Slide 1: Second Quarter Earnings Presentation
SECOND QUARTER Earnings Presentation 15 July 2022
Slide 2: Strong result despite very challenging environment in the second quarter
Strong result despite very challenging environment in the second quarter ○ Safety first priority – serious setbacks in quarter ○ Sales volume 123 ktonnes (131) – Good demand except in automotive – China lock-down and Ukraine war – Reduced output in Shanghai and Salisbury ○ Adjusted operating profit
Slide 3: Successful mitigation of COVID-19 lock-down in China by an extraordinary team effort
Successful mitigation of COVID-19 lock-down in China by an extraordinary team effort ○○Gränges GrängesShanghai Shanghaiproduction production facility facilityininCOVID-19 COVID-19lock-down lock-downin April andand in April MayMay ○○Over Over200 200employees employeesvolunteered tovolunteered live an
Slide 4: Raised ambition level for climate and circularity
Raised ambition level for climate and circularity Committing to climate neutrality by 2040 Raised ambitions for recycling and circularity 2017 2020 2025 2030 2035 2040 ktonnes ~10X -19 ~6X ~-60 3X 1X Net- zero 2017 2020 2025 2030 % 4
Slide 5: Gränges Endure – our new product brand for sustainable and circular solutions
Gränges Endure – our new product brand for sustainable and circular solutions Helping our customers decarbonize Carbon footprint at maximum 4.0 tCO2e/t, cradle-to-gate Meeting demands of climate- conscious end-users Third-party verified carbon footprint Offering the highest quality with the Th
Slide 6: Continued good sustainability performance in 2022
Continued good sustainability performance in 2022 Carbon emissions intensity1 ○ Commitment to climate neutrality by 11.4 -14% 12 2040 and joining the Science-Based 9.1 8.9 9.3 9.0 Targets initiative tCO2e/tonne 7.9 8 ○ Significant decarbonization progress 4 Scope 1+2 with record-low total carbon foo
Slide 7: Generally good demand but China lock-down, Ukraine war and temporary stop in Salisbury impacted sales
Generally good demand but China lock-down, Ukraine war and temporary stop in Salisbury impacted sales Q2 2022 sales volume growth by business area and end-customer market Gränges Americas Gränges Eurasia Gränges Group HVAC -5% Automotive -8% Automotive -11% Speciality Other packaging -4% niches +1%
Slide 8: Margins continued to recover in the second quarter as price adjustments increasingly offset cost increases
Margins continued to recover in the second quarter as price adjustments increasingly offset cost increases Sales volume and Adjusted operating profit per tonne 120 5.0 Adjusted operating profit per tonne (kSEK) 4.2 100 3.2 3.1 2.5 Sales volume (ktonnes) 2.4 2.6 80 1.9 60 0.0 40 -2.5 20 69 70 64 61 5
Slide 9: Financial overview – second quarter 2022
Financial overview – second quarter 2022 SEK million Q2 January - June 2022 2021 Change 2022 2021 Change Sales volume (ktonnes) 122.5 131.4 -6.8% 249.2 258.1 -3.4% Net sales 6,875 4,609 49% 12,955 8,651 50% Adjusted operating profit1 374 309 21% 732 651 12% Adjusted operating profit per tonne (kSEK)
Slide 10: Stable net debt and improved leverage in second quarter helped by gradually falling aluminium price
Stable net debt and improved leverage in second quarter helped by gradually falling aluminium price Change in financial net debt -2 000 2.6x Adjusted cash flow before financing 2.3x -2 500 SEK 722 million -3 000 SEK million -3 500 -47 -71 177 -4 000 -147 -239 -4 500 -4 409 663 -323 -4 396 -5 000 Fin
Slide 11: Gränges Americas – second quarter 2022
Gränges Americas – second quarter 2022 Sales volume ○ Sales volume decreased by -8% 80 -8% – Continued weak automotive market 60 ktonnes – Temporary stop in Salisbury facility 40 20 69 64 57 64 64 ○ All-time-high operating profit and margin 0 Q2 Q3 Q4 Q1 Q2 – Price increases fully compensated Adjust
Slide 12: Gränges Eurasia – second quarter 2022
Gränges Eurasia – second quarter 2022 Sales volume ○ Challenging situation in Asia due to 80 -6% COVID-19 lock-down in China 60 ktonnes 40 ○ Sales volume declined by -6% 20 – Europe ±0% and Asia -18% 70 61 59 68 66 0 – Continued weak automotive market Q2 Q3 Q4 Q1 Q2 Adjusted operating profit 200 4 ○
Slide 13: Outlook – third quarter 2022
Outlook – third quarter 2022 ○ Short-term macro environment and market outlook remains uncertain ○ So far, few concrete signs of sequentially weakening demand going into third quarter ○ Ambition to continue margin defense and leverage reduction 13
Slide 14: Navigate
NAVIGATE Sustainable growth
Slide 15: Strong value creation for many years, but poor performance recently
Strong value creation for many years, but poor performance recently 20% 15% Target Value ROCE 10% WACC 5% 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 15
Slide 16: The Navigate plan for sustainable growth
The Navigate plan for sustainable growth 1 Restore 2 Build 3 Invest Strong value creation World’s best aluminium in sustainable growth technology company Recycling Optimization Finalize Utilize New Markets M&A&P Optimize 16
Slide 17: High ambitions
High ambitions Sustainable Growth o World’s best aluminium 3 Invest technology company 2 Build o 15% ROCE 1 Restore o 10% operating profit growth o Continue toward 2040 climate neutrality 14 22 30 17
Slide 18: New targets
New targets Profitability Profit growth Capital structure Dividend 20% 30% 3 50% 20% 40% 15% 2 10% 30% 10% 0% 20% 1 5% -10% 10% 0% -20% 0 0% 2014 2022 2014 2022 2014 2022 2014 2021 Return on capital Average operating Financial net debt Dividend as per cent employed profit growth1 normally between of
Slide 19: Summary: good progress on many fronts
Summary: good progress on many fronts ○ Important steps forward on sustainability ○ Strong customer interest globally for sustainable, electric vehicle and battery offerings ○ Existing investment programs making good headway ○ New USD 52 million investment in recycling in Americas ○ Battery cathode
Slide 20: Q&A
Q&A Jörgen Rosengren, CEO Oskar Hellström, CFO
Slide 21: Slide 21