Slide 1: Third Quarter 2014 Earnings Conference
Third Quarter 2014 Earnings Conference November 13, 2014
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 Car and truck industry 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 36% Tokyo 15% Seoul Pune Sao Paolo Sales and Technical support Sales destinations Percentage of sales volume 2013 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 customised products with high technology content Strategy ‒ High level of product
Slide 6: Third quarter - Stable volume and earnings development
Third quarter - Stable volume and earnings development Stable quarter with sales volume at level with previous year Adjusted operating profit increase by 8% to SEK 106 million Adjusted operating margin of 8.8% (8.9) Earnings per share was SEK 0.73 (0.53) Net cash flow before financing activities of
Slide 7: Successful IPO of Gränges on October 10, 2014
Successful IPO of Gränges on October 10, 2014 Successful IPO on Nasdaq Stockholm in a volatile market Share priced at 42.50 SEK The offering comprised 69% of share capital in Gränges Orkla’s ownership decreased to 31% of capital and votes Considerable interest for Gränges among investors 7
Slide 8: Market conditions remain mixed across regions
Market conditions remain mixed across regions Light vehicle production growth (YoY) Region Q3 2014 Q4 2014 outlook FY 2014 outlook Asia +5% +2% +4% Europe -1% -1% +2% Americas +1% +2% +1% Global +3% +2% +3% Source: IHS Automotive, 16 October, 2014 8
Slide 9: Continued strong volume growth in Asia
Continued strong volume growth in Asia Gränges sales volume (ktonnes) Asia Europe Americas +8% -7% 21.1 18.0 19.4 19.1 17.7 15.0 14.5 16.0 15.0 14.0 -5% 6.5 5.1 6.0 5.7 6.2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2013 2014 2013 2014 2013 2014 Strong growth in sales to Lower sales of scrap based
Slide 10: Positive earnings trend continued in third quarter
Positive earnings trend continued in third quarter Rolling 12 months sales volume and adjusted operating profit 200 500 437 444 Adjusted operating profit (SEK million) 401 180 362 374 372 371 400 348 Sales volume ((ktonnes) 286 158 159 160 160 160 160 154 155 300 152 147 149 148 140 245 200 199 120
Slide 11: Stable volume and earnings development
Stable volume and earnings development Financial overview SEK million Q3 January - September 2014 2013 Change 2014 2013 Change Sales volume (ktonnes) 39.3 39.2 0.1% 122.3 121.0 1.1% Net sales 1 198 1 104 8.5% 3 531 3 577 -1.3% Adjusted operating profit1 106 98 7.7% 360 287 25.6% Adjusted operating m
Slide 12: New capital structure in preparation for IPO
New capital structure in preparation for IPO Change in net debt 1000 156 -90 -101 711 Net cash / debt position (SEK million) -9 33 -1 650 500 Net cash flow before financing SEK -45 million -951 0 -500 -1000 Net Adjusted Change in Other Invest- FX & Dividend Net cash EBITDA working operating ments ot
Slide 13: Working capital decreased by days year over year
Working capital decreased by 12 days year over year Average working capital days 150 -12 125 Average working capital (days) 114 107 101 102 99 97 95 94 100 93 93 90 84 86 75 50 25 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2011 2012 2013 2014 13
Slide 14: Financial targets and dividend policy
Financial targets and dividend policy Gränges aims to grow volumes sold at least in line with its existing Growth end markets over time Gränges aims to generate a 15 per cent to 20 percent return on ROCE average capital employed over time The Net Interest Bearing Debt should normally be in the range
Slide 15: Outlook
Outlook Some slowdown in global vehicle production in Q3, particularly in Europe – Trend expected to continue in Q4 2014 The global light vehicle production is forecasted to grow by 3% in full year 2014 and in 2015 Rising aluminium premiums will have some impact during 2015 provided the upswing cont
Slide 16: Summary of third quarter
Summary of third quarter Stable quarter with sales volume at level with previous year Some slowdown in our end market, particularly in Europe Adjusted operating profit increase by 8% to SEK 106 million A new credit facility in place after IPO Solid financial position 16
Slide 17: Q&A
Q&A Johan Menckel, CEO Oskar Hellström, CFO
Slide 18: Gränges