Slide 1: Fourth Quarter 2016 Earnings Conference
Fourth Quarter 2016 Earnings Conference 2 February, 2017
Slide 2: Today's presenters
Today’s presenters JOHAN OSKAR MENCKEL HELLSTRÖM CEO CFO Since: 2012 Since: 2011 Gränges since: 2004 22
Slide 3: Gränges Group
Gränges Group • A global leader in the market for rolled products for aluminium heat exchangers • Production in Sweden, China and in the US • R&D Centre in Sweden and China • Headquarter in Stockholm • Gränges is represented all over the world • ~1,500 employees • Listed on Nasdaq Stockholm • Net sa
Slide 4: Fourth quarter 2016 – Solid performance concluded a record year
Fourth quarter 2016 – Solid performance concluded a record year Successful integration of acquired US operations now completed Sales volume increased by 118% to 84.7 ktonnes – organic growth 12% Adjusted operating profit increased to SEK 171 million – SEK 133 million excluding the acquisition
Slide 5: Market growth of 1% expected for full year 2017
Market growth of 1% expected for full year 2017 Light vehicle production growth (YoY) Region Q4 2016 Q1 2017 outlook FY 2017 outlook Asia +7% +1% +1% Europe +2% +5% +2% Americas +2% +2% -1% Global +6% +3% +1% Source: IHS Automotive, December 16, 2016 5
Slide 6: Strong development in Asia and continued strong growth in Americas
Strong development in Asia and continued strong growth in Americas – both organic and through acquisition Gränges sales volume (ktonnes) Asia Europe Americas +716% +18% -1% 48.8 20.8 20.4 19.0 20.7 17.5 15.4 16.6 16.9 28.9 15.0 15.2 6.0 7.8 9.2 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2015 2016
Slide 7: Important steps taken in 2016 to deliver on the 2020 goal and strategy
Important steps taken in 2016 to deliver on the 2020 goal and strategy – focus on growth and innovation Gränges 2020 goal and strategy Grow significantly above the market rate Become the market leader in all geographical regions Maintain good and sustainable profitability Increase efficiency G
Slide 8: Successful acquisition in the US creates a good platform for future growth
Successful acquisition in the US creates a good platform for future growth Gränges acquired Noranda’s rolling business in August 2016 Strong position within strategic HVAC market and other niche markets Integration of acquired business successfully completed Gränges appreciated as new owner
Slide 9: Diversification of business portfolio strengthens Gränges' position
Diversification of business portfolio strengthens Gränges’ position in the market for rolled aluminium Sales volume per end-use Pro forma Gränges incl. acquired sales market 2015 volume per end-use market 2016 Other 5% HVAC 3% Other 27% Automotive HEX Automotive 48% HEX 92% HVAC 25% Total sales volu
Slide 10: Strong performance against targets in 2016 while completing a major acquisition
Strong performance against targets in 2016 while completing a major acquisition in the US Growth1 ROCE Net debt over EBITDA Dividend2 +7.6% 17.5% 2.1 SEK 2.40 36% of Net Profit Target: Target: Target: Target: above market 15–20% 1–2 30–50% of net profit 1. Organic sales volume growth in 2016 excludi
Slide 11: Positive trend continues in fourth quarter and is further strengthened by the US acquisition
Positive trend continues in fourth quarter and is further strengthened by the US acquisition Rolling 12 months sales volume and adjusted operating profit Adjusted operating profit (SEK million) 300 800 687 632 Sales volume (ktonnes) 250 563 600 521 528 541 541 494 463 437 444 401 200 362 374 348 372
Slide 12: Strong performance in seasonally weak fourth quarter
Strong performance in seasonally weak fourth quarter Financial overview SEK million Q4 January - December 2016 2015 Change 2016 2015 Change Sales volume (ktonnes) 84.7 38.9 117.6% 239.1 163.9 45.9% Net sales 2,546 1,252 103.4% 7,207 5,494 31.2% Adjusted operating profit1 171 116 47.6% 687 541 27.0%
Slide 13: Net debt was SEK 2.7 billion at the end of fourth quarter
Net debt was SEK 2.7 billion at the end of fourth quarter Change in net debt -2 000 2.2 Cash flow before financing SEK 104 million 2.1 -2 200 Net debt position (SEK million) -2 400 -2 600 -66 -30 -89 21 -2 -2 722 -2 800 -2 823 267 -3 000 Net debt Adjusted Change in Other Investments Acquisitions & F
Slide 14: Strong and stable performance in acquired business
Strong and stable performance in acquired business Gränges Americas key financials Performance in 2016 2016 2015 Change – Above market volume growth ktonnes – Continued strong earnings Sales volume 180 172 4.9% and cash generation USD million Net sales 508 551 -7.9% Expectations for 2017 Adjuste
Slide 15: Outlook
Outlook Global Light Vehicle Production is expected to grow by 3%1 in Q1 2017 – for the full year 2017 a growth of 1% is projected Automotive HEX - above market growth is expected in Asia and Americas, while growth in line with the market is projected in Europe in Q1 Acquired business - sales
Slide 16: Summary of fourth quarter
Summary of fourth quarter Solid performance concluded a record year for Gränges Successful integration of US operations completed Sales volume 84.7 ktonnes Adjusted operating profit rose to SEK 171 million Net debt of 2.1x EBITDA Dividend of SEK 2.40 /share 16
Slide 17: Q&A
Q&A Johan Menckel, CEO Oskar Hellström, CFO
Slide 18: Appendix: Sales volume 2015-2016
Appendix: Sales volume 2015-2016 Sales volume ktonnes 2015 2016 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Existing business 42.7 43.4 38.9 38.9 163.9 45.1 46.5 41.1 43.7 176.4 Acquired business 42.3 46.1 45.9 37.8 172.1 45.3 47.0 47.21 41.0 180.5 Combined business 85.0 89.5 84.8 76.7 336.1 90.4 93.5 88.3 84.7 3
Slide 19: GRANGES
GRANGES