Alleima Ab · OMXSTO:ALLEI
Alleima Ab — Q3 2023 Earnings Presentation
28 slides from Alleima Ab's earnings presentation, Oct 24, 2023
Slide 1: Third quarter 2023 Interim report
Alleima 1 October 24, 2023 Interim report Third quarter 2023
Slide 2: Safety first
Alleima Third quarter 2023 2 Safety first At Alleima our objective is zero harm to our people, Protective equipment Emergency number Psychological safety the environment we work in, our customers and our suppliers. First aid kit Emergency exit Alarm Assembly point Health & well-being Speak Up
Slide 3: Göran Björkman, President & CEO
Alleima Third quarter 2023 3 Göran Björkman President & CEO
Slide 4: Q3 highlights
Alleima Third quarter 2023 4 Q3 highlights Growth and a continued solid order backlog ― Organic order intake growth of 16% in the quarter ― Solid backlog provides confidence for near-time deliveries ― Revenues increased by 5% organically, driven by growth in Tube and Kanthal Significant earnings gro
Slide 5: Leading sustainability
Alleima Third quarter 2023 5 Leading sustainability Making an impact through our operations ― Focus on improving safety performance ― Share of recycled steel remains high ― Continued reduction of CO₂ emissions ― Increased share of female managers No. of Frequency Thousand Thousand Thousand No. of in
Slide 6: Towards a more sustainable offering
Alleima Third quarter 2023 6 Towards a more sustainable offering Making an impact through our products ―Example orders in the quarter ―Industrial heating solutions for customer product applications such as solar ―Electric process gas heaters for the upstream steel industry to reduce carbon emissions
Slide 7: Investment in Zhenjiang, China
Alleima Third quarter 2023 7 Investment in Zhenjiang, China Gearing up to meet increased demand in Chemical and Petrochemical ― New facility for applications tubing to Chemical and Petrochemical ― Capabilities to produce hydrogen tubes ― Investment of SEK 250 million over three years ― Operations to
Slide 8: Market development
Alleima Third quarter 2023 8 Market development ― Continued mixed market development ― Soft demand in the short-cycle business ― Solid demand in most other segments ― Order intake grew in all regions Perceived year on year underlying market demand trend
Slide 9: Order intake and revenues
Alleima Third quarter 2023 9 Order intake and revenues Order intake Order intake and revenues ― Flat organic order intake growth for Reported (SEK M) rolling 12 months 4,595 SEK M 7 000 % 140 ― Organic order intake growth of 16% in Q3 6 000 120 ― Organic revenue growth of 5% in Q3 5 000 100 Revenues
Slide 10: Order intake and revenue growth
Alleima Third quarter 2023 10 Order intake and revenue growth Order intake Revenues % SEK M % SEK M 80 25 000 80 25 000 60 60 20 000 20 000 40 40 15 000 15 000 20 20 10 000 10 000 0 0 5 000 5 000 -20 -20 -40 0 -40 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 11: Earnings
Alleima Third quarter 2023 11 Earnings Adjusted EBIT, % Adjusted EBIT at SEK 350 million (195) SEK M % 80% ― Margin 7.6% (4.6) 700 12 ― Higher revenues ― Positive product mix 600 10 ― Price increases 500 8 Reported EBIT at SEK 206 million (-26) 400 6 ― Margin of 4.5% (-0.6) 300 ― Metal price effects
Slide 12: Tube
Alleima Third quarter 2023 12 SEK M Q3 2023 Q3 2022 Q1-Q3 2023 Q1-Q3 2022 Tube Order intake 3,316 2,552 12,282 11,840 Organic growth, % 26 -16 -2 27 Revenues 3,130 2,931 10,917 9,157 Backlog remained solid, organic order intake Organic growth, % 4 13 13 15 growth of 26% Adj. EBIT 199 145 1,060 855 M
Slide 13: Kanthal
Alleima Third quarter 2023 13 SEK M Q3 2023 Q3 2022 Q1-Q3 2023 Q1-Q3 2022 Kanthal Order intake 1,003 945 3,340 3,187 Organic growth, % 5 2 -1 4 Revenues 1,153 995 3,527 2,942 Organic growth, % 13 12 13 7 Growth from underlying tailwinds Adj. EBIT 214 115 637 419 Margin, % 18.6 11.6 18.1 14.2 ― Solid
Slide 14: Strip
