Slide 1: Welcome to HEXPOL
Telephone presentation April 29, 2016, 13:00 CET Please call +46 8213 091 (international call) 020-213 091 (national call, Sweden) 08-213 091 (mobile call, Sweden) and enter meeting code 917 840 Welcome to HEXPOL Q1 2016 report update CEO Georg Brunstam CFO Karin Gunnarsson April 29, 2016, 13:00 CET
Slide 2: Agenda
Agenda • Introduction to HEXPOL • Q1 2016 – HEXPOL Group • Q1 2016 – Business areas • Q1 2016 – Summary • Q&A April 29, 2016 -2-
Slide 3: HEXPOL – Fast growing with strong margins
HEXPOL – Fast growing with strong margins HEXPOL is a world-leading polymers group with strong global positions in advanced Polymer Compounds (Compounding), Gaskets for plate heat exchangers (Gaskets) and Wheels made of plastic and rubber materials for forklift and castor wheel application (Wheels).
Slide 4: Our vision guides us
Our vision guides us HEXPOL’s vision is to be market leader, number one or two, in selected technological or geographical segments, to generate profit, growth and shareholder value. April 29, 2016 -4-
Slide 5: A well positioned Group
HEXPOL – A well positioned Group • Two business areas – HEXPOL Compounding – HEXPOL Engineered Products • Strong global market positions – Global leader for Rubber Compounding – Strong European position in Thermoplastic Elastomer Compounding (TPE) – Strong US position for reinforced Polypropylene Co
Slide 6: A well positioned Group
HEXPOL – A well positioned Group • True global footprint – 11 of 38 production units in growth markets • Historical strong sales growth and good profitability • Well invested and strong cash flow • Long industrial history with highly experienced and dedicated management and board • Acquisition orien
Slide 7: A well positioned Group with a stable organisation
HEXPOL – A well positioned Group with a stable organisation Two business areas – HEXPOL Compounding (92 % of sales) – HEXPOL Engineered Products (8 % of sales) April 29, 2016 -7-
Slide 8: A fast growing Group
HEXPOL – A fast growing Group Contribution to sales made by acquisitions in the past years (acquisition month in parenthesis) M SEK 12 000 RheTech (Jan 2015) 11 000 PPP (Dec 2014) 10 000 Vigar (Nov 2014) 9 000 Kardoes (Aug 2014) 8 000 Robbins (Nov 2012) 7 000 Müller Kunststoffe (Jan 2012) 6 000 EXCE
Slide 9: A fast growing Group
HEXPOL – A fast growing Group • Product Development – New segments (for example: flame retardant) – New products in existing segments (for example: weight saving) – Application oriented • Increased market share • Acquisitions mainly within Polymer Compounding – Existing geographical markets (Kardoes
Slide 10: A fast growing Group
HEXPOL – A fast growing Group HEXPOL Compounding, value chain* (example): Raw material Manufacturer of Rubber and plastic manufacturers component OEMs End customers polymer compounds manufacturers -Rubber -Silicone -TPE -FKM -PP (reinforced) -PA Business model: The market: • “Glocal” (local producti
Slide 11: A well positioned Group
HEXPOL – A well positioned Group Fragmented market in polymer compounding with few global competitors Examples of polymer compounders: – AirBoss - Teknor Apex – Kraiburg - Multibase – Dynamix - GLS – Preferred Rubber - SOFTER – PTE - Alpha Gary – Unica - PolyOne – SPC - Washington Penn – Kardoes - A
Slide 12: A well positioned Group
HEXPOL – A well positioned Group Main customer segments: • Strong automotive industry • Growth to automotive industries but today lower share of total Group sales thanks to strong growth in other segments • Automotive sales around 40% 2015 • Engineering and general industry • Construction and infras
Slide 13: A well positioned Group with favorable sales distribution
HEXPOL – A well positioned Group with favorable sales distribution Sales per geographic area Jan-Mar 2016 Europe 28% NAFTA 67% Asia 5% April 29, 2016 - 13 -
Slide 14: Fast growing Group with strong margin development
HEXPOL – Fast growing Group with strong margin development M SEK % 12 000 20,0 Sales OM 10 000 16,0 8 000 12,0 6 000 11 229 11 035 8,0 4 000 8 007 8 036 8 919 7 197 4,0 2 000 3 798 3 190 2 608 0 0,0 2008 2009* 2010* 2011 2012 2013 2014 2015 Apr 15 - Mar 16 *Adjusted for items affecting comparability
Slide 15: Acquisitions oriented – Major acquisitions within Polymer Compounding
Acquisitions oriented – Major acquisitions within Polymer Compounding • Elasto (April, 2010) – TPE Compounding - Units in UK and Sweden • Excel Polymers (Nov, 2010) – Rubber Compounding - Units in U.S., Mexico, UK and China • Müller Kunststoffe (Jan, 2012) – TPE Compounding - Units in Germany • Robb
Slide 16: HEXPOL acquired RheTech in 2015
