Trelleborg Ab Class B · OMXSTO:TREL_B

Trelleborg Ab Class B — Q1 2014 Earnings Presentation

42 slides from Trelleborg Ab Class B's earnings presentation, Apr 23, 2014

  1. Slide 1: January – March 2014

    January – March 2014 Peter Nilsson, President & CEO Ulf Berghult, CFO

  2. Slide 2: Agenda

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q2 2014 outlook Q&A 2 2014-04-23 TRELLEBORG GROUP

  3. Slide 3: Record profitability but moderate growth

    Record profitability but moderate growth Q1 2014 highlights  Organic sales increased by 2%  Mixed picture in terms of geographic markets and market segments growth  Good cost control, positive mix and better efficiency improved the results  Continued benefits from improved market positions  Tre

  4. Slide 4: Organic growth initiatives and acquisitions

    Organic growth initiatives and acquisitions Recap of Q1 2014 events  Acquisition of Pircher Alfred, an Italian industrial tire distributor  Acquisition of 51% of Max Seal, a North American pipe seal company  Expansion of Wheel Systems’ Chinese operations continues  New production line for Coated

  5. Slide 5: Solid start of the year

    Solid start of the year Group financial highlights Net sales SEK M Q1 2014 Q1 2013 Change, %  Organic sales up 2% Net sales 5 594 5 394 4  Mixed markets and segments Organic 2 -5 development Structural 1 4 Exchange rate 1 -5 Earnings Operating profit excl. items affecting comparability excl. 779 6

  6. Slide 6: Agenda

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q2 2014 outlook Q&A 6 2014-04-23 TRELLEBORG GROUP

  7. Slide 7: Margin comeback in challenging markets

    Margin comeback in challenging markets 1 Trelleborg Coated Systems  Organic sales: -3% SEK M Q1 2014 Q1 2013 Change, %  Mixed sales development Net sales 473 463 2 Organic, % -3 -6  Challenging markets in printing Structural, % 4 9 blankets in Europe; Asia good  Sales and profit impacted by Exch

  8. Slide 8: Sales and profitability edged upwards

    Sales and profitability edged upwards 1 Trelleborg Industrial Solutions  Organic sales: +1% SEK M Q1 2014 Q1 2013 Change, %  Mixed geographical and segment Net sales 1 181 1 142 3 sales development Organic, % 1 -5  Fewer project deliveries Structural, % 0 -  Improved cost efficiency Exchange rat

  9. Slide 9: Acquisition of Superlas Group

    Acquisition of Superlas Group Highly complementary in all aspects  Privately-owned Turkish company  Medium/low pressure industrial hoses for a wide range of industries  Turnover above SEK 400 M (2013)  EBIT-margin in line with business area level Sales split, 2013  Consolidates Trelleborg’s mar

  10. Slide 10: Market activity remains on a high level

    Market activity remains on a high level 1 Trelleborg Offshore & Construction  Organic sales: +3% SEK M Q1 2014 Q1 2013 Change, %  Activity remains high in most Net sales 859 856 0 market segments Organic, % 3 -5  Improved mix and better cost Structural, % -2 5 efficiency Exchange rate, % -1 -5 

  11. Slide 11: Strong quarter in terms of volume and profits

    Strong quarter in terms of volume and profits 1 Trelleborg Sealing Solutions  Organic sales: +8% SEK M Q1 2014 Q1 2013 Change, %  Most geographic markets reported Net sales 1 915 1 750 9 positive organic growth Organic, % 8 -7  Strong automotive segment sales Structural, % - -  Profit improved o

  12. Slide 12: Maintaining margins in weaker markets

    Maintaining margins in weaker markets 1 Trelleborg Wheel Systems  Organic sales: -2% SEK M Q1 2014 Q1 2013 Change, %  Agriculture tires slightly lower sales Net sales 1 126 1 109 2 Organic, % -2 -7  Weaker OE partly offset by better Structural, % 3 10 aftermarket sales in Europe  Still soft dema

  13. Slide 13: Agenda

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q2 2014 outlook Q&A 13 2014-04-23 TRELLEBORG GROUP

  14. Slide 14: Creating shareholder value

    Creating shareholder value Global leader in automotive antivibration solutions  Revenue and cost synergies  Sustainable growth above market development  Unrivalled global footprint - awards on back of global platform development  EBIT-margin that exceeds industry average  First operational year

  15. Slide 15: Continuous improvement in all dimensions

    Continuous improvement in all dimensions 1 TrelleborgVibracoustic  Organic sales: +9% EUR M Q1 2014 Q1 2013 Change, %  Favourable sales development in Net sales 447 424 5 most geographical markets Organic, % 9 1  Higher volumes and improved Structural, % 1 0 efficiency raise profitability Exchang

