Trelleborg Ab Class B · OMXSTO:TREL_B
Trelleborg Ab Class B — Investor Day (2014)
42 slides from Trelleborg Ab Class B's investor day presentation, Jul 8, 2014
Slide 1: Trelleborg
TAMA ene TRELLEBORG
Slide 2: Capital Markets Day 2014
Capital Markets Day 2014 Ulf Berghult, Chief Financial Officer 2
Slide 3: Agenda
Agenda Financial targets Continuing operations Excellence programs Financial position Financial targets and guidelines 3
Slide 4: Financial targets
Financial targets 1 Continuing operations (excl. TrelleborgVibracoustic) Organic growth: ≥ 5% EBIT margin2: ≥12% 1 Trelleborg Group (continuing operations incl. TrelleborgVibracoustic) Return on Equity (RoE): ≥15% 1 Over a business cycle 4 2 Excluding items affecting comparability
Slide 5: Organic sales development still some way to go
Organic sales development still some way to go 1 Organic growth target: ≥ 5% average Organic growth 16% 13 12% 9 9 8 8% 6 5 5% 4% 3 2 2 2 0 0% -2 -2 -4% -5 -21 -24% 2006 2007 2008 2009 2010 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 1 Continuing operations 5
Slide 6: Above margin target in last two quarters (R12M)
Above margin target in last two quarters (R12M) 1 EBIT-margin target: ≥12% EBIT, SEK M EBIT-margin 3 000 15% 12,7% 12,2% 10,6% 11,0% 12% 9,3% 9,3% 9,6% 2 000 10% 8,7% 5,5% 1 000 5% 1 518 1 958 1 996 1 021 1 840 2 231 2 342 2 613 2 752 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 R12 EBIT EBI
Slide 7: Drivers behind EBIT-margin improvement
Drivers behind EBIT-margin improvement 1 EBIT-margin bridge EBIT-margin 15% 0,5% 12% 10% 3,5% 12,7% 5% 8,7% 0% 2006 Gross Profit SG&A 2014 Q1 R12 Gross Profit SG&A Sales: Cost: Restructuring Supported by Branding Restructuring Efficiency Portfolio optimization Positioning Excellence prog
Slide 8: Long-term ROE target of 15 percent
Long-term ROE target of 15 percent Incl. items affecting comparability and incl. TrelleborgVibracoustic Return on Equity1 16% 15% 12% 8% 4% 8,7% 11,1% 7,4% 3,6% 8,9% 10,4% 13,0% 11,4% 11,7% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 R12 1 Continuing operations 8
Slide 9: Closing in on ROE target
Closing in on ROE target Return on Equity, R12M 18% 0,4 16% 0,6 13,9% 14,3% 15% 14% 0,5 11,7% 12,0% 12% 11,2% 11,4% 10% 8% 6% 4% 2% 0 1 Group, Total Continuing operations Continuing operations excl. items affecting comparability Act 2013 R12 Q1 14 1 Continuing operations incl. items affecting compar
Slide 10: Agenda
Agenda Financial targets Continuing operations Excellence programs Financial position Financial targets and guidelines 10
Slide 11: Compounded annual sales growth rate
Compounded annual sales growth rate 1 Sales in constant currency SEK M CAGR2 +4% 25 000 CAGR2 +6% 20 000 15 000 10 000 5 000 18 090 15 980 19 016 20 125 16 015 20 401 20 623 21 492 21 673 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 R12 1 Continuing operations, average currency rate 2013 11 2 C
Slide 12: Growing rapidly in emerging economies
Growing rapidly in emerging economies 1 Sales growth per geography from 2006 to 2013 +8% Western Europe +125% +59% Rest of Europe North America +135% Asia & other Markets +84% South and Central America 1 Relates to a combination of organic growth and M&A activities (SEK M) 12
Slide 13: Improving geographical balance
Improving geographical balance 1 Sales split per geography (based on invoicing address) 70% 68% 60% 54% 20% 20% 17% 17% 9% 10% 6% 4% 2% 3% 0% Western Europe Rest of North South & Central Asia & Other Europe America America Markets 2006 2014 Q1 1 Continuing operations 13
Slide 14: Our five business areas
Our five business areas Sales and EBIT-margin; R12M Q1 2014 EBIT-margin 25% 21,6% 20% 15% 11,7% 10,7% 9,7% 10% 8,1% 5% 0% Sales, SEK M 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 20 000 22 000 Trelleborg Trelleborg Trelleborg Trelleborg Trelleborg Sealing Industrial Wheel Offshore &
