Trelleborg Ab Class B · OMXSTO:TREL_B

Trelleborg Ab Class B — Q2 2015 Earnings Presentation

40 slides from Trelleborg Ab Class B's earnings presentation, Jul 21, 2015

  1. Slide 1: April – June 2015

    April – June 2015 Peter Nilsson, President & CEO Ulf Berghult, CFO

  2. Slide 2: Highlights

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q3 2015 outlook Q&A 2 2015-07-21

  3. Slide 3: Record earnings despite muted market growth

    Record earnings despite muted market growth Q2 2015 highlights  Muted organic sales Y/Y, but structural growth and positive FX- movements yield robust sales growth  Good market positions, cost control and currency improved the results to highest level to date  Trelleborg’s EBIT-margin at 13.5% -

  4. Slide 4: Organic growth initiatives and acquisitions

    Organic growth initiatives and acquisitions Recap of Q2 2015 events  Acquisition of Armstrong Tyres, an Australian service and distribution company of agricultural tires  Frank Müller, new CEO of the joint venture TrelleborgVibracoustic, assumed his position on June 1, 2015 4 2015-07-21

  5. Slide 5: Yet another robust quarter

    Yet another robust quarter Group financial highlights, Q2 2015 Net sales SEK M Q2 2015 Q2 2014 Change, %  Sales: +14%; Organic: -1%; Net sales 6 531 5 726 14 Structure: +4%; Currency +11% Organic -1 -1 Structural 4 0 Earnings Exchange rate 11 3  Highest quarterly EBIT to date Operating profit excl

  6. Slide 6: Highlights

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q3 2015 outlook Q&A 6 2015-07-21

  7. Slide 7: Good impact from acquisitions and efficiency

    Good impact from acquisitions and efficiency 1 Trelleborg Coated Systems  Organic sales: 0% SEK M Q2 2015 Q2 2014 Change, %  Structural growth: +24% Net sales 672 475 41 Organic, % 0 -2  Engineered fabrics stronger in Structural, % 24 - North America, weaker in Europe  Printing blankets weaker i

  8. Slide 8: Strong profits despite muted general industry

    Strong profits despite muted general industry 1 Trelleborg Industrial Solutions  Organic sales: -4% SEK M Q2 2015 Q2 2014 Change, %  Structural growth: +7% Net sales 1 358 1 226 11 Organic, % -4 -2  Mixed geographical and market Structural, % 7 2 segment sales development  Fewer oil/gas deliveri

  9. Slide 9: Good recovery from first quarter

    Good recovery from first quarter 1 Trelleborg Offshore & Construction  Organic sales: +6% SEK M Q2 2015 Q2 2014 Change, %  Positive organic sales in oil/gas Net sales 1 174 967 21 but challenges remain Organic, % 6 -4  Fewer infrastructure projects in Structural, % - - the quarter Exchange rate,

  10. Slide 10: Solid results yet again

    Solid results yet again 1 Trelleborg Sealing Solutions  Organic sales: -3% SEK M Q2 2015 Q2 2014 Change, %  Mixed geographical and market Net sales 2 129 1 957 9 segment development Organic, % -3 4  Aerospace and automotive strong, Structural, % - - general industry still lacklustre Exchange rate

  11. Slide 11: Organic sales closing on previous year

    Organic sales closing on previous year 1 Trelleborg Wheel Systems  Organic sales: -4% SEK M Q2 2015 Q2 2014 Change, %  Agri segment still depressed Net sales 1 136 1 057 7 Organic, % -4 -8  Robust industrial tires growth Structural, % 2 -  Market positions protect margins Exchange rate, % 9 3 

  12. Slide 12: Highlights

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q3 2015 outlook Q&A 12 2015-07-21

