Slide 1: Fourth Quarter 2014 Earnings Conference
Fourth Quarter 2014 Earnings Conference February 4, 2015
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 is a global aluminium company focused on rolled products for brazed heat exchangers
Gränges is a global aluminium company focused on rolled products for brazed heat exchangers Heat exchanger value chain Aluminium producers Material producers Heat exchanger producers Automotive and HVAC&R 3
Slide 4: Gränges is the global leader with a market share of 20%
Gränges is the global leader with a market share of 20% FINSPÅNG, SHANGHAI, SWEDEN CHINA 49% New York 37% Tokyo 14% Seoul Pune Sao Paolo Sales and Technical support Sales destinations Percentage of sales volume 2014 4
Slide 5: Gränges' vision and strategy
Gränges’ vision and strategy We help create smaller, lighter and more Vision designable heat exchangers to increase economic efficiency and reduce environmental impact Focus on our niche market and a global offering of customized products with high technology content Strategy ‒ High level of pro
Slide 6: Increased earnings and stable volume in fourth quarter
Increased earnings and stable volume in fourth quarter Flat sales volume, while vehicle production showed slight increase Adjusted operating profit increased by 22% to SEK 103 million Earnings per share of SEK 1.19 Net cash flow before financing activities of SEK 188 million Solid financia
Slide 7: A summary of 2014 - a good year with important work in progress
A summary of 2014 - a good year with important work in progress Continued to strengthen leading position – Secured new long-term contracts in Europe and China – Developed new innovative products Operating result continued to improve – FY 2014 adjusted operating profit the best so far Attracted
Slide 8: A summary of 2014 – upgrade in Shanghai plant finalized
A summary of 2014 – upgrade in Shanghai plant finalized Investment of SEK 50 million over 2 years Enable the production line in Shanghai to make larger coils Meet customer demands for larger coils to increase efficiency in production Improve logistics flow and productivity within the Gränges
Slide 9: Modest market growth expected for full-year 2015
Modest market growth expected for full-year 2015 Light vehicle production growth (YoY) Region Q4 2014 Q1 2015 outlook FY 2015 outlook Asia +1% +1% +4% Europe ±0% -2% ±0% Americas +1% +2% +2% Global +1% ±0% +2% Source: IHS Automotive, 16 January, 2014 9
Slide 10: Continued good volume growth in Asia
Continued good volume growth in Asia Gränges sales volume (ktonnes) Asia Europe Americas +5% -6% 21.1 18.0 19.4 19.1 18.8 14.5 16.0 15.0 14.0 13.6 +1% 5.1 6.0 5.7 6.2 5.2 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2013 2014 2013 2014 2013 2014 Continued good volume growth Lower sales of scrap
Slide 11: Positive earnings trend continued in fourth quarter
Positive earnings trend continued in fourth quarter Rolling 12 months sales volume and adjusted operating profit 200 463 500 437 444 Adjusted operating profit (SEK million) 401 180 362 374 372 371 400 348 Sales volume (ktonnes) 286 158 159 160 160 160 160 160 154 155 300 152 147 149 148 140 245 200
Slide 12: Increased earnings and stable volume
Increased earnings and stable volume Financial overview SEK million Q4 Full year 2014 2013 Change 2014 2013 Change Sales volume (ktonnes) 37.7 37.6 0.1% 160.0 158.6 0.9% Net sales 1 217 1 065 14.3% 4 748 4 642 2.3% Adjusted operating profit1 103 84 21.8% 463 371 24.8% Adjusted operating margin (%) 8
Slide 13: Net debt decreased after fourth quarter
Net debt decreased to SEK 765 million after fourth quarter Change in net debt -600 1.5 1.2 Net debt position (SEK million) Net cash flow before financing SEK 188 million -700 37 -39 33 -2 157 -765 -800 -900 -951 -1,000 Net Adjusted Change in Other Investments FX & other Net debt EBITDA working opera
Slide 14: Working capital decreased year over year
Working capital decreased by 4 days year over year Average working capital days 150 -4 Average working capital (days) 125 114 101 102 99 97 95 94 95 100 93 93 90 84 86 75 50 25 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2014 14
Slide 15: Financial targets and dividend policy – outcome 2014
Financial targets and dividend policy – outcome 2014 2014 Gränges aims to grow volumes sold at least in Growth line with its existing end markets over time Volume Growth 1% Gränges aims to generate a 15 percent to 20 ROCE Return on Capital percent return on average capital employed Employed over
Slide 16: Outlook
Outlook Our target is to further strengthening our position and continue to grow with good profitability The slower growth in our end markets seen in Q4 2014 is expected to continue in first half of 2015 For the full year 2015, the global light vehicle production is forecasted to grow by 2 per
Slide 17: Summary of fourth quarter
Summary of fourth quarter Flat sales volume Slowdown in our end market Adjusted operating profit increased by 22% to SEK 103 million Solid financial position Proposed dividend of SEK 1.50 per share Well positioned for further growth 17
Slide 18: Q&A
Q&A Johan Menckel, CEO Oskar Hellström, CFO
Slide 19: Gränges
GRANGES y 4