Trelleborg Ab Class B · OMXSTO:TREL_B

Trelleborg Ab Class B — Merger or Acquisition (November 2015)

29 slides from Trelleborg Ab Class B's merger presentation, Nov 9, 2015

  1. Slide 1: November 9, 2015

    November 9, 2015 1 2015-11-09 TRELLEBORG GROUP

  2. Slide 2: Cautionary note in relation to forward-looking statement

    Cautionary note in relation to forward- looking statement This presentation may contain forward-looking statements. These statements are not guarantees of future performance and are subject to inherent risks and uncertainties. Forward-looking statements may be identified by the fact that they do not

  3. Slide 3: Acquisition of ČGS

    Acquisition of ČGS A strategically attractive and value enhancing acquisition  Reinforcing Trelleborg as a world leader in engineered polymer solutions  Trelleborg Wheel Systems:  Doubling sales and creating a global leader in agricultural tires  Enhancing global leading position in industrial t

  4. Slide 4: Transaction summary

    Transaction summary  ČGS generated sales of SEK 5.6 bn and EBIT of SEK 0.9 bn (16% EBIT margin)1  Cost synergies estimated to exceed SEK 300 M on an annual basis  Cross-selling opportunities  Trelleborg has agreed to pay SEK 10.9 bn on a cash and debt-free basis  The transaction will be finance

  5. Slide 5: Introduction to ČGS

    Introduction to ČGS  Leading businesses in agricultural, ČGS geographical sales split (2014) industrial and specialty tires as well as other engineered polymer solutions Rest of  Strong mid-market tire brand (Mitas) Americas world supplemented by niche engineered 5% polymer businesses (Rubena and

  6. Slide 6: A portfolio of well performing businesses

    A portfolio of well performing businesses Total sales SEK ~5.6 bn SEK ~2.6 bn SEK ~1.2 bn SEK ~1.8 bn Agricultural and forestry tires Industrial and specialty tires Engineered polymer solutions Printing blankets Sealing profiles Seals Engineered fabrics Membranes Belting Specialty mouldings Wheel Co

  7. Slide 7: ČGS tire business

    1 ČGS tire business 2 ČGS engineered polymer solutions 3 Transaction effects 7 2015-11-09 TRELLEBORG GROUP

  8. Slide 8: ČGS strengthens current tire positions and adds new supplementing niches

    ČGS strengthens current tire positions and adds new supplementing niches Total sales SEK SEK SEK ~3.8 bn ~2.6 bn ~0.7 bn Industrial, Agricultural and construction and forestry multi-purpose Forklift and material Specialty handling SEK SEK ~0.2 bn ~0.3 bn 8 2015-11-09 TRELLEBORG GROUP Approximate sal

  9. Slide 9: Excellent strategic fit with highly complementary portfolio in agricultural tires

    Excellent strategic fit with highly complementary portfolio in agricultural tires Market positioning – agricultural tires1 Tier 1: Original equipment & aftermarket Tier 2: Original equipment & aftermarket Tier 3: Aftermarket 9 2015-11-09 TRELLEBORG GROUP 1) Including a selection of agricultural tire

  10. Slide 10: Well-invested and cost-efficient manufacturing

    Well-invested and cost-efficient manufacturing Supplementary footprint to Trelleborg Wheel Systems Manufacturing locations Mitas  Mitas manufacturing footprint in Trelleborg Wheel Systems Czech Republic, Serbia and U.S. 3  Access to large agricultural markets in Russia and Ukraine  Proximity to b

  11. Slide 11: Well positioned to benefit from U.S. radial tire growth and market recovery

    Well positioned to benefit from U.S. radial tire growth and market recovery Charles City Manufacturing locations Mitas Trelleborg Wheel Systems Spartanburg  Solid platform to significantly grow market position in North America  New Mitas production facility in Charles City, Iowa  New Trelleborg W

  12. Slide 12: Gaining access to attractive markets within industrial tires

    Gaining access to attractive markets within industrial tires Adding new capabilities through complementary positions Solid tires – focus on material handling, port Pneumatic tires – focus on industrial, handling and selected niches within construction construction and material handling 12 2015-11-09

  13. Slide 13: Global mega trends supporting agricultural and industrial tires businesses

    Global mega trends supporting agricultural and industrial tires businesses 13 2015-11-09 TRELLEBORG GROUP

  14. Slide 14: Long-term favorable agricultural fundamentals

    Long-term favorable agricultural fundamentals Currently a broad downturn in agricultural markets with Agricultural trends supporting demand going forward – a significant impact on demand for tires selected examples 750 Global wheat consumption (million tons)5 Tractor registration 2015E vs 2013 (%) 7

  15. Slide 15: CEMA Business Barometer – Signs of recovery & a positive outlook for 2016

    CEMA Business Barometer – “Signs of recovery & a positive outlook for 2016”1 European Agricultural Machinery 15 2015-11-09 TRELLEBORG GROUP 1) Source CEMA, European Agricultural Machinery Association, www.cema-agri.org

