Slide 1: Fourth Quarter 2017 Earnings Conference
Fourth Quarter 2017 Earnings Conference 1 February, 2018
Slide 2: Today’s presenters
Today’s presenters JOHAN JOHAN MENCKEL DUFVENMARK CEO VP GROUP TREASURY Since: 2012 NIKLAS Gränges since: 2004 HERMANSSON VP GROUP BUSINESS CONTROL
Slide 3: Gränges Group
Gränges Group • Focused on rolled aluminium products for heat exchangers and selected niche applications • Production in Sweden, China and in the US • Research & Innovation centres in Sweden and China • Headquarter in Stockholm • Gränges is represented all over the world • ~1,600 employees • Listed
Slide 4: Fourth quarter 2017 – good development in all our markets
Fourth quarter 2017 – good development in all our markets ○ Higher sales and increased profits ○ Sales volume increased by 2.1% to 86.5 ktonnes ○ Adjusted operating profit increased to SEK 179 million ○ Cash flow before financing was SEK 41 million ○ Net debt of 1.8 x EBITDA ○ Dividend of 3.00 SEK p
Slide 5: Higher duties on imports from China to the United States
Higher duties on imports from China to the United States ○ In 2017, countervailing and anti- dumping duties were imposed on Chinese imports of aluminium foil products into the US ○ Increased demand for Gränges locally produced materials in US ○ Production of automotive HEX products for North America
Slide 6: Market growth of 2% expected for full year 2018
Market growth of 2% expected for full year 2018 Light vehicle production growth (YoY) Region Q4 2017 Q1 2018 outlook FY 2018 outlook Asia -1% -1% +1% Europe +8% +3% +2% Americas -1% +2% +4% Global +1% +1% +2% Source: IHS Automotive, December 15, 2017 6
Slide 7: Continued growth in Americas and Europe in fourth quarter
Continued growth in Americas and Europe in fourth quarter Gränges sales volume (ktonnes) Asia Europe Americas +4% +/-0% +1% 55,3 58,5 56,8 48,8 50,6 20,7 22,7 22,3 20,7 20,6 16,9 17,9 15,2 15,5 15,4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2016 2017 2016 2017 2016 2017 Meeting high comparables
Slide 8: Strong performance against targets in 2017
Strong performance against targets in 2017 Growth1 ROCE Net debt over EBITDA Dividend2 +4.6% 16.7% 1.8 SEK 3.00 35% of Net Profit Target: Target: Target: Target: above market 15–20% 1–2 30–50% of net profit 1. Organic sales volume growth in 2017 2. The Board of Director’s proposal for the 2018 Annua
Slide 9: Positive trend continued in fourth quarter and contributed to a new record year 2017
Positive trend continued in fourth quarter and contributed to a new record year 2017 Rolling 12 months sales volume and adjusted operating profit 400 925 933 1000 879 Adjusted operating profit (SEK million) 350 769 800 687 Sales volume (ktonnes) 300 632 528 541 541 563 600 494 521 250 437 444 463 40
Slide 10: Strong performance in seasonally weak fourth quarter
Strong performance in seasonally weak fourth quarter Financial overview SEK million Q4 January - December 2017 2016 Change 2017 2016 Change Sales volume (ktonnes) 86.5 84.7 2.1% 373.0 239.1 56.0% Net sales 2,734 2,546 7.4% 11,435 7,207 58.7% Adjusted operating profit1 179 171 4.8% 933 687 35.8% Adju
Slide 11: Net debt was SEK 2.3 billion at the end of fourth quarter
Net debt was SEK 2.3 billion at the end of fourth quarter Change in net debt -1 800 MSEK 1.7 1.8 Cash flow before financing SEK 41 million -1 900 -2 000 1 -7 -2 100 -2 200 -178 -38 -2 300 -2 280 262 -52 -2 292 -2 400 Net Debt Adjusted Change in Other Investments Acquisitions FX & Net Debt 30 Sep EBI
Slide 12: Outlook
Outlook ○ Global Light Vehicle Production is expected to increase 1% during first quarter – for the full year 2018 a growth of 2% is projected1 ○ Automotive HEX – higher sales volume is expected in Asia, while growth in Europe and the Americas is projected to be below the market rate in first quarte
Slide 13: Summary of fourth quarter
Summary of fourth quarter ○ Good development in all regions ○ Acquired business in the US is performing very well ○ Sales volume 86.5 ktonnes ○ Adjusted operating profit rose to SEK 179 million ○ Net debt of 1.8 x EBITDA ○ Dividend of 3.00 SEK per share 13
Slide 14: Q&A
Q&A Johan Menckel, CEO Johan Dufvenmark, VP Group Treasury Niklas Hermansson, VP Group Business Control
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