Slide 1: Third Quarter 2019 Earnings Conference
Third Quarter 2019 Earnings Conference 24 October, 2019
Slide 2: Today’s presenters
Today’s presenters JOHAN OSKAR MENCKEL HELLSTRÖM CEO CFO Since: 2012 Since: 2011 Gränges since: 2004 2
Slide 3: Third quarter 2019: Soft market conditions and production disturbances
Third quarter 2019 Soft market conditions and production disturbances ○ Continued soft market conditions – Lower demand from automotive customers ○ Temporary production disturbances – Huntingdon and Salisbury plants affected ○ Reduced sales volume and operating profit – Sales volume declined by 8% –
Slide 4: Light vehicle production decreased by 3% and HVAC production increased by 3%
Light vehicle production decreased by 3% and HVAC production increased by 3% in the third quarter End market production growth (YoY) End market Automotive HVAC Region Global Asia Europe Americas Americas Q3 2019 -3% -5% ±0% +2% +3% Q4 2019 -3% -4% -2% -2% Full year 2019 -5% -6% -3% -2% +1% Source: A
Slide 5: Temporary production disturbances in the US restricted available production capacity
Temporary production disturbances in the US restricted available production capacity in the third quarter ○ Temporary production disturbances affected the Huntingdon and Salisbury plants in July and August ○ The specific issues behind the disturbances have been solved ○ Impact on already capacity co
Slide 6: Sales volume decreased by 8% in the third quarter
Sales volume decreased by 8% in the third quarter due to reduced market demand and lower available capacity Gränges sales volume (ktonnes) Asia Europe Americas Gränges Group -15% -7% -6% -8% 57.5 54.0 93.4 85.8 20.8 15.1 17.7 14.1 49.3 45.2 49.3 45.2 44.1 40.6 8.2 8.8 2018 2019 2018 2019 2018 2019 2
Slide 7: Important milestone reached for US expansion projects
Important milestone reached for US expansion projects ○ First coil in the new Huntingdon rolling mill successfully rolled on September 30 ○ All new equipment is now operational and production capacity will gradually be ramped up over coming quarters ○ Expansion projects enables higher sales volume g
Slide 8: Lower sales volume and adjusted operating profit in the third quarter
Lower sales volume and adjusted operating profit in the third quarter Sales volume and adjusted operating profit Adjusted operating profit per tonne 500 1,250 4 Adjusted operating profit per tonne (kSEK) 3.3 1005 Adjusted operating profit (SEK million) 400 933 913 1,000 3 Sales volume (ktonnes) 2.6
Slide 9: Financial overview – third quarter 2019
Financial overview – third quarter 2019 SEK million Q3 January - September 2019 2018 Change 2019 2018 Change Sales volume (ktonnes) 85.8 93.4 -8.1% 269.5 287.5 -6.3% Net sales 2,998 3,322 -9.7% 9,295 9,836 -5.5% Adjusted operating profit1 190 230 -17.7% 721 813 -11.3% Adjusted operating margin (%) 6
Slide 10: Net debt maintained at SEK 3.6 billion during the third quarter
Net debt maintained at SEK 3.6 billion during the third quarter through strong cash generation Change in net debt -2,000 2.6 2.7 Adjusted cash flow before financing SEK 442 million -2,500 SEK million -3,000 -1 -122 259 -3,500 -287 -3,560 305 -200 -3,606 -4,000 Net debt Adjusted Change in Other Maint
Slide 11: Efficiency measures have been implemented to adjust the cost base
Efficiency measures have been implemented to adjust the cost base Implemented cost efficiency measures General savings Capacity Organizational program adjustment efficiency ○ Reduction of ○ Temporary shut ○ Reduction of white temporary manning down of select collar organization in production Europe
Slide 12: Outlook - fourth quarter 2019
Outlook - fourth quarter 2019 ○ IHS estimates that global light vehicle production will decrease by 3% in fourth quarter ○ Gränges expects a sales volume decrease by mid to high-single digits in the fourth quarter – Mid to high-single digit decrease for automotive materials on global level – Mid to
Slide 13: Summary - third quarter 2019
Summary - third quarter 2019 ○ Continued soft market conditions ○ Temporary production disturbances ○ Reduced sales volume and operating profit ○ Strong cash generation ○ Important milestone reached for US expansion 13
Slide 14: Q&A
Q&A Johan Menckel, CEO Oskar Hellström, CFO
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