  16. Slide 16: Associated income bridge

    Associated income bridge TrelleborgVibracoustic SEK M Q1 2014 Q1 2013 Change, %  Associated income of SEK 133 M Operating profit excl. items affecting 342 238 44 comparability (after financial net and items Acquisition-related costs -2 -5 affecting comparability) Amortization of intangible assets1

  17. Slide 17: Agenda

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q2 2014 outlook Q&A 17 2014-04-23 TRELLEBORG GROUP

  18. Slide 18: Moderate growth topped by small acquisitions

    Moderate growth topped by small acquisitions First quarter sales development, SEK M +4% 5 394 5 594 Jan - Mar Organic 2% Jan – Mar Structural 1% Currency 1% Total 4% 2013 2014 18 2014-04-23 TRELLEBORG GROUP

  19. Slide 19: Organic growth target: ≥ 5% average

    Organic growth target: ≥ 5% average Organic sales development % 20% 18 15% 12 10% 8 6 5 5% 5% 2 2 2 0 0% -1 -2 -2 -5% -5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 11 11 11 11 12 12 12 12 13 13 13 13 14 19 2014-04-23 TRELLEBORG GROUP

  20. Slide 20: Mixed sales development

    Mixed sales development Sales per business area Jan - Mar SEK M 2014 2013 Change % Organic % Coated Systems 473 463 2 -3 Industrial Solutions 1 181 1 142 3 1 Offshore & Construction 859 856 0 3 Sealing Solutions 1 915 1 750 9 8 Wheel Systems 1 126 1 109 2 -2 Other items 141 187 Eliminations -101 -11

  21. Slide 21: Sales slightly up on previous year

    Sales slightly up on previous year Sales development, R12M SEK M SEK M 6 000 22 000 20 000 5 000 18 000 16 000 4 000 14 000 12 000 3 000 10 000 2 000 8 000 6 000 1 000 4 000 2 000 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 Quarter (LHS)

  22. Slide 22: Good growth in Asia and East Europe

    Good growth in Asia and East Europe Organic sales growth by geographic markets Western Europe Share Jan-Mar 13 Jan-Mar 14 North America 55% -4% -4% Share Jan-Mar 13 Jan-Mar 14 20% -11% 2% Other Europe Share Jan-Mar 13 Jan-Mar 14 6% 13% 21% Asia & Other markets Share Jan-Mar 13 Jan-Mar 14 16% -4% 18%

  23. Slide 23: Best operating margin so far

    Best operating margin so far 1 Operating profit development , SEK M Operating profit Operating margin +22% 2,1 Jan-Mar 779 13,9% 639 11,8% Actual 13 Actual 14 Actual 13 Actual 14 1 Excluding items affecting comparability and TrelleborgVibracoustic 23 2014-04-23 TRELLEBORG GROUP

  24. Slide 24: Improvement in all business areas

    Improvement in all business areas 1 Group operating profit per business area Jan - Mar SEK M 2014 2013 Change % Coated Systems 61 60 2 Industrial Solutions 117 102 15 Offshore & Construction 64 47 36 Sealing Solutions 436 352 24 Wheel Systems 148 144 3 Other items -47 -66 -29 Continuing operations 7

  25. Slide 25: All-time-high rolling 12-months margin

    All-time-high rolling 12-months margin 1 EBIT and margin, R12M SEK M % 3 000 14,0% 2 500 12,0% 10,0% 2 000 8,0% 1 500 6,0% 1 000 4,0% 500 2,0% 0 0,0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 ROS % R12M EBIT 1 Excluding items affecting comp

  26. Slide 26: Total Group - including discontinued business

    Total Group - including discontinued business Profit & Loss statement Jan - Mar SEK M 2014 2013 Change % Operating Profit, excluding e.o. items & assoc. income 779 639 22% Operating Margin, excluding e.o. items & assoc. income 13.9% 11.8% 2.1 pp Restructuring costs -18 -37 One-off items - - Total it

  27. Slide 27: TrelleborgVibracoustic

    TrelleborgVibracoustic Impact on Trelleborg’s accounts Jan - Mar Jan - Mar SEK M 2014 2013 Operating profit excl. items affecting comparability, MEUR 39 28 Operating profit excl. items affecting comparability 342 238 Acquisition related costs -2 -5 Amortization intangible assets -14 -10 Restructurin

