earnings Presentation

30 slides from Trelleborg Ab Class B's earnings presentation, January 2019

  1. Slide 1: October - December 2018

    October - December 2018 Peter Nilsson, President & CEO Ulf Berghult, CFO 1

  2. Slide 2: Highlights, Business areas, Financials

    Highlights Business areas Financials Summary & Q1 2019 outlook Q&A 2

  3. Slide 3: Record earnings despite challenges

    Record earnings despite challenges Q4 2018 financial summary  Sales at SEK 8 342 M, an increase of 8 percent  Organic sales up 2 percent. Excluding project deliveries, the organic sales increase was 3 percent  EBIT at SEK 977 M, an increase of 5 percent, corresponding to a 1 margin of 11.7 percen

  4. Slide 4: Organic sales development by geography

    Organic sales development by geography Total Group 1 Organic sales excl. project-related business Oct-Dec 18 Oct-Dec 17 3% 9% Western Europe Share Oct-Dec 18 Oct-Dec 17 48% 2% 9% North America Share Oct-Dec 18 Oct-Dec 17 Other Europe 22% 9% 11% Share Oct-Dec 18 Oct-Dec 17 10% -7% 8% Asia & Other mar

  5. Slide 5: Highlights, Business areas, Financials

    Highlights Business areas Financials Summary & Q1 2019 outlook Q&A 5

  6. Slide 6: Trelleborg Coated Systems: Back to organic growth, improved margins

    Back to organic growth, improved margins 1 Trelleborg Coated Systems  Organic sales: +2% SEK M Q4 2018 Q4 2017 Change, %  Structural growth: +10% Net sales 959 812 18 Organic, % 2 -5  Coated fabrics; aerospace, general Structural, % 10 0 industry increased, automotive segment weaker Exchange rate

  7. Slide 7: Trelleborg Industrial Solutions: Good organic growth but weaker margin

    Good organic growth but weaker margin 1 Trelleborg Industrial Solutions  Organic sales: +7% SEK M Q4 2018 Q4 2017 Change, %  Deliveries to most market segments Net sales 1 890 1 706 11 developed well Organic, % 7 8  Building-related segments slightly Structural, % - - weaker Exchange rate, % 4 -2

  8. Slide 8: Trelleborg Offshore & Construction: Poor quarter, recovery looming

    Poor quarter, but recovery looming in H2 2019 1 Trelleborg Offshore & Construction  Organic sales: -17% SEK M Q4 2018 Q4 2017 Change, %  Weaker sales in both offshore and Net sales 649 741 -12 infrastructure segments Organic, % -17 -10  Underabsorption and project write- Structural, % - - downs i

  9. Slide 9: Trelleborg Sealing Solutions: Yet another favorable quarter

    Yet another favorable quarter 1 Trelleborg Sealing Solutions  Organic sales: +6% SEK M Q4 2018 Q4 2017 Change, %  Organic sales trend was good in all Net sales 2 662 2 349 12 geographical regions Organic, % 6 9  General industry and aerospace sales Structural, % 0 1 developed well in all geograph

  10. Slide 10: Trelleborg Wheel Systems: Mixed development

    Mixed development 1 Trelleborg Wheel Systems  Organic sales: -1% SEK M Q4 2018 Q4 2017 Change, %  Weaker agri sales in Europe and Net sales 2 320 2 198 6 Asia; positive in North America Organic, % -1 17  Industrial and construction tire Structural,% 2 1 sales stable and growing Exchange rate, % 5

  11. Slide 11: Highlights, Business areas, Financials

    Highlights Business areas Financials Summary & Q1 2019 outlook Q&A 11

  12. Slide 12: Solid sales growth continues

    Solid sales growth continues Sales development +8% 8 342 7 708 October - December [%] Organic 2 Structural 2 Currency 4 Total 8 Q4 17 Q4 18 +8% 34 005 31 581 January - December [%] Organic 3 Structural 1 Currency 4 Total 8 12M 17 12M 18 12

  13. Slide 13: 11 quarters of positive sales development

    1 11 quarters of positive sales development Target: 5-8% annual sales growth over a business cycle % 35% 33 30% 25% 22 23 19 20% 15% 10% 7 6 5 4 4 5% 2 3 3 0% -5% -3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 15 16 16 16 16 17 17 17 17 18 18 18 18 Of which organic growth, %: -0 -4 -6 -5 -4 -3 3 3 7 4 2

  14. Slide 14: Highest fourth-quarter sales to date

    Highest fourth-quarter sales to date Sales development, R12M SEK M SEK M 9 000 35 000 8 000 32 500 7 000 30 000 27 500 6 000 25 000 5 000 22 500 4 000 20 000 3 000 17 500 2 000 15 000 1 000 12 500 0 10 000 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 14 15 15 15 15 16 16 16 16 17 17 17 17 18 1

