Slide 1: Welcome to HEXPOL – Q4 2018 Report update
Telephone presentation on February 1, 2019, 3 pm CET Please call +46 8213 091 (international call) 020-213 091 (national call, Sweden) 08-213 091 (mobile call, Sweden) and enter meeting code 917 840 Welcome to HEXPOL Q4, 2018 Report update February 1, 2019 CEO Mikael Fryklund CFO Karin Gunnarsson Fe
Slide 2: Agenda
Agenda • Introduction to HEXPOL • Q4 2018 – HEXPOL Group • Q4 2018 – Business areas • January – December – Key figures • Q4 2018 – Summary • January – December – Summary • Q&A February 1, 2019 -2-
Slide 3: HEXPOL – Fast growing with strong margins
HEXPOL – Fast growing with strong margins HEXPOL is a world leading polymers group with strong global positions in advanced polymer compounds (Compounding), gaskets for plate heat exchangers (Gaskets) and wheels made of plastic and rubber materials for forklifts and castor wheel applications (Wheels
Slide 4: HEXPOL – Our vision guides us
HEXPOL - Our vision guides us HEXPOL’s vision is to be market leader, number one or two, in selected technological or geographical segments, to generate profit, growth and shareholder value. February 1, 2019 -4-
Slide 5: HEXPOL – A well positioned Group
HEXPOL – A well positioned Group • Two business areas: ‒ HEXPOL Compounding ‒ HEXPOL Engineered Products • Strong global market positions: • Global presence – Global leading position for Rubber Compounding • Operations in 14 countries – Strong European position in Thermoplastic • Around 4,600 employ
Slide 6: HEXPOL – A well positioned Group
HEXPOL – A well positioned Group • True global footprint • Acquisition oriented – major acquisitions within Compounding: • Historical strong sales growth and good profitability 2010: Elasto, Excel Polymers 2012: Müller Kunststoffe, Robbins • Well invested and strong cash flow 2014: Kardoes, Vigar Ru
Slide 7: HEXPOL – A fast growing Group
HEXPOL – A fast growing Group Contribution to sales made by acquisitions in the past years (acquisition month in parenthesis) M SEK 14 000 Mesgo Gr (Oct 2018) Kirkhill (Sep 2018) 13 000 Valley (Apr 2017) 12 000 Lesina (Mar 2017) 11 000 Berwin (Jun 2016) 10 000 RheTech (Jan 2015) 9 000 PPP (Dec 2014)
Slide 8: HEXPOL – A fast growing Group
HEXPOL – A fast growing Group • Product Development – New segments (for example: flame retardant) – New products in existing segments (for example: weight saving, environment friendly) – Application oriented • Increased market share • Acquisitions mainly within Polymer Compounding – Existing geograp
Slide 9: HEXPOL – A fast growing Group
HEXPOL – A fast growing Group HEXPOL Compounding, value chain* (example): Raw material Manufacturer Rubber and End manufacturers of polymer plastic component OEMs customers compounds manufacturers -Rubber -Silicone -TPE -FKM -PP (reinforced) -PA Business model: The market: • “Glocal” (local producti
Slide 10: HEXPOL – Organisation and sales distribution
HEXPOL – Organisation and sales distribution HEXPOL – With a stable organisation Two business areas: • HEXPOL Compounding (93% of sales) • HEXPOL Engineered Products (7% of sales) HEXPOL – Sales per geographic area Jan 18 - Dec 18 Europe 35% NAFTA 60% Asia 5% February 1, 2019 - 10 -
Slide 11: HEXPOL – A fast growing Group
HEXPOL – A fast growing Group Main customer segments: • Automotive industry – Sales around 36% 2018 • Engineering and general industry • Building & construction • Transportation • Consumer industries • Energy, oil & gas sector • Wire & cable industries • Medical equipment industries • Manufacturers
Slide 12: A fast growing Group with strong margins
HEXPOL – A fast growing Group with strong margins M SEK % 16 000 20,0 Sales 18,0 14 000 Ebit 16,0 12 000 OM (%) 14,0 10 000 12,0 8 000 10,0 8,0 6 000 6,0 4 000 4,0 2 000 2,0 0 0,0 2008 2009* 2010* 2011 2012 2013 2014 2015 2016 2017 2018 *Adjusted for items affecting comparability February 1, 2019 -
Slide 13: HEXPOL – Depreciations & investments
HEXPOL – Depreciations & investments* MSEK 250 200 150 100 50 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Depreciations Investments • Investments in line with/or below depreciations • Jan 18 - Dec 18: Investments are attributable to capacity investments within HEXPOL TPE Compoundin
Slide 14: HEXPOL acquired Kirkhill Rubber September 2018
HEXPOL acquired Kirkhill Rubber September 2018 • Kirkhill Rubber has a state of the art facility in Long Beach, California, US • A well-known US Rubber Compounder with presence in high performance elastomers • Has an annual turnover of around 46 MUSD February 1, 2019 - 14 -