  16. Slide 16: Wheel Systems supported by mega trends - strong growth and margin track-record

    Wheel Systems supported by mega trends - strong growth and margin track-record Organic growth (%) Operating margin (%) – Trelleborg Wheel Systems 4.2 2.6 12.1 11.3 5.8 -7.0 Average Average 9M 2015 2004 2014 9M 2015 2004-2014 2004-2014 Trelleborg Trelleborg Trelleborg Wheel Group Wheel Systems System

  17. Slide 17: Creating market leading positions in agricultural and specialty tires

    Creating market leading positions in agricultural and specialty tires Trelleborg Wheel Mitas1 Combined1 Systems1 SEK ~3.8 bn SEK ~8.1 bn SEK ~4.3 bn Creating market leader in agricultural and industrial tires Increasing market presence in several geographies Step-change towards a strong position for

  18. Slide 18: ČGS engineered polymer solutions

    1 ČGS tire business 2 ČGS engineered polymer solutions 3 Transaction effects 18 2015-11-09 TRELLEBORG GROUP

  19. Slide 19: Efficient manufacturing footprint for engineered polymer solutions

    Efficient manufacturing footprint for engineered polymer solutions Manufacturing in Czech Republic, Slovenia and Mexico Engineered polymer solutions Manufacturing locations Engineered polymer solutions  Cost efficient production  Access to Central and Eastern European markets  Supplementary prese

  20. Slide 20: Enhancing Trelleborg's offering of engineered polymer solutions

    Enhancing Trelleborg’s offering of engineered polymer solutions Engineered polymer solutions  Broadened offering of Trelleborg’s under three brands existing engineered polymer business  Capitalize on Trelleborg’s global presence to further grow acquired businesses  Cost synergies and cross-sellin

  21. Slide 21: Complementary positions in engineered polymer solutions with a good strategic fit

    Complementary positions in engineered polymer solutions with a good strategic fit Printing blankets Sealing profiles Seals Engineered fabrics Membranes Belting Specialty mouldings Coated Sealing Industrial Systems Solutions Solutions 21 2015-11-09 TRELLEBORG GROUP 1) Preliminary split of business, t

  22. Slide 22: Transaction effects

    1 ČGS tire business 2 ČGS engineered polymer solutions 3 Transaction effects 22 2015-11-09 TRELLEBORG GROUP

  23. Slide 23: Attractive stand alone financial profile

    Attractive stand alone financial profile ČGS delivers strong financials, despite current agricultural market weakness1 Revenue (SEK bn) EBITDA (SEK bn, %) EBIT (SEK bn, %) 17% 20% 20% 13% 16% 16% 5.74 5.77 5.62 1.14 1.12 0.92 0.90 0.99 0.77 2013 2014 R12M 2013 2014 R12M 2013 2014 R12M June June June

  24. Slide 24: Significant synergies expected

    Significant synergies expected  Identified cost synergies in excess of SEK ~300 M annually, gradually realized over three years  Cross-selling opportunities  Combined platform allows for longer-term footprint optimization 24 2015-11-09 TRELLEBORG GROUP

  25. Slide 25: Substantially growing Trelleborg

    Substantially growing Trelleborg Trelleborg pro-forma financials R12M June 30, 2015 Revenue (SEK bn) EBIT (SEK bn) EPS (SEK/share) +23% +26% +23% 5.6 0.9 2.1 29.7 4.3 11.4 24.1 3.4 9.3 Trelleborg ČGS Pro-forma Trelleborg ČGS Pro-forma Trelleborg ČGS Pro-forma Illustrative pro-forma excluding synergi

  26. Slide 26: A well-balanced portfolio

    A well-balanced portfolio Trelleborg sales Preliminary pro-forma sales SEK ~24 bn1 SEK ~30 bn1 Coated Coated Wheel Systems Systems Systems 10% Wheel 18% Systems ~10-12% 27% Industrial Industrial Solutions 22% Solutions ~20-22% 33% ~12-14% Sealing 17% ~26-28% Solutions Offshore & Offshore & Construct

  27. Slide 27: Bank financing secured

    Bank financing secured Intention to deleverage to levels prior to transaction  Transaction financed through committed bank financing  Initial leverage slightly above 3x Net Debt/EBITDA on a pro-forma basis  Commitment to deleverage to levels prior to the acquisition within 12-18 months 27 2015-11

  28. Slide 28: A strategically attractive and value enhancing acquisition

    A strategically attractive and value enhancing acquisition Reinforcing Trelleborg as a world leader in engineered polymer solutions 1 Favorably performing businesses 2 Strategic fit with complementary product portfolio 3 Strong and supplementary positions in attractive markets 4 Well-invested and co

  29. Slide 29: TRELLEBORG

    WY TRELLEBORG

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