HEXPOL acquired RheTech in 2015 • RheTech Thermoplastic Compounding have four facilities (including manufacturing and laboratories) located in Whitmore Lake, MI (RheTech), Fowlerville, MI (RheTech), Sandusky, OH (RheTech Color) and in Blacksburg, SC (RheTech Engineered Plastics) • Turnover of 114 MU
Slide 17: Depreciations/amortizations & Investments
HEXPOL Group Depreciations/amortizations & Investments MSEK 250 200 150 100 50 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Apr 15 - Mar 16 Depreciation/amortisation Investments • Investments in line with depreciations/amortizations • Mainly capacity investments in Mexico and within TPE Compoundin
Slide 18: Q1 2016 – Positive volume development and continued strong result
Q1 2016 – Positive volume development and continued strong result • Another strong quarter with improved margins • Again positive volume development • Sales negatively affected by considerably lower sales prices due to considerably lower raw material prices 2016 2015 2015 MSEK Q1 Q1 Q4 Net Sales 2,7
Slide 19: Q1 2016 – Positive volume development and continued strong result
Q1 2016 – Positive volume development and continued strong result - Sales negatively affected by considerably lower sales prices due to considerably lower raw material prices. Prices on main raw materials were also below fourth quarter 2015. • Sales amounted to 2,757 MSEK (2,951) - Again positive vo
Slide 20: Q1 2016 – Positive volume development and continued strong result
Q1 2016 – Positive volume development and continued strong result - Strong result and improved margins - Sales negatively affected by considerably lower sales prices due to considerably lower raw material prices. Prices on main raw materials were also below fourth quarter 2015. • Net sales amounted
Slide 21: Q1 2016 – Positive volume development and continued strong result
Q1 2016 – Positive volume development and continued strong result - Strong balance sheet, well equipped for further expansion 2016 2015 2015 MSEK Q1 Q1 Q4 Net Sales 2,757 2,951 2,596 Operating Profit, EBIT 497 495 456 Operating Margin, % 18.0 16.8 17.6 Profit after tax 355 352 326 Earnings per share
Slide 22: Q1 2016 – Positive volume development and continued strong result
Q1 2016 – Positive volume development and continued strong result - Sales negatively affected by considerably lower sales prices due to considerably lower raw material prices. Prices on main raw materials were also below fourth quarter 2015. MSEK 2016 2015 Growth Sales 2 757 2 951 -6,6% Currency -18
Slide 23: Q1 2016 – Business areas
Q1 2016 – Business areas Positive volume development and continued strong result Net Sales Operating Profit Operating Margin, % 2016 2015 2015 2016 2015 2015 2016 2015 2015 MSEK Q1 Q1 Q4 Q1 Q1 Q4 Q1 Q1 Q4 HEXPOL 2 550 2 744 2 393 473 473 428 18.5 17.2 17.9 Compounding HEXPOL Engineered 207 207 203 2
Slide 24: Q1 2016 – HEXPOL Compounding
Q1 2016 – HEXPOL Compounding Positive volume development and continued strong result • Sales amounted to 2,550 MSEK (2,744) – Sales negatively affected by considerably lower sales prices due to considerably lower raw material prices. Prices on main raw materials were also below fourth quarter 2015.
Slide 25: Q1 2016 – HEXPOL Compounding
Q1 2016 – HEXPOL Compounding Positive volume development and continued strong result - Sales negatively affected by considerably lower sales prices due to considerably lower raw material prices. Prices on main raw materials were also below fourth quarter 2015. • NAFTA – again positive volume develop
Slide 26: Q1 2016 – HEXPOL Engineered Products
Q1 2016 – HEXPOL Engineered Products - Improved profit and positive volume development • Net sales amounted to 207 MSEK (207) – Sales somewhat lower for HEXPOL Gaskets – Sales increased for HEXPOL Wheels in all geographical regions, good development in US – Positive development in China for both HEX
Slide 27: Q1 2016 – Positive volume development and continued strong result
Q1 2016 – Positive volume development and continued strong result - Sales negatively affected by considerably lower sales prices due to considerably lower raw material prices. Prices on main raw materials were also below fourth quarter 2015. - Continued price pressure on all markets - Strong balance
Slide 28: Q1 2016 – Positive volume development and continued strong result
Q1 2016 – Positive volume development and continued strong result - Sales negatively affected by considerably lower sales prices due to considerably lower raw material prices. Prices on main raw materials were also below fourth quarter 2015. • Again positive volume development in a challenging marke
Slide 29: Q & A
& A @ HEXPOL April 29, 2016 A Material Differenc: e -29-