Trelleborg Ab Class B · OMXSTO:TREL_B

Trelleborg Ab Class B — Q3 2018 Earnings Presentation

30 slides from Trelleborg Ab Class B's earnings presentation, Nov 13, 2018

  1. Slide 1: July - September 2018

    July - September 2018 Peter Nilsson, President & CEO Ulf Berghult, CFO 1

  2. Slide 2: Highlights, Business areas, Financials

    Highlights Business areas Financials Summary & Q4 2018 outlook Q&A 2

  3. Slide 3: A solid quarter: Q3 2018 financial summary

    A solid quarter Q3 2018 financial summary  Sales at SEK 8 300 M, increase of 14 percent.  Organic sales up 4 percent. Excluding project deliveries, the organic sales increase was 6 percent  EBIT at SEK 1 133 M, an increase of 23 percent, corresponding to a 1 margin of 13.6 percent  Items affecti

  4. Slide 4: Organic sales development by geography

    Organic sales development by geography Total Group 1 Organic sales excl. project-related business Jul-Sep 18 Jul-Sep 17 6% 5% Western Europe Share Jul-Sep 18 Jul-Sep 17 47% 5% 6% North America Other Europe Share Jul-Sep 18 Jul-Sep 17 Share Jul-Sep 18 Jul-Sep 17 22% 8% 6% 11% -3% -4% Asia & Other mar

  5. Slide 5: Highlights, Business areas, Financials

    Highlights Business areas Financials Summary & Q4 2018 outlook Q&A 5

  6. Slide 6: Structural growth and slightly higher margins: Trelleborg Coated Systems

    Structural growth and slightly higher margins 1 Trelleborg Coated Systems  Organic sales: unchanged SEK M Q3 2018 Q3 2017 Change, %  Structural growth: +11% Net sales 913 768 19  Alignment of mixing operation impacted Organic, % 0 -4 organic sales adversely by 1%-point Structural, % 11 0  Coated

  7. Slide 7: Solid organic growth in all major regions: Trelleborg Industrial Solutions

    Solid organic growth in all major regions 1 Trelleborg Industrial Solutions  Organic sales: +9% SEK M Q3 2018 Q3 2017 Change, %  Deliveries to general industry Net sales 1 870 1 609 16 developed well Organic, % 9 5  Building-related segments slightly Structural, % - 9 weaker Exchange rate, % 7 -1

  8. Slide 8: Order intake growing, recovery pushed to 2019: Offshore & Construction

    Order intake growing, recovery pushed to 2019 1 Trelleborg Offshore & Construction  Organic sales: -19% SEK M Q3 2018 Q3 2017 Change, %  Sales development created under- Net sales 558 647 -14 absorption, impacted earnings Organic, % -19 -17  Some projects pushed into 2019 Structural, % - -  Grow

  9. Slide 9: Performing well in all aspects: Trelleborg Sealing Solutions

    Performing well in all aspects 1 Trelleborg Sealing Solutions  Organic sales: +8% SEK M Q3 2018 Q3 2017 Change, %  All geographical and market Net sales 2 787 2 388 17 segments developed favorably Organic, % 8 8  Asian sales particularly strong Structural, % 1 3  EBIT and margin improved on Exch

  10. Slide 10: Growing in a seasonally weak quarter: Trelleborg Wheel Systems

    Growing in a seasonally weak quarter 1 Trelleborg Wheel Systems  Organic sales: +3% SEK M Q3 2018 Q3 2017 Change, %  Positive agri sales in N.A., flat in Net sales 2 280 1 992 14 Europe, somewhat weaker in Asia Organic, % 3 7  Agri tire OE developing well, Structural,% 3 0 aftermarket subdued Exc

  11. Slide 11: Highlights, Business areas, Financials

    Highlights Business areas Financials Summary & Q4 2018 outlook Q&A 11

  12. Slide 12: Solid sales growth continues

    Solid sales growth continues Sales development +14% 8 300 7 310 July - September [%] Organic 4 Structural 2 Currency 8 Total 14 Q3 17 Q3 18 +7% 25 663 23 873 January - September [%] Organic 3 Structural 1 Currency 3 Total 7 9M 17 9M 18 12