  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 2015-07-21

  14. Slide 14: Best results and margin in a single quarter

    Best results and margin in a single quarter 1 TrelleborgVibracoustic  Organic sales: +4% EUR M Q2 2015 Q2 2014 Change, %  Positive sales in all geo markets but Net sales 491.9 444.0 11 South America Organic, % 4 8  Higher volumes and effective cost Structural, % - 1 control yield best results to

  15. Slide 15: Highlights

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q3 2015 outlook Q&A 15 2015-07-21

  16. Slide 16: Sales increase through FX and acquisitions

    Sales increase through FX and acquisitions Sales development +14% 6 531 5 726 Apr - Jun % Organic -1 Apr – Jun Structural 4 Currency 11 Total 14 Q2 14 Q2 15 +14% 12 901 11 323 Jan - Jun % Jan – Jun Organic -2 Structural 4 Currency 12 Total 14 6M 14 6M 15 16 2015-07-21

  17. Slide 17: Tough market conditions in agri segment

    Tough market conditions in agri segment Organic sales development % 5% 4 5% 4% 3% 3 2% 2 2 1% 0% -1% 0 -1 -1 -2% -2 -2 -2 -2 -3% -4% -4 -5% -5 -6% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 12 12 12 13 13 13 13 14 14 14 14 15 15 17 2015-07-21

  18. Slide 18: Negative organic growth but improvement on Q1

    Negative organic growth but improvement on Q1 Sales per business area Apr - Jun Jan - Jun SEK M 2015 2014 Change % Organic % 2015 2014 Change % Organic % 672 475 41 0 Coated Systems 1 355 948 43 0 1 358 1 226 11 -4 Industrial Solutions 2 698 2 409 12 -5 1 174 967 21 6 Offshore & Construction 2 163 1

  19. Slide 19: Growing sales trend continues

    Growing sales trend continues Sales development, R12M SEK M SEK M 7 000 25 000 6 000 5 000 20 000 4 000 3 000 15 000 2 000 1 000 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 Quarter (LHS) R12M (RHS) 19 2015-07-21

  20. Slide 20: Organic sales growth by geography

    Organic sales growth by geography Picture distorted by project-related business North America Share Apr-Jun 15 Apr-Jun 14 Western Europe 22% -8% 11% Share Apr-Jun 15 Apr-Jun 14 51% 2% -10% Other Europe Share Apr-Jun 15 Apr-Jun 14 6% -10% 7% Asia & Other markets Share Apr-Jun 15 Apr-Jun 14 17% -3% 9%

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

    Organic sales excl. project-related business Different picture emerges Western Europe Share Apr-Jun 15 Apr-Jun 14 North America 53% -3% -6% Share Apr-Jun 15 Apr-Jun 14 23% -4% 4% Other Europe Share Apr-Jun 15 Apr-Jun 14 7% 3% 7% Asia & Other markets South and Other America Share Apr-Jun 15 Apr-Jun 1

  22. Slide 22: Highest operating profit recorded

    Highest operating profit recorded 1 Operating profit development Operating profit Operating margin +10% -0,5 802 883 14,0% 13,5% Apr - Jun Q2 14 Q2 15 Q2 14 Q2 15 +9% -0,7 1 581 1 716 14,0% 13,3% Jan - Jun 6M 14 6M 15 6M 14 6M 15 1 Excluding items affecting comparability and TrelleborgVibracoustic 2

  23. Slide 23: Best EBIT despite weak agri and oil & gas

    Best EBIT despite weak agri and oil & gas 1 Group operating profit per business area Apr - Jun Jan - Jun SEK M 2015 2014 Change % 2015 2014 Change % 87 60 45 Coated Systems 177 121 46 154 135 14 Industrial Solutions 295 252 17 68 93 -27 Offshore & Construction 76 157 -52 496 454 9 Sealing Solutions

