Gunnebo Industries March 2018 Agenda Company overview Market - PowerPoint PPT Presentation

Gunnebo Industries March 2018

Agenda Company overview Market description Financials 2

Gunnebo Industries – Innovative and high quality lifting solutions At a glance Key financials  Gunnebo Industries is a manufacturer of high quality products, primarily used in MSEK 2014 2015 2016 2017 lifting systems Sales 997 909 796 862  The Gunnebo brand is synonymous with quality and innovation % growth 7% -9% -12% 8%  Gunnebo Industries designs and manufactures all parts of the lifting sling, EBITDA 127 102 96 95 creating system optimization which leads to operational efficiency, weight % margin 13% 11% 12% 11% saving and flexibility for customers EBITA 102 75 71 74  Gunnebo Industries has a leading position in markets where safety, quality and % margin 10% 8% 9% 9% operational efficiency is a key priority, with particular strongholds in Scandinavia, North America, Europe and Australia  For Gunnebo Industries’ clients the cost of lifting systems is low, whereas the damages and lost profit resulting from a failure in lifting systems can be Note: Figures represent Gunnebo Industries pro forma EBITA and EBITDA are excluding non recurring items detrimental Source: Company information  Primarily indirect sales through sling shops 1) to industries such as construction, industrials, oil & gas and mining  Sales breakdown (2017) Direct sales of selected products to e.g. mobile crane OEMs and oil & gas rig builders Customers by geography Customers by industry  Gunnebo Industries has outstanding customer relationships, many with a history spanning more than 40 years  Global footprint with own sales companies in 10 countries supported by distribution partners in more than 50 countries  Gunnebo Industries has some 500 FTEs  Headquartered in Västerås and majority owned by private equity fund Segulah Note 1): Sling shop definition: Value-add distributor/ assemblers Note: Customer by industry is an estimate of the customers end industry exposure; Source: Company information 3

Two product lines offering premium products with outstanding quality System design creates operational efficiency for the customers Blocks & Sheaves Components, Chain & Shackles 2017 Sales: MSEK 140 (16% of total sales) 2017 Sales: MSEK 722 (84% of total sales)  Gunnebo Industries produces world leading components, chain and shackles  Johnson is the brand of the product line for crane blocks, sheaves, snatch blocks and overhaul balls  Gunnebo Industries’ value proposition lies in its strength through innovation, with a brand that has been associated with quality since 1764  Johnson products are recognized by the North American rigging industry as a lifting equipment accessory of uncompromising quality  Gunnebo Industries ’ system is known for adding operational efficiency to the user through time and weight savings, flexibility and innovative solutions  With a 50-year track record, it is one of the leading brands in the North American lifting industry, primarily within mobile cranes and the O&G industry  Unique production process, manufacturing in accordance with major standards with most products proof loaded and marked for full traceability all the way  Mobile crane and energy industries are the main market drivers, with the back to the raw material medium and high end market estimated at ~BSEK 2  Exposure to broad range of industry segments such as manufacturing, construction, offshore, mining, aquaculture, fishing and transportation  Total market size estimated at ~ BSEK 14, of which the medium and high end market accounts for about 50% Source: Company information Source: Company information 4

Quality and innovation since 1764 1955 2012 1970s Manufacturing New strategy to of blocks started 2015 Developed the focus on lifting and 2005 in Tulsa, OK, unique ForgeFab related Traction 1764 2008 Q1’17 USA sheave process in Gunnebo Industrier applications, business unit Tulsa, OK, USA Gunnebo starts AB separated from Segulah new separation of other sold off as a Fastening and Gunnebo AB and manufacturing principal owner operations into step in the Telesteps 1950 of nails, bolts both companies after taking the distinct business direction of business units and belts for listed on the stock company private units with full P&L Manufacturing streamlining sold off in exchange ships through a buy-out accountability of shackles Gunnebo Q1-2017 Gunnebo started in Industries Q1-2017 Norway going forward 1764 2017 as a lifting and related 1952 1965 1975 2000 2008 2010 2015 applications UKN – Hook GrabiQ system – G-Coupler BK-Hook BKD MFH and the Arctic The ROV retrieve company grade 10 master link Shackle 1990s Johnson Quick Reeve Crane Blocks Source: Company information 5