Slide 15: Trelleborg Coated Systems
Trelleborg Coated Systems 1 Sales and EBIT-margin Sales, SEK M EBIT-margin 2 100 15% 12,4% 12,6% 11,6% 9,9% 10,7% 10,7% 10,2% 1 400 10% 6,9% 700 5% 5,2% 1 993 1 782 1 890 1 942 1 810 1 738 1 839 1 850 551 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 R12 EBIT-margin Sales 1 Continuing operati
Slide 16: Trelleborg Industrial Solutions
Trelleborg Industrial Solutions 1 Sales and EBIT-margin Sales, SEK M EBIT-margin 6 000 15% 9,4% 9,4% 9,7% 4 000 9,1% 10% 8,2% 8,5% 8,4% 7,2% 2 000 5% 3,1% 4 885 5 312 5 334 4 436 4 591 4 754 4 679 4 578 4 617 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 R12 EBIT-margin Sales 1 Continuing ope
Slide 17: Trelleborg Offshore & Construction
Trelleborg Offshore & Construction 1 Sales and EBIT-margin Sales, SEK M EBIT-margin 4 500 15% 11,9% 11,5% 10,6% 9,2% 9,2% 3 000 10% 8,1% 7,6% 5,9% 1 500 5% 3,4% 2 809 3 401 3 644 3 902 3 589 3 103 3 644 3 587 3 590 0 0% 2 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 R12 EBIT-margin Sales 1 Contin
Slide 18: Trelleborg Sealing Solutions
Trelleborg Sealing Solutions 1 Sales and EBIT-margin Sales, SEK M EBIT-margin 7 500 30% 20,9% 21,0% 21,6% 20,5% 5 000 15,6% 20% 14,3% 14,4% 13,2% 2 500 7,6% 10% 5 946 6 385 6 521 5 258 6 437 7 288 7 215 7 093 7 258 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 R12 EBIT-margin Sales 1 Continui
Slide 19: Trelleborg Wheel Systems
Trelleborg Wheel Systems 1 Sales and EBIT-margin EBIT-margin 4 500 15% 11,7% 11,7% 11,6% 10,4% 9,8% 9,5% 3 000 8,9% 10% 8,8% 7,7% 1 500 5% 3 708 2 990 4 206 3 147 3 248 2 991 3 863 3 865 4 189 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 R12 EBIT-margin Sales 1 Continuing operations excl. it
Slide 20: Solid cash conversion
Solid cash conversion Ratio1 275% 250% 75% 50% 25% 92% 76% 72% 247% 90% 69% 96% 83% 0% 2006 2007 2008 2009 2010 2011 2012 2013 1 Continuing operations excl. items affecting comparability and excl. TrelleborgVibracoustic. 20 Cash conversion = Operating cash flow / EBIT
Slide 21: Working capital as percent of sales
Working capital as percent of sales 1 1 Working Capital / Sales Working Capital / Sales 20% 20% 15% 15% 10% 10% 5% 5% 13,8% 13,3% 15,8% 10,8% 11,0% 13,5% 13,0% 13,7% 0% 0% 2006 2007 2008 2009 2010 2011 2012 2013 1 Continuing operations 21
Slide 22: Capex in line with historical levels
Capex in line with historical levels 1 Net capex vs. depreciation; net capex as percent of sales Net Capex / Depreciation Net Capex / Sales 200% 4,8% 5% 4,0% 4,0% 4,0% 3,7% 4% 150% 3,0% 2,9% 2,6% 3% 100% 2% 50% 1% 98% 144% 161% 78% 76% 121% 126% 129% 0% 0% 2006 2007 2008 2009 2010 2011 2012 2013 % o
Slide 23: TrelleborgVibracoustic
TrelleborgVibracoustic EBIT development, SEK M 1 182 1 078 860 591 539 430 310 98 2008-2010* 2011 2012** 2013 2014 R12M Q1 Trelleborg Automotive AVS TrelleborgVibracoustic Trelleborg share (50%) * Average 23 ** Adjusted proforma
Slide 24: TrelleborgVibracoustic
TrelleborgVibracoustic Financial impact on Trelleborg Group SEK M 700 +91% 600 500 400 300 591 200 310 100 0 EBIT EBIT Trelleborg Automotive AVS 2011 TrelleborgVibracoustic R12M 2014 Q1 24
Slide 25: TrelleborgVibracoustic
TrelleborgVibracoustic Financial impact on Trelleborg Group SEK M 700 +91% 600 500 150 400 63 300 591 135 200 378 310 100 244 0 EBIT EBIT Items Financial net Operating Tax* Net profit* affecting profit* comparability Trelleborg TrelleborgVibracoustic R12M 2014 Q1 Automotive AVS 2011 * Consolidated i
Slide 26: TrelleborgVibracoustic
