Slide 1: Second Quarter 2019 Earnings Conference
Second Quarter 2019 Earnings Conference 18 July, 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: Second quarter 2019: Continued soft market conditions
Second quarter 2019 Continued soft market conditions ○ Continued soft market conditions – Lower demand from automotive customers – Sales volume declined by 6% ○ Reduced operating profit – Adjusted operating profit SEK 257 million ○ Strong cash generation ○ Large investments in US and Sweden – Expans
Slide 4: Light vehicle production declined by 6% in the second quarter
Light vehicle production declined by 6% in the second quarter End market production growth (YoY) End market Automotive HVAC Region Global Asia Europe Americas Americas Q2 2019 -6% -6% -7% -2% +3% Q3 2019 +2% +1% +4% +3% Full year -1% 2019 -3% -2% -2% +5% Source: Automotive light vehicle production -
Slide 5: Sales volume decreased by 6% in the second quarter – Asian and European markets especially challenging
Sales volume decreased by 6% in the second quarter – Asian and European markets especially challenging Gränges sales volume (ktonnes) Asia Europe Americas Gränges Group -7% -10% -5% -6% 22.5 58.8 55.8 99.1 92.9 21.0 17.8 16.1 49.6 46.6 49.6 46.6 49.5 46.2 9.2 9.2 2018 2019 2018 2019 2018 2019 2018 2
Slide 6: Focus on expansion projects and cost reduction
Focus on expansion projects and cost reduction Americas Europe and Asia ○ Continued positive market outlook ○ Soft market conditions expected to ○ Finalization of the expansion projects remain short term in Huntingdon and Newport ○ Cost reduction measures taken to ○ First commercial orders are expec
Slide 7: Lower sales volume and adjusted operating profit in the second quarter
Lower sales volume and adjusted operating profit in the second quarter Sales volume and adjusted operating profit Adjusted operating profit per tonne 500 1200 4 1005 3.4 Adjusted operating profit per tonne (kSEK) 953 Adjusted operating profit (SEK million) 933 1000 400 3 Sales volume (ktonnes) 2.6 8
Slide 8: Financial overview – second quarter 2019
Financial overview – second quarter 2019 SEK million Q2 January - June 2019 2018 Change 2019 2018 Change Sales volume (ktonnes) 92.9 99.1 -6.3% 183.7 194.2 -5.4% Net sales 3,188 3,443 -7.4% 6,297 6,514 -3.3% Adjusted operating profit1 257 301 -14.6% 532 583 -8.8% Adjusted operating margin (%) 8.1 8.
Slide 9: Net debt was SEK 3.6 billion at the end of the second quarter
Net debt was SEK 3.6 billion at the end of the second quarter Change in net debt -1,300 2.2 Adjusted cash flow before financing 2.6 SEK 249 million -1,800 SEK million -2,300 -2,800 -19 -41 -61 -3,057 370 -3,300 -447 -242 -63 -3,560 -3,800 Net debt Adjusted Change in Other Maintenance Expansion FY 20
Slide 10: Outlook - third quarter 2019
Outlook - third quarter 2019 ○ IHS estimates that global light vehicle production will increase by 2% in third quarter ○ Gränges expects a sales volume increase by low-single digits in the third quarter – Low to mid-single digit decline for automotive materials on global level – Mid-single digit gro
Slide 11: Summary - second quarter 2019
Summary - second quarter 2019 ○ Continued soft market conditions ○ Reduced operating profit ○ Strong cash generation ○ Large investments in US and Sweden ○ First site achieved ASI certification 11
Slide 12: Q&A
Q&A Johan Menckel, CEO Oskar Hellström, CFO
Slide 13: Gränges