Trelleborg Ab Class B · OMXSTO:TREL_B

Trelleborg Ab Class B — Q1 2015 Earnings Presentation

40 slides from Trelleborg Ab Class B's earnings presentation, Apr 23, 2015

  1. Slide 1: January – March 2015

    January – March 2015 Peter Nilsson, President & CEO Ulf Berghult, CFO

  2. Slide 2: Agenda

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q2 2015 outlook Q&A 2 2015-04-23

  3. Slide 3: Robust earnings in a challenging market

    Robust earnings in a challenging market Q1 2015 highlights  Mixed picture in terms of market development – some pockets of growth in Europe, while slightly negative sentiment in a few US segments  Significantly lower world market price of oil has heightened uncertainty  Agri segment still under p

  4. Slide 4: Organic growth initiatives and acquisitions

    Organic growth initiatives and acquisitions Recap of Q1 2015 events  Acquisition of DGMS, a French service and distribution company of industrial tires  Acquisition of 50 percent outstanding shares in Bulgarian polymer sealing manufacturer  Appointment of a new CEO of the joint venture Trelleborg

  5. Slide 5: Robust earnings in a challenging market

    Robust earnings in a challenging market Group financial highlights, Q1 2015 Net sales SEK M Q1 2015 Q1 2014 Change, %  Sales: +14%; Organic: -4%; Net sales 6 370 5 597 14 Structure: +4%; Currency +14% Organic -4 3 Structural 4 0 Earnings Exchange rate 14 1  Highest quarterly EBIT so far Operating

  6. Slide 6: Agenda

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q1 2015 outlook Q&A 6 2015-04-23

  7. Slide 7: Efficiency measures start to impact margins

    Efficiency measures start to impact margins 1 Trelleborg Coated Systems  Organic sales: -1% SEK M Q1 2015 Q1 2014 Change, %  Structural growth: +24% Net sales 683 473 44 Organic, % -1 -3  Engineered fabrics weaker in Structural, % 24 4 Europe, growth in North America  Printing blankets weaker in

  8. Slide 8: Profit improvement despite lower volumes

    Profit improvement despite lower volumes 1 Trelleborg Industrial Solutions  Organic sales: -6% SEK M Q1 2015 Q1 2014 Change, %  Structural growth: +9% Net sales 1 340 1 183 13 Organic, % -6 1  Mixed geographical and market Structural, % 9 1 segment sales development  Fewer oil/gas deliveries Exc

  9. Slide 9: Tough quarter but expect improvement in Q2

    Tough quarter but expect improvement in Q2 1 Trelleborg Offshore & Construction  Organic sales: -2% SEK M Q1 2015 Q1 2014 Change, %  Positive organic sales in oil/gas Net sales 989 859 15 Organic, % -2 3  Fewer infrastructure projects Structural, % - -2  Deliveries of low margin projects Exchang

  10. Slide 10: Another strong quarter

    Another strong quarter 1 Trelleborg Sealing Solutions  Organic sales: +1% SEK M Q1 2015 Q1 2014 Change, %  Mixed geographical and market Net sales 2 204 1 917 15 segment development Organic, % 1 8  Aerospace and automotive strong Structural, % - -  Solid development due to market Exchange rate,

  11. Slide 11: Solid results despite market conditions

    Solid results despite market conditions 1 Trelleborg Wheel Systems  Organic sales: -11% SEK M Q1 2015 Q1 2014 Change, %  Agri OE-market sharply down Net sales 1 122 1 126 0 Organic, % -11 -1  Agri aftermarket less affected Structural, % 1 1  Industrial tires more stable, but US Exchange rate, %

  12. Slide 12: Agenda

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q2 2015 outlook Q&A 12 2015-04-23

  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 2015-04-23

  14. Slide 14: Highest operating margins to date

    Highest operating margins to date 1 TrelleborgVibracoustic  Organic sales: +2% EUR M Q1 2015 Q1 2014 Change, %  Positive sales development in all Net sales 485.8 447.3 9 geo markets but South America Organic, % 2 9  Higher volumes and effective cost Structural, % - 1 control Exchange rate, % 7 -5