  15. Slide 15: Highest fourth-quarter EBIT to date

    Highest fourth-quarter EBIT to date 1 EBIT development EBIT EBIT-margin +5% -0.3 928 977 12.0 11.7 Oct - Dec Q4 17 Q4 18 Q4 17 Q4 18 +15% +0.8 4 694 13.8 4 091 13.0 Jan - Dec 12M 17 12M 18 12M 17 12M 18 1Excluding items affecting comparability 15

  16. Slide 16: 23 consecutive quarters of improved EBIT

    23 consecutive quarters of improved EBIT 1 EBIT and margin, R12M SEK M % 5 000 16 4 500 14 4 000 12 3 500 3 000 10 2 500 8 2 000 6 1 500 4 1 000 500 2 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 14 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 ROS % EBIT 1Excluding items affecting compa

  17. Slide 17: Total Group profit & loss statement

    Total Group Profit & loss statement SEK M Q4 2 0 18 Q4 2 0 17 C hang e, % 12 M 2 0 18 12 M 2 0 17 C hang e, % EBIT, excl. items affecting comparability 977 928 5 4 694 4 091 15 EBIT margin, % 11,7 12,0 -0.3 p.p. 13,8 13,0 0.8 p.p. Restructuring co sts -98 -781 -176 -1 008 Capital gain divestment o f

  18. Slide 18: Solid underlying EPS improvement

    Solid underlying EPS improvement Earnings per share % +10% 3.0 +120% +120% 2.55 2.5 2.22 2.22 2.31 2.0 1.5 1.01 1.01 1.0 0.5 0.0 Group, Total Continuing operations Continuing operations excl. items affecting comparability¹ Q4 17 Q4 18 ¹No dilution effects arose. 18

  19. Slide 19: Cash flow impacted by higher capex and WC

    Cash flow impacted by higher capex and WC 1 Operating cash flow 1 208 24 45 1 166 -111 Q4 17 EBITDA² Net capex Working capital Q4 18 1Excluding items affecting comparability 19 2Including other non cash flow affecting items

  20. Slide 20: Cash conversion impacted by higher capex

    Cash conversion impacted by higher capex 1 Operating cash flow, R12M SEK M % 4 000 120 3 500 99 96 97 95 100 90 89 90 87 3 000 83 82 78 78 77 76 76 74 71 80 2 500 2 000 60 1 500 40 1 000 20 500 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 14 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18

  21. Slide 21: Stable underlying leverage

    Stable underlying leverage Net debt / EBITDA, R12M 0.0 0.0 -0.1 X 1.8 1.8 1.7 1.7 1.7 1.7 1.7 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Group, Total Continuing operations Continuing operations excl. items affecting comparability Q4 17 Q4 18 21

  22. Slide 22: Leverage and gearing at stable levels

    Leverage and gearing at stable levels 1 Gearing and leverage development, R12M % X 55 53 2.2 2.1 50 48 48 2.0 1.9 1.8 1.8 45 1.8 1.7 1.7 40 40 38 38 1.6 34 35 1.4 1.4 1.4 35 33 1.4 30 1.2 25 1.0 20 0.8 15 0.6 10 0.4 5 0.2 0 0.0 10 11 12 13 14 15 16 17 18 10 11 12 13 14 15 16 17 18 Net debt / Equity

  23. Slide 23: Slight underlying ROE improvement

    Slight underlying ROE improvement Return on equity, R12M % 18 16 14 0.5 0.1 12 11.2 11.7 11.0 11.1 10 8 6 4 2 0 Group, Total Continuing operations excl. items affecting comparability Q4 17 Q4 18 23

  24. Slide 24: Financial guidelines for full-year 2019

    Financial guidelines for full-year 2019  Capex: SEK ~1,8-2 Bn  Restructuring costs: SEK ~250 M  Underlying tax rate: ~26%  Amortization of intangible assets1: SEK ~300 M 1 Major part explained by purchase price allocation (PPA) 24

  25. Slide 25: Highlights, Business areas, Financials

    Highlights Business areas Financials Summary & Q1 2019 outlook Q&A 25

  26. Slide 26: Record earnings despite challenges

    Record earnings despite challenges Q4 2018 financial summary  Sales at SEK 8 342 M, an increase of 8 percent  Organic sales up 2 percent. Excluding project deliveries, the organic sales increase was 3 percent  EBIT at SEK 977 M, an increase of 5 percent, corresponding to a 1 margin of 11.7 percen

  27. Slide 27: Continued focus on growth and excellence

    Continued focus on growth and excellence 2019 priorities  Manage market conditions  Manage sales and margin development through market positioning, operational excellence and improved customer integration  Continued portfolio management to improve leading positions  Manage constraints in supply

  28. Slide 28: Outlook Q1 2019

    Outlook Q1 2019  Demand is expected to be on a par with, or somewhat lower than, the fourth quarter of 2018, adjusted for seasonal variations 28

  29. Slide 29: Highlights, Business areas, Financials

    Highlights Business areas Financials Summary & Q1 2019 outlook Q&A 29

  30. Slide 30: | TRELLEBORG

    | TRELLEBORG

Trelleborg — Q4 2018 Earnings Presentation on 6ix