Slide 1: Third Quarter 2016 Earnings Conference
Third Quarter 2016 Earnings Conference 27 October, 2016
Slide 2: Today's presenters
Today’s presenters JOHAN OSKAR MENCKEL HELLSTRÖM CEO CFO Since: 2012 Since: 2011 Gränges since: 2004 22
Slide 3: Gränges Group
Gränges Group • A global leader in the market for rolled products for brazed aluminium heat exchangers • Production in Sweden, China and in the US • R&D Centre in Sweden and China • Headquarter in Stockholm • Gränges is represented all over the world • ~1,500 employees • Listed on Nasdaq Stockholm •
Slide 4: Third quarter 2016 – Successful acquisition in US and strong performance in existing business
Third quarter 2016 – Successful acquisition in US and strong performance in existing business Completion of acquisition in the US Sales volume increased by 62% to 62.8 ktonnes – organic growth of 6% Adjusted operating profit increased to SEK 181 million – SEK 132 million if excluding acquisiti
Slide 5: Acquisition in US successfully completed
Acquisition in US successfully completed Gränges has acquired Noranda’s downstream aluminium rolling business Attractive valuation with an EBITDA multiple of 6.2x (FY 2015) The business has net sales of 550 MUSD and some 550 employees Gränges takes an important step towards realising its goa
Slide 6: The acquisition in US is an important step for Gränges to deliver on the 2020 goal and strategy
The acquisition in US is an important step for Gränges to deliver on the 2020 goal and strategy Gränges 2020 goal and strategy Grow significantly above the market rate Become the market leader in all geographical regions Maintain good and sustainable profitability Increase efficiency Grow pres
Slide 7: Diversification of business portfolio strengthens Gränges' position in the market for rolled aluminium
Diversification of business portfolio strengthens Gränges’ position in the market for rolled aluminium Sales volume per end-use Pro forma Gränges incl. Noranda sales market 2015 volume per end-use market 2015 Other 5% HVAC 3% Other 29% Automotive HEX Automotive 47% HEX 92% HVAC 24% Total sales volum
Slide 8: Significant events during third quarter
Significant events during third quarter 9th Technical Seminar in Nanjing, China Gränges adopts to UN Global Compact 8
Slide 9: Market growth of 3% expected for full year 2016
Market growth of 3% expected for full year 2016 Light vehicle production growth (YoY) Region Q3 2016 Q4 2016 outlook FY 2016 outlook Asia +10% 0% +4% Europe -2% +3% +3% Americas 0% +1% 0% Global +5% +2% +3% Source: IHS Automotive, September 16, 2016 9
Slide 10: Strong development in Asia and continued strong growth in Americas – both organic and through acquisition
Strong development in Asia and continued strong growth in Americas – both organic and through acquisition Gränges sales volume (ktonnes) Asia Europe Americas +348% +8% 28.9 +1% 20.8 20.4 19.0 17.6 17.5 16.6 16.9 14.9 15.4 15.0 7.8 9.2 6.5 6.0 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2015 2016 20
Slide 11: Positive trend continues in third quarter and is further strengthened by the US acquisition
Positive trend continues in third quarter and is further strengthened by the US acquisition Rolling 12 months sales volume and adjusted operating profit 250 800 Adjusted operating profit (SEK million) 632 Sales volume (ktonnes) 563 600 541 541 521 528 200 494 193 463 437 444 401 362 374 348 372 371
Slide 12: Successful acquisition in US and strong performance in existing business in third quarter
Successful acquisition in US and strong performance in existing business in third quarter Financial overview SEK million Q3 January - September 2016 2015 Change 2016 2015 Change Sales volume (ktonnes) 62.8 38.9 61.5% 154.4 125.0 23.5% Net sales 1,859 1,281 45.2% 4,662 4,243 9.9% Adjusted operating p
Slide 13: Net debt was SEK 2.8 billion at the end of third quarter
Net debt was SEK 2.8 billion at the end of third quarter Change in net debt 500 Cash flow before financing SEK -2 285 million 0 0.4 -144 -31 2.2 237 Net debt position (SEK million) -500 -335 251 -1 000 -1 500 -2 000 -2 500 -2 598 -3 000 -160 -43 -2 823 -3 500 Net debt Adjusted Change in Other Invest
Slide 14: Total assets were SEK 7.6 billion at the end of third quarter
Total assets were SEK 7.6 billion at the end of third quarter Preliminary impact on the balance sheet from the US acquisition per September 30, 2016 (SEK million) Assets Equity & liabilities Depreciation and Property, plant & equipment 1,712 New bank financing amortisation expected to – 5 year t
Slide 15: US acquisition changes seasonality of Gränges' business
US acquisition changes seasonality of Gränges’ business Sales volume per quarter 2015 100 89.5 85.0 84.8 80 76.7 Sales volume (ktonnes) 60 42.7 42.3 43.4 46.1 45.9 38.9 38.9 37.8 40 20 26 24 25 26 27 27 24 27 25 24 22 23 0 Q1 Q2 Q3 Q4 Existing business Combined existing Quarterly sales volume busine
Slide 16: Sales volume is an important earnings driver for the acquired business
Sales volume is an important earnings driver for the acquired business Income statement of acquired business USD million 2015 Sales volume (ktonnes) 172 Net sales 551 Cost of materials 360 Operating expenses 139 Adjusted EBITDA1 52 Cost of materials may be considered as fully variable with sales v
Slide 17: Outlook
Outlook Global Light Vehicle Production is expected to grow by 2%1 in Q4 2016 – for the full year 2016 a growth of 3% is projected Automotive HEX - above market growth is expected in Asia and Americas, while growth in line with the market is projected in Europe in Q4 The acquired business in U
Slide 18: Summary of third quarter
Summary of third quarter Best quarter for Gränges so far Completion of US acquisition Sales volume 62.8 ktonnes Adjusted operating profit rose to SEK 181 million Earnings per share SEK 2.52 Net debt of 2.2x EBITDA 18
Slide 19: Q&A
Q&A Johan Menckel, CEO Oskar Hellström, CFO
Slide 20: Appendix: Sales volume 2015-2016
Appendix: Sales volume 2015-2016 Sales volume ktonnes 2015 2016 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Existing business 42.7 43.4 38.9 38.9 163.9 45.1 46.5 41.1 Acquired business 42.3 46.1 45.9 37.8 172.1 45.3 46.7 46.51 Combined business 85.0 89.5 84.8 76.7 336.1 90.4 93.2 87.6 1. In total 21.8 ktonnes of the sa
Slide 21: GRANGES
GRANGES