  13. Slide 13: Ten quarters of positive sales development

    1 Ten 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 5% 2 3 3 0% -5% -2 -3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 15 15 16 16 16 16 17 17 17 17 18 18 18 Of which organic growth, %: -3 0 -4 -6 -5 -4 3 3 3 7 4

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

    Highest third-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 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18

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

    Highest third-quarter EBIT to date 1 EBIT development EBIT EBIT-margin +23% +1.0 1 133 13.6 12.6 920 Jul - Sep Q3 17 Q3 18 Q3 17 Q3 18 +18% +1.3 3 717 14.5 3 163 13.2 Jan - Sep 9M 17 9M 18 9M 17 9M 18 1Excluding items affecting comparability 15

  16. Slide 16: 22 consecutive quarters of improved EBIT

    22 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 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 ROS % EBIT 1Excluding items affecting compa

  17. Slide 17: Total Group profit & loss statement

    Total Group Profit & loss statement SEK M Q3 2 0 18 Q3 2 0 17 C hang e, % 9 M 2 0 18 9 M 2 0 17 C hang e, % EBIT, excl. items affecting comparability 1 133 920 23 3 717 3 163 18 EBIT margin, % 13,6 12,6 1.0 p.p. 14,5 13,2 1.3 p.p. Restructuring co sts -28 -45 -78 -227 Capital gain divestment o f co

  18. Slide 18: Strong underlying EPS improvement

    Strong underlying EPS improvement Earnings per share +23% +23% +21% % 2.88 2.88 2.98 3.0 2.47 2.5 2.34 2.34 2.0 1.5 1.0 0.5 0.0 Group, Total Continuing operations Continuing operations excl. items affecting comparability¹ Q3 17 Q3 18 ¹No dilution effects arose. 18

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

    Cash flow impacted by higher capex and sales 1 Operating cash flow 231 967 -204 847 -147 Q3 17 EBITDA² Net capex Working capital Q3 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 88 90 89 90 87 3 000 83 82 78 78 77 76 76 71 80 2 500 2 000 60 1 500 40 1 000 20 500 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18

  21. Slide 21: Steadily decreasing underlying leverage

    Steadily decreasing underlying leverage Net debt / EBITDA, R12M -0.2 -0.2 X -0.1 2.0 2.0 2.0 1.9 1.8 1.8 1.8 1.5 1.0 0.5 0.0 Group, Total Continuing operations Continuing operations excl. items affecting comparability Q3 17 Q3 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 1.8 45 1.8 1.7 40 40 38 38 1.6 35 36 1.4 1.4 1.4 35 34 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 Q3 Q3 Net debt / E

  23. Slide 23: Slight underlying ROE improvement

    Slight underlying ROE improvement Return on equity, R12M % 18 16 -2.0 0.3 14 12.3 11.8 12 11.5 10.3 10 8 6 4 2 0 Group, Total Continuing operations excl. items affecting comparability Q3 17 Q3 18 23

  24. Slide 24: Financial guidelines for full-year 2018

    Financial guidelines for full-year 2018  Capex: SEK ~1,8 - 2 Bn  Restructuring costs: SEK ~150-200 M (previous: 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: Summary & Q4 2018 outlook

    Highlights Business areas Financials Summary & Q4 2018 outlook Q&A 25

  26. Slide 26: A solid quarter: Q3 2018 financial summary

    A solid quarter Q3 2018 financial summary  Sales at SEK 8 300 M, increase of 14 percent.  Organic sales up 4 percent. Excluding project deliveries, the organic sales increase was 6 percent  EBIT at SEK 1 133 M, an increase of 23 percent, corresponding to a 1 margin of 13.6 percent  Items affecti

  27. Slide 27: Continued focus on growth and excellence

    Continued focus on growth and excellence 2018 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 Q4 2018

    Outlook Q4 2018  Demand is expected to be on a par with the third quarter of 2018, adjusted for seasonal variations 28

  29. Slide 29: Q&A

    Highlights Business areas Financials Summary & Q4 2018 outlook Q&A 29

  30. Slide 30: Trelleborg

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