Slide 1: First Quarter Earnings Presentation
FIRST QUARTER Earnings Presentation 21 April 2022
Slide 2: Strong result despite turbulent environment
Strong result despite turbulent environment ○ Stable sales volume despite dramatic development in Europe and Asia – Sales volume 127 ktonnes (127) ○ Improved margin despite large cost increases – Adj. operating profit SEK 357 million (342) ○ Significant working capital build-up due to increased alum
Slide 3: Leading positions in four key end-customer markets
Leading positions in four key end-customer markets Rolling 12 month sales volume by end-customer market Other niches Automotive 23% 37% 18% HVAC Speciality packaging 22% 3
Slide 4: Positive effects of action program in first quarter
Positive effects of action program in first quarter Price increases and surcharges Sales efforts in Cost savings and productivity non-automotive markets Price increases fully compensated Growth in other segments compensated for net cost increases for weak automotive sales Adj. operating profit per t
Slide 5: Focused growth efforts compensate for weak auto sales
Focused growth efforts compensate for weak auto sales Q1 2022 sales volume growth by business area and end-customer market Gränges Americas Gränges Eurasia Gränges Group HVAC +9% Automotive -18% Automotive -19% Speciality Other Other packaging +19% niches +39% niches +19% Speciality Automotive -22%
Slide 6: Impact on Gränges of the Russian war in Ukraine
Impact on Gränges of the Russian war in Ukraine ○ Limited supply chain disruption so far, but large impact on Polish colleagues Finspång ○ All business with Russia, Belarus and occupied Ukraine stopped (<0.5%) ○ Increasing aluminium price drives Konin significant increase of working capital Ukraine
Slide 7: Impact on Gränges of COVID-19 outbreak in China
Impact on Gränges of COVID-19 outbreak in China ○ Gränges’ Shanghai site is located in an area impacted by lockdowns Finspång ○ Significant disruptions to operations mitigated by outstanding efforts – First quarter sales volume loss limited to 2 ktonnes Konin China Shanghai ○ Second quarter outlook
Slide 8: Investment projects on track for completion in 2022
Investment projects on track for completion in 2022 Gränges Americas ○ Huntingdon recycling and casting centre expansion ○ Newport rolling mill rebuild Gränges Eurasia ○ Konin capacity expansion ○ Finspång logistics improvement 8
Slide 9: Near-zero carbon aluminium enabled by further USD 52 million expansion
Near-zero carbon aluminium enabled by further USD 52 million expansion of recycling and casting operations ○ New recycling and casting centre to enable production of 25 ktonnes near-zero carbon aluminium solutions – Fully powered by renewable electricity – Solutions with high recycled content ○ Bene
Slide 10: Despite turbulence, margin improved in the first quarter
Despite turbulence, margin improved in the first quarter as price increases started to offset cost increases Sales volume and Adjusted operating profit per tonne 100 4.0 3.9 Adjusted operating profit per tonne (kSEK) 3.0 2.7 2.8 80 2.6 2.0 2.0 Sales volume (ktonnes) 60 0.0 40 -2.0 20 63 73 69 70 64
Slide 11: Financial overview – first quarter 2022
Financial overview – first quarter 2022 SEK million Q1 12 months rolling 2022 2021 Change Mar 2022 Dec 2021 Change Sales volume (ktonnes) 126.7 126.7 0.0% 488.9 488.96 0.0% Net sales 6,080 4,043 50% 20,167 18,130 11% Adjusted operating profit1 357 342 4.5% 1,024 1,008 1.5% Adjusted operating margin
Slide 12: Increased net debt and leverage in first quarter
Increased net debt and leverage in first quarter due to dramatically increased aluminium price Change in net debt -2 000 2.2 Adjusted cash flow before financing 2.9 -2 500 SEK -1 224 million -3 000 SEK million -3 500 -3 643 528 -4 000 -4 500 -1 642 -11 -84 -5 000 -70 -54 -4 991 -5 500 Net debt Adjus
Slide 13: Increased aluminium price impacted net working capital
Increased aluminium price impacted net working capital Aluminium price development Indicative impact on net working capital 5 000 Q1 2022 4 000 Average Q1 2022: 3 750 Aluminium in ktonnes 120 + 650 NWC 3 000 USD / tonne Average Q4 2021: 3 100 USD/tonne 650 Aluminium price 2 000 increase SEK/tonne 7,
Slide 14: Gränges Americas – first quarter 2022
Gränges Americas – first quarter 2022 Sales volume ○ Sales volume increased by 2% 80 +2% – Continued strong market conditions 60 ktonnes 40 ○ All-time-high operating profit and margin 20 – Increasing costs offset by higher 63 69 64 57 64 average fabrication price 0 Q1 Q2 Q3 Q4 Q1 – Positive FX effec
Slide 15: Gränges Eurasia – first quarter 2022
Gränges Eurasia – first quarter 2022 Sales volume ○ Turbulent environment due to Russia- 80 -7% Ukraine war and COVID-19 in China 60 – 2 ktonnes lost production in China ktonnes 40 – Highly uncertain outlook 20 73 70 61 59 68 ○ Sales volume declined by -7%1 0 Q1 Q2 Q3 Q4 Q1 – Europe -1% and Asia -18
Slide 16: Continued strong sustainability progress
Continued strong sustainability progress Carbon emissions intensity1 Sourced aluminium scrap 12 -21% 50 33 35 31 1.0 29 30 10 27 0.9 40 26 0.8 1.0 0.9 25 0.9 8 tCO2e/tonne 30 per cent ktonnes 20 6 10.5 12 15 9.1 20 4 8.3 8.0 8.4 8.1 10 10 2 5 0 0 0 Baseline Q1 Q2 Q3 Q4 Q1 Baseline Q1 Q2 Q3 Q4 Q1 201
Slide 17: Summary – first quarter 2022
Summary – first quarter 2022 ○ Stable sales volume despite dramatic development in Europe and Asia ○ Improved margin despite large cost increases ○ Significant working capital build-up due to increased aluminium price ○ Investment projects proceed as planned ○ Near-zero carbon aluminium enabled by e
Slide 18: Outlook – second quarter 2022
Outlook – second quarter 2022 ○ The developments of the Russian war in Ukraine and of the COVID-19 outbreak in China are very difficult to predict ○ Sales volume in the second quarter is expected to be lower than in last year – Market demand currently expected to support a similar volume as in last
Slide 19: Q&A
Q&A Jörgen Rosengren, CEO Oskar Hellström, CFO
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