  24. Slide 24: Nine quarters of improved profits

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

  25. Slide 25: Total Group

    Total Group Profit & Loss statement Apr - Jun Jan - Jun 2015 2014 Change % SEK M 2015 2014 Change % 883 802 10 Operating Profit 1 716 1 581 9 13,5% 14,0% -0,5 pp Operating Margin 13,3% 14,0% -0,7 pp -23 -99 Restructuring costs -58 -117 137 29 372 Associated income from Trelleborg Vibracoustic 274 11

  26. Slide 26: TrelleborgVibracoustic

    TrelleborgVibracoustic Impact on Trelleborg’s accounts Apr - Jun Apr - Jun Jan - Jun Jan - Jun 2015 2014 EUR M 2015 2014 47,3 39,5 Operating profit excl. items affecting comparability 93,5 78,1 -2,7 -2,3 Acquisition related costs -2,9 -2,6 -1,2 -1,6 Amortization on intangible assets -2,6 -3,1 -2,0 -

  27. Slide 27: Underlying EPS increased by 29 percent

    Underlying EPS increased by 29 percent Earnings per share – second quarter % +43% +43% +29% 3,0 2,84 2,78 2,78 2,5 2,20 2,0 1,95 1,95 1,5 1,0 0,5 0,0 Group, Total Continuing operations Continuing operations excl. items affecting comparability Q2 14 Q2 15 27 2015-07-21

  28. Slide 28: Improved cash flow due to stronger profits

    Improved cash flow due to stronger profits 1 Operating cash flow +106 -72 30 603 539 Apr - Jun Q2 14 EBITDA 2 Net capex Working Q2 15 capital 1 Excluding items affecting comparability and TrelleborgVibracoustic. 28 2015-07-21 2 Including other non cash flow affecting items.

  29. Slide 29: More capex reflects on conversion

    More capex reflects on conversion 1 Operating cash flow, R12M MSEK % 3 500 120 100 3 000 96 97 96 100 92 90 88 90 2 500 83 78 78 78 72 73 80 70 69 2 000 65 60 1 500 40 1 000 500 20 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 Cash conversi

  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 -8 369 -8 099 -12 706 2008 2009 2010 2011 2012 2013 2014 2015 Q2 1 Total Group 30 2015-07-21

  31. Slide 31: Slight net gearing increase from last year

    Slight net gearing increase 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 44 38 38 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 Q2 Q2 Net gearing Net debt / EBITDA 1 Total Group 31

  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 +5% X +12% 2,0 2,0 1,9 1,9 1,7 1,5 1,0 0,5 0,0 Group, Total Continuing operations excl items affecting comparability Q2 14 Q2 15 32 2015-07-21

  33. Slide 33: ROE on long term target

    ROE on long term target Return On Equity, R12M % 18 1,3 2,1 2,0 16 15,7% 14,8% 14,9% 14,4% 15,0% 14 12,7% 12,9% 12 10 8 6 4 2 0 Group, Total Continuing operations Continuing operations excl items affecting comparability Q2 14 Q2 15 33 2015-07-21

  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: Highlights

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q3 2015 outlook Q&A 35 2015-07-21

  36. Slide 36: Record earnings despite muted market growth

    Record earnings despite muted market growth Q2 2015 highlights  Muted organic sales Y/Y, but structural growth and positive FX- movements yield robust sales growth  Good market positions, cost control and currency improved the results to highest level to date  Trelleborg’s EBIT-margin at 13.5% -

  37. Slide 37: Continued focus on growth and excellence

    Continued focus on growth and excellence 2015 priorities  Manage uncertain market conditions  Continued focus on innovation, profitable growth, selected segments and geographies  Manage margin development through operational excellence and improved customer integration  Continued portfolio manag

  38. Slide 38: Outlook Q3 2015

    Outlook Q3 2015  Demand in the third quarter of 2015 is expected to be on a par with the second quarter of 2015, adjusted for seasonal variations 38 2015-07-21

  39. Slide 39: Highlights

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q3 2015 outlook Q&A 39 2015-07-21

  40. Slide 40: 40 2015-07-21

    40 2015-07-21

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