  15. Slide 15: Agenda

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q2 2015 outlook Q&A 15 2015-04-23

  16. Slide 16: Sales increase through FX and acquisitions

    Sales increase through FX and acquisitions Sales development +14% 6 370 5 597 Jan - Mar % Organic -4 Jan – Mar Structural 4 Currency 14 Total 14 Q1 14 Q1 15 16 2015-04-23

  17. Slide 17: Tough market conditions in agri segment

    Tough market conditions in agri segment Organic sales development % 8% 6 6% 5 5% 4% 3 2% 2 2 0% 0 -2% -1 -2 -2 -2 -2 -4% -4 -5 -6% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 12 12 12 12 13 13 13 13 14 14 14 14 15 17 2015-04-23

  18. Slide 18: Tough quarter from a volume perspective

    Tough quarter from a volume perspective Sales per business area Jan - Mar SEK M 2015 2014 Change % Organic % Coated Systems 683 473 44 -1 Industrial Solutions 1 340 1 183 13 -6 Offshore & Construction 989 859 15 -2 Sealing Solutions 2 204 1 917 15 1 Wheel Systems 1 122 1 126 0 -11 Other items 127 14

  19. Slide 19: Growing sales trend continues

    Growing sales trend continues Sales development, R12M SEK M SEK M 7 000 24 000 6 000 22 000 5 000 20 000 4 000 18 000 3 000 16 000 2 000 14 000 1 000 12 000 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 Quarter (LHS) R12M (RHS) 19 2015-04-2

  20. Slide 20: Organic sales growth by geography

    Organic sales growth by geography Picture distorted by project-related business Asia & Other markets Western Europe Share Jan-Mar 15 Jan-Mar 14 Share Jan-Mar 15 Jan-Mar 14 17% -3% 18% 51% -5% -4% North America Share Jan-Mar 15 Jan-Mar 14 Other Europe 22% -2% 2% Share Jan-Mar 15 Jan-Mar 14 6% -8% 21%

  21. Slide 21: Organic sales excl. project-related business

    Organic sales excl. project-related business Different picture emerges – sound development in Asia Other Europe Share Jan-Mar 15 Jan-Mar 14 7% 2% 7% Asia & Other markets Share Jan-Mar 15 Jan-Mar 14 14% 12% 19% South and Other America Share Jan-Mar 15 Jan-Mar 14 3% -11% -3% Share = Actual 2014 21 201

  22. Slide 22: Highest operating profit recorded

    Highest operating profit recorded 1 Operating profit development Operating profit Operating margin +7% -0,8 779 833 13,9% 13,1% Jan-Mar Q1 14 Q1 15 Q1 14 Q1 15 1 Excluding items affecting comparability and TrelleborgVibracoustic 22 2015-04-23

  23. Slide 23: Best EBIT so far despite poor agri and offshore

    Best EBIT so far despite poor agri and offshore 1 Group operating profit per business area Jan - Mar SEK M 2015 2014 Change % Coated Systems 90 61 48 Industrial Solutions 141 117 21 Offshore & Construction 8 64 -88 Sealing Solutions 525 436 20 Wheel Systems 116 148 -22 Other items -47 -47 Continuing

  24. Slide 24: Eight quarters of improved profits

    Eight 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 ROS % EBIT 1 Excluding items affecting comparability and TrelleborgVibr

  25. Slide 25: Total Group

    Total Group Profit & Loss statement Jan - Mar SEK M 2015 2014 Change % Operating Profit 833 779 7 Operating Margin 13,1% 13,9% -0,8 pp Restructuring costs -35 -18 Associated income from Trelleborg Vibracoustic 137 87 57 Operating profit 935 848 10 Operating Margin 14,7% 15,2% -0,5 pp Financial incom