TrelleborgVibracoustic Financial impact on Trelleborg Group, SEK M 3 202 357 2 824 2 845 Trelleborg TrelleborgVibracoustic Automotive AVS 2011 2014 Q1 Accumulated profits since July 1 2012 Book value at JV formation 26
Slide 27: Agenda
Agenda Financial targets Continuing operations Excellence programs Financial position Financial targets and guidelines 27
Slide 28: Our four Excellence programs
Our four Excellence programs Excellence Excellence Excellence Excellence 28
Slide 29: Three monomers creating the Excellence polymer
Three monomers creating the Excellence polymer 29
Slide 30: Raising the bar via a structured approach
Raising the bar via a structured approach EXCELLENCE PROGRAM CONTRIBUTION 30
Slide 31: Sales and profit define the inventory strategy
Sales and profit define the inventory strategy Example: Working Capital Exellence Sales 4% Sales 56% A GPWell-managed 7% GP 63% Articles 2% levels inventory Articles 10% Inv. 3% Inv. 30% Sales 1% Sales 11% Sales 4% Customized GP 3% GP 15% GP 2% B per customer Gross Profit Zero or Articles 2% Article
Slide 32: Continuous improvements and training events
Continuous improvements and training events Example: Manufacturing Excellence Ridderkerk (Dec.13) BieskoBiala (Mar.13) BA TCO (Hoshin) BU PS (Hoshin) Condé (Apr. 14) BA TSS (Hoshin) Trelleborg (Mar.13) BU FHS (5S) Nantes (March 14) BU Boots (SMED) Xingtail (July13) BA TWS (White Hoshin)
Slide 33: Ensuring constant monitoring and best practice sharing
Ensuring constant monitoring and best practice sharing Example: Manufacturing Excellence 33
Slide 34: Agenda
Agenda Financial targets Continuing operations Excellence programs Financial position Financial targets and guidelines 34
Slide 35: Financial stability creates opportunities
Financial stability creates opportunities 1 Net debt / Equity Net debt / EBITDA ratio Percent Ratio 140% 7 6,9 124% 120% 6 100% 100% 97% 5 4,3 80% 4 3,5 3,6 68% 60% 53% 3 48% 2,1 38% 38% 36% 1,8 1,7 40% 2 1,7 1,4 20% 1 0% 0 2006 2007 2008 2009 2010 2012 2013 2006 2007 2008 2009 2010 2012 2011 2011 2
Slide 36: Agenda
Agenda Financial targets Continuing operations Excellence programs Financial position Financial targets and guidelines 36
Slide 37: Financial targets
Financial targets 1 Continuing operations (excl. TrelleborgVibracoustic) Organic growth: ≥ 5% EBIT-margin2: ≥12% 1 Trelleborg Group (continuing operations incl. TrelleborgVibracoustic) Return on Equity (RoE): ≥15% 1 Over a business cycle 37 2 Excluding items affecting comparability
Slide 38: Organisation from an accounting perspective
Organisation from an accounting perspective Financial targets and reporting structure BA Coated Systems BA Industrial Solutions BA Offshore & Construction BA Sealing Solutions BA Wheel Systems Group items Organic growth: ≥ 5% Net sales – Continuing operations EBIT-margin: ≥ 12% EBIT – Continuing ope
Slide 39: Capex framework
Capex framework 5% SEK M 3% 22 000 1 200 1 100 1 000 ~100-500 900 800 700 ~22 000 600 ~1 200 500 400 ~700 ~700 300 200 100 0 Depreciation Operational capex Strategic capex Peak year Sales 39
Slide 40: Recent and current strategic capex projects
Recent and current strategic capex projects Examples Trelleborg Industrial Solutions New manufacturing sites in China, India, Brazil Trelleborg Coated Systems New solventless line in Italy New urethane line in U.S. Trelleborg Offshore & Construction New manufacturing site in Brazil E
Slide 41: Financial guidelines
Financial guidelines 1 Net debt / Equity ratio: 50% - 100% Restructuring costs 2014: ~SEK 250 M Capex 2014: ~SEK 1,100 - 1,200 M (peak year) Tax rate: ~28% Dividend policy: 30-50% of net profit2 TrelleborgVibracoustic (50% ownership) Restructuring costs 2014: ~EUR 30 M Annual impact fr
Slide 42: Trelleborg
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