Trelleborg Ab Class B · OMXSTO:TREL_B

Trelleborg Ab Class B — Q3 2015 Earnings Presentation

40 slides from Trelleborg Ab Class B's earnings presentation, Oct 22, 2015

  1. Slide 1: July – September 2015

    July – September 2015 Peter Nilsson, President & CEO Ulf Berghult, CFO

  2. Slide 2: Highlights

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q4 2015 outlook Q&A 2 2015-10-22

  3. Slide 3: Earnings growth despite tougher markets

    Earnings growth despite tougher markets Q3 2015 highlights  Muted organic sales Y/Y, but structural growth and positive FX-movements yield sales growth  Good market positions, cost control and currency improved the results to highest third quarter level to date  Trelleborg’s EBIT-margin at 13.4%

  4. Slide 4: Organic growth initiatives and acquisitions

    Organic growth initiatives and acquisitions Recap of Q3 2015 events  Acquisition of remaining 40 percent outstanding shares in Mexican industrial tires distributor – previously consolidated  Acquisition of smaller Austrian printing blanket convertor/distributor  Expansion plans announced in advan

  5. Slide 5: Group financial highlights, Q3 2015

    Earnings growth despite tougher markets Group financial highlights, Q3 2015 Net sales SEK M Q3 2015 Q3 2014 Change, %  Sales: +6%; Organic: -3%; Net sales 5 975 5 618 6 Structure: +1%; Currency +8% Organic -3 -2 Structural 1 2 Earnings Exchange rate 8 6  Highest third quarter EBIT and Operating pr

  6. Slide 6: Business areas

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q4 2015 outlook Q&A 6 2015-10-22

  7. Slide 7: Trelleborg Coated Systems

    Good impact from acquisitions and efficiency 1 Trelleborg Coated Systems  Organic sales: +4% SEK M Q3 2015 Q3 2014 Change, %  Structural growth: +19% Net sales 602 442 36 Organic, % 4 -3  Engineered fabrics stronger in Structural, % 19 - North America, weaker in Europe  Printing blankets weaker

  8. Slide 8: Trelleborg Industrial Solutions

    Muted general industry in most geographies 1 Trelleborg Industrial Solutions  Organic sales: -7% SEK M Q3 2015 Q3 2014 Change, %  Structural growth: -3% Net sales 1 215 1 267 -4 Organic, % -7 -4  Mixed geographical and market Structural, % -3 11 segment sales development  Fewer oil/gas deliverie

  9. Slide 9: Trelleborg Offshore & Construction

    Weaker markets impact sales and profit 1 Trelleborg Offshore & Construction  Organic sales: +1% SEK M Q3 2015 Q3 2014 Change, %  Good organic sales in oil/gas but Net sales 1 019 917 11 challenges remain Organic, % 1 -7  Mixed development in Structural, % - - infrastructure projects Exchange rate

  10. Slide 10: Trelleborg Sealing Solutions

    Solid results yet again 1 Trelleborg Sealing Solutions  Organic sales: -2% SEK M Q3 2015 Q3 2014 Change, %  Mixed geographical and market Net sales 2 060 1 929 7 segment development Organic, % -2 2  Aerospace and automotive strong, Structural, % 0 - general industry muted Exchange rate, % 9 6  C

  11. Slide 11: Trelleborg Wheel Systems

    Organic sales closing on previous year 1 Trelleborg Wheel Systems  Organic sales: -6% SEK M Q3 2015 Q3 2014 Change, %  Agri segment still depressed Net sales 1 037 1 008 3 Organic, % -6 -6  Industrial tires growth in Europe, but Structural, % 3 - weaker in North America and Asia  Market position

  12. Slide 12: TrelleborgVibracoustic (50% ownership)

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q4 2015 outlook Q&A 12 2015-10-22

  13. Slide 13: A solid development

    A solid development Global leader in automotive antivibration solutions Stand-alone company Global organization established Successful integration Stand-alone financing Solid performance 13 2015-10-22

  14. Slide 14: TrelleborgVibracoustic: Best results and margin in a single quarter

    Best results and margin in a single quarter 1 TrelleborgVibracoustic  Organic sales: +5% EUR M Q3 2015 Q3 2014 Change, %  Sales growth in Europe and North Net sales 470.5 437.3 8 America, softer in Asia Organic, % 5 1  Brazil still depressed Structural, % - 1 3 1  Higher volumes and effective co

  15. Slide 15: Financials

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q4 2015 outlook Q&A 15 2015-10-22