Alleima Third quarter 2023 14 SEK M Q3 2023 Q3 2022 Q1-Q3 2023 Q1-Q3 2022 Strip Order intake 276 372 915 1,278 Organic growth, % -25 10 -30 7 Revenues 334 344 1,187 1,148 Organic growth, % -3 3 0 8 Soft market demand Adj. EBIT -4 10 80 126 Margin, % -1.3 3.0 6.7 10.9 ― Continued order intake decline
Slide 15: Olof Bengtsson, CFO
Alleima Third quarter 2023 15 Olof Bengtsson CFO
Slide 16: Financial summary
Alleima Third quarter 2023 16 Order SEK M intake Revenues Q3 2022 3,869 4,270 Financial summary Organic, % 16 5 Structure, % 1 1 SEK M Q3 2023 Q3 2022 Q1-Q3 2023 Q1-Q3 2022 Currency, % 3 3 Alloys, % -1 -1 Order intake 4,595 3,869 16,537 16,305 Total growth, % 19 8 Revenues 4,617 4,270 15,631 13,246
Slide 17: Bridge analysis, adjusted EBIT
Alleima Third quarter 2023 17 Leverage: +82% Bridge analysis, adjusted EBIT 77 ― Positive organic development driven by volume, price and mix -32 350 -3 ― Increased Adj. EBIT and margin ― FX had a negative impact of SEK 190 -32 million yoy 195 Adj EBIT Organic Currency Structure Adj EBIT Q3 2022 Q3
Slide 18: Capital efficiency
Alleima Third quarter 2023 18 Capital efficiency ― NWC amounted to SEK 7,108 million (7,091) ― Capital employed excl. cash decreased to SEK 15,610 ― Sequential NWC decrease million (16,409) ― NWC in relation to revenues up to 40.2% (40.2) ― ROCE excl. cash decreased to 12.5% (14.6) in the quarter Ne
Slide 19: Cash flow
Alleima Third quarter 2023 19 Cash flow ― Cash flow from operating activities amounted to SEK 949 million (-297) ― Free operating cash flow increased to SEK 812 million (-323) ― Strong earnings ― NWC decrease ― Capex on normalized level Free operating cash flow Free operating cash flow quarterly SEK
Slide 20: Capital structure
Alleima Third quarter 2023 20 Capital structure Net debt/ Equity ― Net cash position ― Net debt/equity ratio well below target ― Net pension liability decreased due to increased long term discount rates in Sweden ― Unutilized revolving credit facility of SEK 3 billion -0.02x Net Pension liabilities
Slide 21: Guidance ahead of the quarter and outcome
Alleima Third quarter 2023 21 Guidance ahead of the quarter and outcome Outcome Q3 2023 Guidance ahead of Q3 2023 Capex (Cash) SEK -187 million in Q3 Approximately SEK 800 million in FY 2023 Currency translation and SEK 44 million SEK 50 million in Q3 transaction effect Total currency effect SEK -32
Slide 22: Guidance Q4 2023 and FY 2023
Alleima Third quarter 2023 22 Guidance Q4 2023 and FY 2023 Capex (cash) ― Estimated to approximately SEK 800 million for FY 2023 Currency effects (transaction and translation) ― SEK 0 million on operating profit (EBIT) for Q4 2023, compared to the corresponding period last year Metal price effects ―
Slide 23: Outlook for the fourth quarter 2023
Alleima Third quarter 2023 23 Outlook for the fourth quarter 2023 ― Despite mixed demand in our markets during the quarter, underlying megatrends are expected to continue to mitigate the impact of uncertainties in the macroeconomic environment for the remainder of the year. ― With our solid backlog,
Slide 24: Summary
Alleima Third quarter 2023 24 Summary ―A strong quarter ―Continued revenue growth ―Solid backlog ―Momentum from underlying tailwinds ―Soft market conditions in some segments ―Significant earnings improvement ―Successful price execution ―Consistent strategy execution towards profitable growth
Slide 25: Capital Markets Day 2023
Alleima Third quarter 2023 25 Capital Markets Day 2023 ― November 14, in physical event in Stockholm and live-streamed online ― www.alleima.com/investors/capital-markets-day
Slide 26: Q&A
Alleima Third quarter 2023 26 Q&A
Slide 27: Thank you
Alleima Third quarter 2023 27 Thank you alleima.com
Slide 28: Disclaimer
Alleima Third quarter 2023 28 Disclaimer This presentation contains “forward-looking” statements that reflect the company’s current expectations. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expec