  28. Slide 28: Underlying EPS increased by 23 percent

    Underlying EPS increased by 23 percent Earnings per share – first quarter 2014 +27% +27% +23% % 2,5 2,34 2,29 2,29 2013 Q1 2,0 1,90 2014 Q1 1,81 1,81 1,5 1,0 0,5 0,0 Group, Total Continuing operations Continuing operations excl items affecting comparability 28 2014-04-23 TRELLEBORG GROUP

  29. Slide 29: Well-managed working capital

    Well-managed working capital 1 Operating cash flow bridge , SEK M +366 221 367 135 10 1 Actual 13 Q1 EBITDA 2 Net capex Working capital Actual 14 Q1 1 Excluding items affecting comparability and TrelleborgVibracoustic. 29 2014-04-23 TRELLEBORG GROUP 2 Excluding other non cash flow affecting items.

  30. Slide 30: Solid cash conversion

    Solid cash conversion 1 Operating cash flow, R12M SEK M % 180 3 500 168 3 000 118 100 97 92 100 91 90 96 96 2 500 80 83 73 78 80 2 000 70 72 69 65 60 1 500 40 1 000 20 500 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 Cash conversion % Oper

  31. Slide 31: Solid capital structure

    Solid capital structure 1 Net debt development , SEK M 0% -5 360 -5 637 -5 649 -6 409 -6 425 -8 369 -12 706 2008 2009 2010 2011 2012 2013 2014 Q1 1 Total Group 31 2014-04-23 TRELLEBORG GROUP

  32. Slide 32: Solid capital structure

    Solid capital structure 1 Net debt / EBITDA and net gearing development % X 6,9 140 7 124 120 6 100 5 4,3 80 4 68 60 53 -5% 3 0% 48 38 38 2,1 40 36 2 1,8 1,7 1,7 1,4 20 1 0 0 08 09 10 11 12 13 14 Q1 08 09 10 11 12 13 14 Q1 Net gearing Net debt / EBITDA 1 Total Group 32 2014-04-23 TRELLEBORG GROUP

  33. Slide 33: Underlying debt ratios continue to go down

    Underlying debt ratios continue to go down Net debt / EBITDA, R12M X +13% -12% -6% 1,8 1,7 1,7 1,7 1,6 1,6 1,5 1,5 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 Group, Total Continuing operations Continuing operations excl items affecting comparability 2013 Q1 2014 Q1 33 2014-04-23 TRELLEBORG GROUP

  34. Slide 34: Long-term ROE target of 15 percent

    Long-term ROE target of 15 percent Return on equity, R12M % 18 0,4 16 0,6 13,9% 14,3% 15,0% 14 0,5 11,7% 12,0% 12 11,2% 11,4% 10 8 6 4 2 0 Group, Total Continuing operations Continuing operations excl items affecting comparability Act 2013 R12 Q1 14 34 2014-04-23 TRELLEBORG GROUP

  35. Slide 35: Financial guidelines for full-year 2014

    Financial guidelines for full-year 2014 Trelleborg Group:  Restructuring costs: ~SEK 250 M  Capex: ~SEK 1,100-1,200 M (peak year)  Tax rate: ~28% TrelleborgVibracoustic (50% ownership):  Restructuring costs: ~EUR 20-30 M  Annual impact from purchase price allocation (PPA): ~EUR 6 M  Tax rate:

  36. Slide 36: Agenda

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q2 2014 outlook Q&A 36 2014-04-23 TRELLEBORG GROUP

  37. Slide 37: Record profitability but moderate growth

    Record profitability but moderate growth Q1 2014 highlights  Organic sales increased by 2%  Mixed picture in terms of geographic markets and market segments growth  Good cost control, positive mix and better efficiency improved the results  Continued benefits from improved market positions  Tre

  38. Slide 38: Continued focus on growth and excellence

    Continued focus on growth and excellence 2014 priorities  Manage uncertain market conditions  Continued focus on profitable growth, selected segments and geographies  Manage margin development through operational excellence  Continued portfolio management to improve leading positions  Trellebor

  39. Slide 39: Outlook Q2 2014

    Outlook Q2 2014  Demand in the second quarter is expected to be on par with the first quarter of 2014, adjusted for seasonal variations 39 2014-04-23 TRELLEBORG GROUP

  40. Slide 40: Agenda

    Highlights Business areas TrelleborgVibracoustic (50% ownership) Financials Summary & Q2 2014 outlook Q&A 40 2014-04-23 TRELLEBORG GROUP

  41. Slide 41: TRELLEBORG GROUP

    41 2014-04-23 TRELLEBORG GROUP

  42. Slide 42: Forward-looking statements

    Forward-looking statements This presentation contains forward-looking statements that are based on the current expectations of the management of Trelleborg. Although management believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that

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