Slide 15: HEXPOL acquired Mesgo Group in October 2018
HEXPOL acquired Mesgo Group in the beginning of October 2018 • Mesgo is an industry leader in high performance elastomers such as fluorocarbons and silicone • Mesgo specialize also in conventional rubber compounds and thermoplastics • State of the art facilities in Carobbio and Gorlago in Italy, and
Slide 16: Q4 2018 – Increased sales and higher operating profit
Q4 2018 – Increased sales and higher operating profit • Sales increased 22% • Positive volume development • Operating profit increased 12% • Profit after tax amounted to 405 MSEK (449 incl. non-recurring effects of 104 MSEK of the US tax reform) 2018 2017 2018 MSEK Q4 Q4 Q3 Sales 3,557 2,926 3,443 +
Slide 17: Q4 2018 – Increased sales and higher operating profit
Q4 2018 – Increased sales and higher operating profit • Sales increased 22% to 3,557 MSEK (2,926) ‒ Positive volume development driven by acquisition ‒ Sales positively affected by higher sales prices due to higher raw material prices ‒ Positive currency effects • In NAFTA increased sales (including
Slide 18: Q4 2018 – Increased sales and higher operating profit
Q4 2018 – Increased sales and higher operating profit Quarter 4 Jan - Dec MSEK 2018 2017 Growth 2018 2017 Growth Sales 3 557 2 926 22% 13 770 12 230 13% Currency -230 -8% -426 -4% Ex. Currency 3 327 2 926 14% 13 344 12 230 9% Acquisition -330 -12% -571 -5% Ex. Currency and acquisition 2 997 2 926 2%
Slide 19: Q4 2018 – Increased sales and higher operating profit
Q4 2018 – Increased sales and higher operating profit - Strong balance sheet, well equipped for further expansion 2018 2017 2018 MSEK Q4 Q4 Q3 Sales 3,557 2,926 3,443 Operating profit, EBIT 522 467 527 Operating margin, % 14.7 16.0 15.3 Profit after tax 405 449 404 Earnings per share, SEK 1.18 1.31
Slide 20: Q4 2018 – Business areas
Q4 2018 – Business areas Increased sales and higher operating profit Net Sales Operating Profit Operating Margin, % 2018 2017 2018 2018 2017 2018 2018 2017 2018 MSEK Q4 Q4 Q3 Q4 Q4 Q3 Q4 Q4 Q3 HEXPOL 3 301 2 704 3 180 486 440 488 14.7 16.3 15.3 Compounding HEXPOL Engineered 256 222 263 36 27 39 14.1
Slide 21: Q4 2018 – HEXPOL Compounding
Q4 2018 – HEXPOL Compounding Increased sales and higher operating profit • Sales increased (incl. Kirkhill Rubber and Mesgo Group) 22% to 3,301 MSEK (2,704) – Sales positively affected by higher sales prices due to higher raw material prices – Positive volume development, with higher volumes in NAFT
Slide 22: Q4 2018 – HEXPOL Compounding
Q4 2018 – HEXPOL Compounding Increased sales and higher operating profit • HEXPOL Compounding NAFTA (incl. Kirkhill) – increased sales – Increased sales to automotive related customers and to wire & cable industry – Stable sales to energy, oil & gas sector – Sales to customers within building & cons
Slide 23: Q4 2018 – HEXPOL Engineered Products
Q4 2018 – HEXPOL Engineered Products Increased sales and higher operating profit • Net sales increased 15% to 256 MSEK (222) – Sales increased significantly in both HEXPOL Wheels and HEXPOL Gaskets • Operating profit increased 33% to 36 MSEK (27) • Operating margin improved to 14.1% (12.2) Net sales
Slide 24: Jan – Dec 2018 – Increased sales and higher result
Jan – Dec 2018 – Increased sales and higher result • Sales increased by 13% • Operating profit increased by 8% • Earnings per share increased by 8% to 4.78 SEK (4.44) • Strong balance sheet Oct-Dec Jan-Dec MSEK 2018 2017 2018 2017 +13% Net Sales 3,557 2,926 13 770 12 230 Operating Profit, EBIT 522 4
Slide 25: Q4 2018 – Increased sales and higher operating profit
Q4 2018 – Increased sales and higher operating profit • Sales increased by 22% to 3,557 MSEK (2,926) • Positive volume development • Operating profit increased by 12% to 522 MSEK (467) • Operating margin amounted to 14.7% (16.0) • Operating cash flow increased to 679 MSEK (609) • Earnings per share
Slide 26: Jan – Dec 2018 – Record sales and profit
Jan – Dec 2018 – Record sales and profit • Sales increased by 13% to 13,770 MSEK (12,230) • Operating profit increased by 8% to 2,150 MSEK (1,986) • Operating margin amounted to 15.6% (16.2) • Operating cash flow increased to 2,019 MSEK (2,001) • Two strategic acquisitions in the field of high perfo
Slide 27: Q & A February 1, 2019
& A @ HEXPOL February 1, 2019 A Material Differenc: e -27-
Slide 28: Thank You!
Thank You! February 1, 2019 - 28 -