  26. Slide 26: TrelleborgVibracoustic

    TrelleborgVibracoustic Impact on Trelleborg’s accounts Jan - Mar Jan - Mar EUR M 2015 2014 Operating profit excl. items affecting comparability 46,2 38,6 Acquisition related costs -0,2 -0,3 Amortization on intangible assets -1,4 -1,5 Restructuring costs -4,3 -4,2 Operating Profit 40,3 32,6 Financial

  27. Slide 27: Underlying EPS increased by 13 percent

    Underlying EPS increased by 13 percent Earnings per share – first quarter % +13% 3,0 +11% +11% 2,64 2,54 2,54 2,5 2,29 2,29 2,34 2,0 1,5 1,0 0,5 0,0 Group, Total Continuing operations Continuing operations excl. items affecting comparability Q1 14 Q1 15 27 2015-04-23

  28. Slide 28: Working capital increase mostly due to FX

    Working capital increase mostly due to FX 1 Operating cash flow +93 -37 -364 367 Jan - Mar 59 Q1 14 EBITDA 2 Net capex Working Q1 15 capital 1 Excluding items affecting comparability and TrelleborgVibracoustic. 28 2015-04-23 2 Excluding other non cash flow affecting items.

  29. Slide 29: Slight dip highlighted by tough comparison

    Slight dip highlighted by tough comparison 1 Operating cash flow, R12M MSEK % 3 500 120 100 3 000 96 97 96 90 100 92 90 88 78 2 500 80 83 78 72 73 80 70 69 2 000 65 60 1 500 40 1 000 500 20 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 Cash

  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 -7 580 -8 369 -12 706 2008 2009 2010 2011 2012 2013 2014 2015 Q1 1 Total Group 30 2015-04-23

  31. Slide 31: Net gearing unchanged from last year

    Net gearing unchanged from last year 1 Net debt / EBITDA R12M and net gearing development % X 6,9 140 7 124 120 6 100 5 4,3 80 4 68 60 53 3 48 38 38 40 40 2,1 1,9 2,0 40 2 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 Q1 Q1 Net gearing Net debt / EBITDA 1 Total Group 31 2015-0

  32. Slide 32: Higher ratio as a result of increased net debt

    Higher ratio as a result of increased net debt Net debt / EBITDA, R12M +18% X +20% 2,0 2,0 1,8 1,7 1,5 1,5 1,0 0,5 0,0 Group, Total Continuing operations excl items affecting comparability Q1 14 Q1 15 32 2015-04-23

  33. Slide 33: ROE drawing closer to long-term target

    ROE drawing closer to long-term target Return On Equity, R12M % 18 0,2 16 1,6 1,3 14,3% 14,5% 15,0% 14 13,3% 13,3% 11,7% 12,0% 12 10 8 6 4 2 0 Group, Total Continuing operations Continuing operations excl items affecting comparability Q1 14 Q1 15 33 2015-04-23

  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: Agenda

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q2 2015 outlook Q&A 35 2015-04-23

  36. Slide 36: Robust earnings in a challenging market

    Robust earnings in a challenging market Q1 2015 highlights  Mixed picture in terms of market development – some pockets of growth in Europe, while slightly negative sentiment in a few US segments  Significantly lower world market price of oil has heightened uncertainty  Agri segment still under p

  37. Slide 37: Continued focus on growth and excellence

    Continued focus on growth and excellence 2015 priorities  Manage uncertain market conditions  Continued focus on profitable growth, selected segments and geographies  Manage margin development through operational excellence  Continued portfolio management to improve leading positions  Trellebor

  38. Slide 38: Outlook Q2 2015

    Outlook Q2 2015  Demand in the second quarter of 2015 is expected to be on a par with the first quarter of 2015, adjusted for seasonal variations 38 2015-04-23

  39. Slide 39: Agenda

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q2 2015 outlook Q&A 39 2015-04-23

  40. Slide 40: 40 2015-04-23

    40 2015-04-23

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