Lindab International Ab · OMXSTO:LIAB
Lindab International Ab — Q3 2014 Earnings Presentation
51 slides from Lindab International Ab's earnings presentation, 2014
Slide 1: Lindab Group Q3 2014
lindab | we simplify construction Lindab Group Q3 2014 Q3 Financials New Strategy New Financial Targets Anders Berg, CEO Per Nilsson, CFO
Slide 2: Highlights
lindab | we simplify construction Highlights 2
Slide 3: Lindab Group – Q3 2014 Highlights
lindab | we simplify construction Lindab Group – Q3 2014 Highlights An important quarter showing the way Sales increased by 9% compared to last year, or 5% when adjusted for currency and structure ─ Products & Solutions: 11% (6% adjusted) ─ Building Systems: -1% (-3% adjusted) EBIT amounted to S
Slide 4: Lindab Group – Q3 2014 Highlights
lindab | we simplify construction Lindab Group – Q3 2014 Highlights An important quarter showing the way Platform in place and yielding results, paving the way for the next step on our journey towards an integrated company New Strategy re-positioning Lindab for future prosperity ─ Complete venti
Slide 5: Financials
lindab | we simplify construction Financials 5
Slide 6: Lindab Group Profit & Loss Q3 2014
lindab | we simplify construction Lindab Group Profit & Loss Q3 2014 SEK m Q3 2014 Q3 2013 Sales growth 9% Sales 1,904 1,753 EBIT* 210 195 Structure 0% EBIT* % 11.0 11.1 Currency effect 4% Fin net -12 -27 Organic 5% Tax -48 -37 Net profit 145 101 *) EBIT excluding one-off items of SEK -5 m in Q3 201
Slide 7: 2012 - 2014: weakened sales; increased efficiency
lindab | we simplify construction 2012 - 2014: weakened sales; increased efficiency Sales 12m EBIT 12m EBIT 12m Sales 12m (MSEK) EBIT (MSEK) +25% 600 553 7,000 Sales 0% 550 6,750 500 462 444 445 450 6,500 400 375 350 6,250 306 300 6,000 250 0 2010 2011 2012 2013 2014 EBIT L12M SEK 553 m, EBIT marg
Slide 8: Lindab Group Financial net
lindab | we simplify construction Lindab Group Financial net L12M Financial net as % of average Net debt % Actual Actual adj. for release of old agreement costs 9 8 7 6 5 4 0 Sep Sep Sep 2012 2013 2014 Significantly lower financing costs as a result of the new credit agreement, as well as lower in
Slide 9: Lindab Group Cash flow Q3 2014
lindab | we simplify construction Lindab Group Cash flow Q3 2014 SEK m Q3 2014 Q3 2013 Cash flow from - operating activities 236 234 - change in working capital -54 -36 - investing activities -32 -16 - financial net paid -12 -27 - tax paid -17 -35 Free cash flow 121 120 Adjusted free cash flow* 125
Slide 10: Cash flow Q3 – working capital development
lindab | we simplify construction Lindab Group Cash flow Q3 – working capital development SEK m Q3 2014 Q3 2013 Stock -53 -3 Operating receivables -89 -40 Operating liabilities 88 7 Total change in working capital -54 -36 The change in cash flow from change in working capital is explained by highe
Slide 11: Lindab Group Operating cash flow trend
lindab | we simplify construction Lindab Group Operating cash flow trend Quarterly Quarterly L12M L12M (MSEK) (MSEK) 500 800 400 600 300 172 400 200 153 115 136 200 100 23 0 0 -200 -100 -200 -400 -300 -600 2010 2011 2012 2013 2014 L12M cash flow from operating activities amounted to SEK 470 m 11
Slide 12: Segments
lindab | we simplify construction Segments 12
Slide 13: Products & Solutions
lindab | we simplify construction Products & Solutions Profit & Loss Q3 2014 SEK m Q3 2014 Q3 2013 Sales growth 11% Structure 0% Sales 1,627 1,472 EBIT* 174 143 Currency effect 5% EBIT* % 10.7 9.7 Organic 6% *) excluding one-off items of SEK -5 m in Q3 2014 and SEK -10 m in Q3 2013 All regions and
Slide 14: Building Systems
lindab | we simplify construction Building Systems Profit & Loss Q3 2014 SEK m Q3 2014 Q3 2013 Sales growth -1% Structure 0% Sales 277 281 EBIT* 35 55 Currency effect 2% EBIT* % 12.6 19.6 Organic -3% *) excluding one-off items of SEK -2 m in Q3 2014 and SEK -1 m in Q3 2013 The decline in sales is
Slide 15: Sales development by product areas
lindab | we simplify construction Sales development by product areas Organic growth, L3M Ventilation Products Indoor Climate Solutions Building Systems % Building Product Building Solutions 60 50 40 30 20 10 0 -10 -20 -30 Sep Sep Sep 2012 2013 2014 All product areas within Products & Solutions sho
Slide 16: Market Outlook
lindab | we simplify construction Market Outlook GDP Rebased seasonally adjusted volume index Sources: The national statistical offices The economic recovery in the Eurozone has slowed down since spring and Russian economy has weakened Though, the economic recovery remains fairly strong in Linda
Slide 17: Basics Focus
lindab | we simplify construction A redefined direction for the future of Lindab Same Basics New Focus
Slide 18: The journey towards becoming an integrated company
lindab | we simplify construction Profitable every year since 1959 The journey towards becoming an integrated company CCL Veloduct Butler Europe acquired acquired (Building Systems) Launch of Gold Clear global Astron Strategy trends acquired Dramatic Fittings, distribution Business Areas (Building d