Financial development Pro forma financials Manufacturing restructuring New production New strategy initiated site opened in MSEK Focus on lifting Växjö Closure of Downturn in key market s and related Ireland Operational and O&G, mobile cranes, mining applications subsidiary process improvements New growth strategy launched 13% 12% 11% 11% 10% 8% Note: Numbers represent Gunnebo Industries proforma. EBITDA before non-recurring items Source: Company information 6

Diversified customer base across industries, products and geographies With long-standing customer relationships Long standing customer relationships 2) (top 10 customers) A diversified customer base Top 10 customers Customer Tenure Customer 1 More than 40 years Customer 2 More than 40 years Customer 3 More than 15 years Customer 4 More than 15 years Customer 5 More than 20 years Customer split by geography Customer 6 More than 20 years Customer 7 More than 30 years Customer 8 More than 15 years Customer 9 More than 15 years Customer 10 More than 30 years Comments Customer split by industry 1)  Strong brand loyalty among sling shops, end users and OEMs  All top ten customers have been established customers for 15 years or more Note: Split based on 2017 revenue of MSEK 862. 1) Customer by industry is an estimate of the customers end industry exposure. 2) Customer tenure is used as proxy for brand loyalty Source: Company information 7

Global manufacturing capabilities, sales and distribution Lonevåg Gunnebo Växjö Processes: Forging, Processes: Chain Processes: Forging, machining, heat treatment, manufacturing, heat machining, heat treatment, assembly, testing, assembly, testing, painting treatment, testing, painting packaging, painting and and galvanising and packaging galvanising Main product: Chains Main product: Components Main products: Shackles R&D: Components and Tulsa Chains Processes: Forging, machining, heat treatment, assembly, testing, packaging and painting Main products: Blocks and Sheaves R&D: Blocks and Sheaves Note: Flags represent local sales offices, manufacturing sites pictured 8

World-class manufacturing process and production know-how Comments 1 2 3  Fully integrated manufacturing Forging Machining Heat treatment process with all critical processes in-house  Full traceability from finished product to raw material  100% of the products are proof loaded to 200-250% of the working load limit 6 5 4 Painting Testing Assembly Source: Company information 9

Gunnebo Industries’ success lies in its quality, technology and innovation Outstanding quality level 1  All relevant certification standards incl. DNV, ISO and NS9415,  Unique practice consisting of 100% testing and full traceability  Products are tested for 200-250% of rated capacity 2 World-class manufacturing process and production know-how  State-of-the-art production  Fully integrated production flow 3 Long heritage of innovation and technical expertise  Many of the products that are today’s industry standard have been developed by Gunnebo Industries, with innovation since 1764  System design creating operational efficiency through time and weight savings as well as increased flexibility  Design expertise and outstanding customer service Asian Hercules III  ~20 engineers in technical department Gunnebo Industries has equipped Asian Hercules III, one of the world’s largest heavy-lift sheerlegs  Promising product pipeline 4 Strong brand  High brand loyalty 1) with strong and long-standing relationships Heritage products Patented products New products Note: 1) Customer tenure is used as a proxy for brand loyalty Source: Company information 10

Agenda Company overview Market description Financials 11

Market leader in Scandinavia and top 3 globally Market shares Scandinavia Europe North America Australia & South America #1 Top 3 Top 3 Top 3 Components Components Components Crane blocks Components Top 3 #1 Top 3 #1 Top 3 Top 3 Top 3 Chains Chains Chains Sheaves Chains #2 #1 #2 #1 Top 3 Top 3 Top 3 Other Shackles Shackles Shackles Shackles Top 3 Top 3 #1 n.a Top 3 Top 6 Top 3 Source: Management estimates 12