Slide 1: First Quarter 2020 Earnings Conference
First Quarter 2020 Earnings Conference 30 April, 2020
Slide 2: Today's presenters
Today’s presenters JOHAN OSKAR MENCKEL HELLSTRÖM CEO CFO Since: 2012 Since: 2011 Gränges since: 2004 2
Slide 3: First quarter 2020: Successful US expansion balanced slowing demand
First quarter 2020 Successful US expansion balanced slowing demand ○ Very challenging market conditions – Automotive market demand negatively impacted by COVID-19 pandemic ○ Successful ramp-up of new US capacity ○ Stable sales volume and reduced operating profit – Sales volume declined by 1% – Adjus
Slide 4: Light vehicle production decreased by 23% while HVAC production increased by 5%
Light vehicle production decreased by 23% while HVAC production increased by 5% in the first quarter End market production growth (YoY) End market Automotive HVAC Region Global Asia Europe Americas Americas Q1 2020 -23% -30% -19% -11% +5% Q2 2020 -47% -30% -60% -72% - Full year 2020 -22% -19% -25% -
Slide 5: Successful ramp-up of new US capacity partly offset demand reduction in Asia and Europe
Successful ramp-up of new US capacity partly offset demand reduction in Asia and Europe Gränges sales volume (ktonnes) Asia Europe Americas Gränges Group -17% +9% -1% -17% 54.4 59.5 90.8 89.9 20.0 16.5 16.7 13.7 45.9 51.7 45.9 51.7 45.0 38.2 8.5 7.8 2019 2020 2019 2020 2019 2020 2019 2020 ○ Signific
Slide 6: Contingency plans activated to mitigate COVID-19 impact
Contingency plans have been activated to mitigate the impact on Gränges of the COVID-19 pandemic ○ Ensure health and safety of employees Continuity ○ Secure ability to operate production facilities ○ Secure supply of critical material ○ Control working capital Cash ○ Postpone capex ○ Ensure good liq
Slide 7: Temporary plant closures implemented to adjust production capacity and take out cost
Temporary plant closures have been implemented to adjust production capacity and take out cost Status – current operations Finspång Huntingdon Salisbury Shanghai Newport Americas Europe Asia ○ Salisbury plant temporary ○ Finspång plant reduced to ○ Shanghai plant temporary closed and employees 40% c
Slide 8: Ongoing expansion activities delayed or actively postponed
Ongoing expansion activities have been delayed or actively postponed Status – expansion initiatives Finspång Konin Newport Newport Finspång Konin ○ Upgrade of third and final ○ Site logistics improvement ○ Acquisition awaiting rolling mill put on hold project put on hold approval from competition au
Slide 9: Successful ramp-up of new capacity in Huntingdon
Successful ramp-up of new capacity in Huntingdon contributing to the best quarter so far in Americas ○ Huntingdon expansion project finalized in fourth quarter 2019 ○ Market share increase contracted as of January 2020 ○ Ramp-up of new capacity better than plan – currently at 90% Huntingdon ○ Increa
Slide 10: Stable sales volume and lower adjusted operating profit driven by product mix
Stable sales volume and lower adjusted operating profit driven by product mix in the first quarter Sales volume and adjusted operating profit Adjusted operating profit per tonne 500 1,250 4 Adjusted operating profit per tonne (kSEK) 1005 Adjusted operating profit (SEK million) 400 933 1,000 Sales vo
Slide 11: Financial overview – first quarter 2020
Financial overview – first quarter 2020 SEK million Q1 Rolling 12 months 2020 2019 Change Mar 2020 Dec 2019 Change Sales volume (ktonnes) 89.9 90.8 -1.1% 346.4 347.3 -0.3% Net sales 3,063 3,109 -1.5% 11,932 11,978 -0.4% Adjusted operating profit1 210 275 -23.6% 801 866 -7.5% Adjusted operating margi
Slide 12: Net debt amounted to SEK 3.6 billion on 31 March
The net debt amounted to SEK 3.6 billion on 31 March Change in net debt -2,000 2.6 Adjusted cash flow before financing 2.8 SEK 329 million -2,500 SEK million -3,000 -23 66 -58 -149 -3,500 -3,465 345 -275 -3,559 -4,000 Net debt Adjusted Change in Other Maintenance Expansion FX & Net debt 31 Dec EBITD
Slide 13: Outlook - second quarter 2020
Outlook - second quarter 2020 ○ The uncertainty around the COVID-19 pandemic makes reliable forecasting very difficult ○ IHS estimates that global light vehicle production will decrease by 47% in the second quarter ○ End-market mix change is expected to have a negative impact on profitability ○ Medi
Slide 14: Summary - first quarter 2020
Summary - first quarter 2020 ○ Very challenging market conditions ○ Successful ramp-up of new US capacity ○ Stable sales volume and reduced operating profit ○ Continued strong cash generation 14
Slide 15: Q&A
Q&A Johan Menckel, CEO Oskar Hellström, CFO
Slide 16: Slide 16