Slide 19: Rethinking the approach and where Lindab was heading
lindab | we simplify construction A clear trend the last 6 years Rethinking the approach and where Lindab was heading EBIT (MSEK) Sales (MSEK) 1.400 10.000 -6% • The last 11 years can be divided into 1.200 2 periods with different +13% characteristics 1.000 8.000 • 2003 to 2008 saw consistent “price
Slide 20: Our approach to strategy
lindab | we simplify construction During 2014 we have developed our road ahead Our approach to strategy 1. 2. 3. Building on Identifying Creating a our Basics opportunities strategy for and trends the future 20
Slide 21: Building on our basics
lindab | we simplify construction 1. Building on our basics 21
Slide 22: Strong market positions with current core product offering
lindab | we simplify construction Presence in more than 30 countries Strong market positions with current core product offering Nordic Region Strong position Building and Ventilation Products CIS and Solutions Lightweight champion Primarily larger pre- Western and Mid-Europe engineered CEE steel bui
Slide 23: A combination of growth oriented and project related business
lindab | we simplify construction Lindab combine two different characteristics in type of business A combination of growth oriented and project related business Products & Solutions Building Systems Largest customer/project: 2% Largest customer/project: 3-10% Share of sales to developed markets: 98%
Slide 24: One Lindab – Preparing the ground for simplified growth
lindab | we simplify construction A matrix organization making it possible to use the full strengths of Lindab One Lindab – Preparing the ground for simplified growth Group functions including Finance, Legal, HR, IR, Sourcing, Market Group Division Sales Region Sales Region Sales Region Sales Region
Slide 25: We have a strong foundation to build on
lindab | we simplify construction The starting point is excellent We have a strong foundation to build on People Products Production and Sales and Processes Distributions Our Basics 25
Slide 26: Untouched since 1959 – still as valid
lindab | we simplify construction Lindab Core Values Untouched since 1959 – still as valid Customer success Down-to-earth Neatness and order 26
Slide 27: Identifying opportunities and trends
lindab | we simplify construction 2. Identifying opportunities and trends 27
Slide 28: Many and close customer relations
lindab | we simplify construction More than 20 000 customers in Lindabs Ecosystem for simplified construction and energy efficient solutions Many and close customer relations CUSTOMERS USERS STRENGTHEN DISTRIBUTION Residential Our 126 branches and Added sales offices Core Optimized product products
Slide 29: Bringing value to many players in the value chain
lindab | we simplify construction Bringing value to many players in the value chain by Simplifying construction and adding energy efficient solutions by… CUSTOMERS USERS … focus on simplifying the … the efficient supply of day through one-stop- best possible products shops and fast, easy-to- complem
Slide 30: Always close and available
lindab | we simplify construction A footprint for customer success Always close and available Where we see opportunities to expand our presence both in Europe as well as towards CIS, Middle East and Asia 2 28 2 USA 2 9 1 1 7 1 2 22 3 1 8 6 2 15 Sales office / Sales branch 3 7 1 1 Local production 1
Slide 31: We see global drivers for growth
lindab | we simplify construction Five clear trends in the world today impacting Lindabs business We see global drivers for growth Environment, legislation and energy saving Intelligent buildings Innovation in materials and processes Growing population and urbanization Global economy patterns 31
Slide 32: Environmental aspects are drivers in all trends
lindab | we simplify construction Environmental aspects are drivers in all trends Intense pressure for Innovations 32
Slide 33: Access to clean air a major and increasing health issue
lindab | we simplify construction Access to clean air a major and 30 kg increasing health issue in many 70% We eat 1 kg of food, cities By 2050 70% of drink 3 kg of liquid and breathe 30 kg 10% world population will live in urban of air – per day Fresher air can areas lead to gains of ten per cent i
Slide 34: The global HVAC market is expected to grow 6% annually
lindab | we simplify construction 6% The global HVAC* market is expected to grow 6% annually to 2018 * HVAC = Heating, Ventilation, Air-conditioning 34
Slide 35: We need to develop our value offering
lindab | we simplify construction Building on our strengths We need to develop our value offering Components become commodities Complete energy efficient solutions tailored to our customers and ”us” – the users 35
Slide 36: We will provide additional value to our customers