  16. Slide 16: Sales driven by acquisitions and FX

    Sales driven by acquisitions and FX Sales development +6% 5 618 5 975 Jul - Sep [%] Organic -3 Jul – Sep Structural 1 Currency 8 Total 6 Q3 14 Q3 15 +11% 18 876 16 941 Jan - Sep [%] Organic -2 Jan – Sep Structural 3 Currency 10 Total 11 9M 14 9M 15 16 2015-10-22

  17. Slide 17: Market conditions remain challenging

    Market conditions remain challenging Organic sales development % 5% 4 5% 4% 3% 3 2% 2 2 1% 0% -1% 0 -1 -1 -2% -2 -2 -2 -3% -3 -4% -4 -5% -5 -6% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 12 12 13 13 13 13 14 14 14 14 15 15 15 17 2015-10-22

  18. Slide 18: Sales per business area

    Increased sales despite negative organic growth Sales per business area Jul - Sep Jan - Sep SEK M 2015 2014 Change % Organic % 2015 2014 Change % Organic % 602 442 36 4 Coated Systems 1 957 1 390 41 1 1 215 1 267 -4 -7 Industrial Solutions 3 913 3 676 6 -5 1 019 917 11 1 Offshore & Construction 3 18

  19. Slide 19: Growing sales supported by F/X movements

    Growing sales supported by F/X movements Sales development, R12M SEK M SEK M 7 000 25 000 6 000 5 000 20 000 4 000 3 000 15 000 2 000 1 000 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 Quarter (LHS) R12M (RHS) 19 2015-10-22

  20. Slide 20: Organic sales growth by geography

    Organic sales growth by geography Picture distorted by project-related business Western Europe North America Share Jul-Sep 15 Jul-Sep 14 Share Jul-Sep 15 Jul-Sep 14 51% -2% -9% 22% -15% 8% Other Europe Share Jul-Sep 15 Jul-Sep 14 6% 0% -4% Asia & Other markets Share Jul-Sep 15 Jul-Sep 14 17% 8% 2% S

  21. Slide 21: Organic sales growth by geography excl. projects

    Organic sales growth by geography Organic sales excl. project-related business Western Europe North America Share Jul-Sep 15 Jul-Sep 14 Share Jul-Sep 15 Jul-Sep 14 53% -2% -7% 23% -6% 6% Other Europe Share Jul-Sep 15 Jul-Sep 14 7% 2% 8% Asia & Other markets Share Jul-Sep 15 Jul-Sep 14 14% -5% 14% So

  22. Slide 22: Highest Q3 operating profit recorded

    Highest Q3 operating profit recorded 1 Operating profit development Operating profit Operating margin +9% +0,4 730 798 13,0% 13,4% Apr - Sep Q3 14 Q3 15 Q3 14 Q3 15 +9% -0,3 2 311 2 514 13,6% 13,3% Jan - Sep 9M 14 9M 15 9M 14 9M 15 1 Excluding items affecting comparability and TrelleborgVibracoustic

  23. Slide 23: Group operating profit per business area

    Best Q3 EBIT despite weak agri and oil/gas 1 Group operating profit per business area Jul - Sep Jan - Sep SEK M 2015 2014 Change % 2015 2014 Change % 66 43 53 Coated Systems 243 164 48 124 136 -9 Industrial Solutions 419 388 8 46 71 -35 Offshore & Construction 122 228 -46 463 433 7 Sealing Solutions

  24. Slide 24: Ten quarters of improved profits

    Ten quarters of improved profits 1 EBIT and margin, R12M MSEK % 3 500 14 3 000 12 2 500 10 2 000 8 1 500 6 1 000 4 500 2 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 ROS % EBIT 1 Excluding items affecting comparability and TrelleborgVibrac

  25. Slide 25: Total Group Profit & Loss statement

    Total Group Profit & Loss statement Jul - Sep Jan - Sep 2015 2014 Change % SEK M 2015 2014 Change % 798 730 9 Operating Profit 2 514 2 311 9 13,4% 13,0% 0,4 pp Operating Margin 13,3% 13,6% -0,3 pp -109 -41 Restructuring costs -167 -158 131 110 19 Associated income from Trelleborg Vibracoustic 405 22

  26. Slide 26: TrelleborgVibracoustic impact on Trelleborg's accounts

    TrelleborgVibracoustic Impact on Trelleborg’s accounts Jul - Sep Jul - Sep Jan - Sep Jan - Sep 2015 2014 EUR M 2015 2014 45.9 38.4 Operating profit excl. items affecting comparability 139.4 116.5 -0.5 -0.6 Acquisition related costs -3.4 -3.2 -1.3 -1.5 Amortization on intangible assets -3.9 -4.6 -1.2