lindab | we simplify construction Building on our strengths We will provide additional value to our customers What we want to do • Want to Create energy efficient solutions and complete ventilation solutions • Be a leading industry innovator • Become an even stronger brand in selected markets • Alwa
Slide 37: Creating a Strategy for the Future
lindab | we simplify construction 3. Creating a Strategy for the Future 37
Slide 38: It's about the need to breathe clean air
lindab | we simplify construction It’s about the need to breathe clean air and ultimately conserve the earth's resources through leading technology and know-how, creating good indoor climate. It’s about capturing the global trends and using our joint knowledge and positions of strength to create mor
Slide 39: Developing a strategy to reach our wanted position
lindab | we simplify construction Building on our strengths Simplifying is Developing a strategy to reach our passion, ultimate comfort our wanted position is our vision Supported by Strategic Intiatives People Products Production and Sales and Processes Distributions Our Basics 39
Slide 40: One Lindab. Our customer's closest partners.
lindab | we simplify construction Best practice-sharing for a true “One Lindab”. Optimization of solutions, concepts, methods and sales support for local markets. Development of the brand strategy, pricing and marketing/ sales support. The obvious choice for customers in prioritized market segments
Slide 41: Sustainable, value-creating Supply Chain network
lindab | we simplify construction A sustainable, value-creating Supply Chain network, providing our customers with perfect order fulfilment, optimizing service and cost. Customer-focused Supply Chain, covering the coordination of Demand, R&D and Product Management. End-to-end visibility and coordina
Slide 42: Contractors and installers – complete solutions
lindab | we simplify construction Combine products, systems, knowledge and services to bring value to every stakeholder and climbing the value ladder. Add greater technology content and connectivity to bring simplicity to our customers. Sales of solutions will leverage sales of our other products. E
Slide 43: Culture of innovation leading to customer value
lindab | we simplify construction Create a long-lasting culture of innovation leading to customer value. Form an innovative mind-set, open up knowledge and inspiration exchange both internally and externally. Develop agile processes to harness both incremental and revolutionary innovations. 43
Slide 44: Empower people through the Lindab culture
lindab | we simplify construction Empower people through the Lindab culture, rooted in our core values. Identify, develop and ensure excellent leadership. Strong employer brand to increase the ability to attract and retain the right people to support our sustained success. 44
Slide 45: Five clear strategic focus areas
lindab | we simplify construction Our formula for success Five clear strategic focus areas Leveraging local Optimising the flow Creating offers of Finding new ways Having the right stars to global from purchase to complete ventilation to increase team for our standards. delivery. solutions. customer
Slide 46: Acquisitions primarily in two areas
lindab | we simplify construction With the strategy we also acknowledge the potential for acquisitions Primarily in two areas Solutions Leading European companies within categories “Residential and Light Commercial Ventilation”, “Fire and smoke” and “Indoor Climate Solutions” Market excellence Compa
Slide 47: Transformation into a fully integrated company
lindab | we simplify construction New focus same basics Transformation into a fully integrated company From selling what we produce … … to capturing trends and fulfilling customers’ needs … Business Area driven sales units in each country New flat, matrix organisation BA driven R&D/Product productio
Slide 48: … and bring more value to more people
lindab | we simplify construction Lindab Solus Lindab Fans Lindab Cassette Lindab Residential Lindab Rainline Lindab Pascal Lindab Fire & Smoke Lindab Airy Lindab ADS Installer Lindab Architect Contractor Developer We simplify … Lindab … and bring more value to more people Lindab AHU Lindab IT Solut
Slide 49: Three financial targets supported by the new strategy
lindab | we simplify construction With the strategy we are refining our long term financial targets Three financial targets supported by the new strategy The dividend target is 30% of the company’s 5-8% Annual growth based on 10% 2.5 profit after tax considering opportunities for strategic acquisiti
Slide 50: Strategy in summary
lindab | we simplify construction Strategy in summary Based on global trends and Lindab’s strengths we have defined five Focus Areas where we have “the greatest chance to win”. These focus areas can be seen as “spotlights” on areas where we believe we must place additional attention. The strategy st
Slide 51: CMD 19th of March 2015
lindab | we simplify construction CMD 19th of March 2015 Mark your calendar 51