  27. Slide 27: Underlying EPS increased by 11 percent

    Underlying EPS increased by 11 percent Earnings per share – third quarter % 3,0 +11% +8% +6% 2,56 2,5 2,28 2,28 2,31 2,11 2,15 2,0 1,5 1,0 0,5 0,0 Group, Total Continuing operations Continuing operations excl. items affecting comparability Q3 14 Q3 15 27 2015-10-22

  28. Slide 28: Underlying cash flow in line with last year

    Underlying cash flow in line with last year 1 Operating cash flow +103 -15 -90 899 897 -131 766 Jul - Sep Q3 14 EBITDA2 Net capex Working Q3 15 Dividend Q3 15 capital Subtotal from JV in Q3 2014 1 Excluding items affecting comparability and TrelleborgVibracoustic 28 2015-10-22 2 Including other non

  29. Slide 29: Stable cash conversion

    Stable cash conversion 1 Operating cash flow, R12M MSEK % 3 500 120 100 3 000 96 97 96 100 92 90 88 90 2 500 83 78 78 78 77 72 73 80 69 2 000 65 60 1 500 40 1 000 500 20 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 Cash conversion % Operat

  30. Slide 30: Net debt impacted by currency effects

    Net debt impacted by currency effects 1 Net debt development -5 360 -5 637 -6 409 -6 425 -7 195 -7 735 -8 369 -12 706 2008 2009 2010 2011 2012 2013 2014 2015 Q3 1 Total Group 30 2015-10-22

  31. Slide 31: Gearing on par with last year

    Gearing on par with last year 1 Net debt / EBITDA R12M and gearing development % X 6,9 140 7 124 120 6 100 5 4,3 80 4 68 60 53 3 48 38 38 40 41 2,1 1,9 40 2 1,8 1,8 1,8 1,4 20 1 0 0 08 09 10 11 12 13 14 15 08 09 10 11 12 13 14 15 Q3 Q3 Gearing Net debt / EBITDA 1 Total Group 31 2015-10-22

  32. Slide 32: Debt ratios remain on stable levels

    Debt ratios remain on stable levels Net debt / EBITDA, R12M +6% X +6% 1,8 1,8 1,7 1,7 1,6 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 Group, Total Continuing operations excl items affecting comparability Q3 14 Q3 15 32 2015-10-22

  33. Slide 33: ROE on long term target

    ROE on long term target Return On Equity, R12M % 18 0,5 1,0 0,7 16 15,0% 15,5% 14,5% 14,5% 15,0% 13,5% 13,8% 14 12 10 8 6 4 2 0 Group, Total Continuing operations Continuing operations excl items affecting comparability Q3 14 Q3 15 33 2015-10-22

  34. Slide 34: Financial guidelines for full-year 2015

    Financial guidelines for full-year 2015 Trelleborg Group:  Restructuring costs: ~SEK 250 M  Capex: ~SEK 1,100-1,200 M  Tax rate1: ~28% TrelleborgVibracoustic (50% ownership):  Restructuring costs: ~EUR 20 M  Annual impact from purchase price allocation (PPA): ~EUR 6 M  Tax rate1: ~29% Note: 34

  35. Slide 35: Summary & Q4 2015 outlook

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q4 2015 outlook Q&A 35 2015-10-22

  36. Slide 36: Earnings growth despite tougher markets

    Earnings growth despite tougher markets Q3 2015 highlights  Muted organic sales Y/Y, but structural growth and positive FX-movements yield sales growth  Good market positions, cost control and currency improved the results to highest third quarter level to date  Trelleborg’s EBIT-margin at 13.4%

  37. Slide 37: Continued focus on growth and excellence

    Continued focus on growth and excellence 2015 priorities  Manage uncertain market conditions  Continued focus on innovation, profitable growth, selected segments and geographies  Manage margin development through operational excellence and improved customer integration  Continued portfolio manag

  38. Slide 38: Outlook Q4 2015

    Outlook Q4 2015  Demand is expected to be on a par with, or slightly weaker, than the third quarter of 2015, adjusted for seasonal variations 38 2015-10-22

  39. Slide 39: Q&A

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q4 2015 outlook Q&A 39 2015-10-22

  40. Slide 40: 40 2015-10-22

    40 2015-10-22

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