Second Quarter 2016 Earnings Conference 21 July, 2016
Today’s presenters JOHAN OSKAR MENCKEL HELLSTRÖM CEO CFO Since: 2012 Since: 2011 Gränges since: 2004 2 2
Gränges is the global leader with a market share of 20% SHANGHAI, CHINA FINSPÅNG, SWEDEN 46% Seoul 38% New York 16% Tokyo Pune Sao Paolo Sales and Technical support Sales destinations Percentage of sales volume FY 2015 3
Summary second quarter 2016 – Best quarter so far Sales volume increased by 7.0% Adjusted operating profit rose to SEK 179 million Higher sales volume and improved productivity contributed to higher adjusted operating profit Earnings per share of SEK 1.53 Cash flow before financing activities of SEK 157 million Strong financial position 4
Market growth of 3% expected for full year 2016 Light vehicle production growth (YoY) Region Q2 2016 H2 2016 outlook FY 2016 outlook +2% +4% +3% Asia +7% +2% +3% Europe 0% Americas +3% +1% +3% +3% +4% Global Source: IHS Automotive, June 15, 2016 5
Recovery in Asia and continued strong development in Europe and North America Gränges sales volume (ktonnes) Asia Europe Americas +4% +3% 20.8 20.4 19.6 +23% 16.9 17.6 17.5 16.4 16.6 15.4 14.9 9.2 7.8 7.4 6.5 6.0 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 2015 2016 2015 2016 2015 2016 Strong sales to Chinese and Continued growth for heat Higher contracted volumes Indian automotive customers exchanger materials with several customers Decreased sales of scrap based products 6
US acquisition still pending, approval expected late July Gränges in process to acquire Noranda’s downstream division Assets and business valued to USD 324.2 million on cash and debt free basis US bankruptcy court hearing to approve Gränges as buyer now scheduled for 28 July, 2016 Closing expected during third quarter 7
Positive trend continues in second quarter Rolling 12 months sales volume and adjusted operating profit 200 521 528 541 541 563 600 Adjusted operating profit (SEK million) 494 437 444 463 500 180 Sales volume (ktonnes) 160 160 160 160 161 163 163 164 166 169 401 362 374 372 371 400 348 158 159 160 155 152 154 147 149 148 300 286 140 245 200 199 120 100 100 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2016 Sales Volume Adjusted Operating Profit 8
Strong sales volume and earnings in the second quarter Financial overview SEK million Q2 January - June 2016 2015 Change 2016 2015 Change Sales volume (ktonnes) 46.5 43.4 7.0% 91.6 86.1 6.4% Net sales 1,442 1,506 -4.2% 2,802 2,962 -5.4% Adjusted operating profit 1 179 158 13.6% 335 313 7.0% Adjusted operating margin (%) 12.4 10.5 2.0 ppt 11.9 10.6 1.4 ppt Adjusted operating profit per tonne (kSEK) 3.9 3.6 0.2 3.7 3.6 0.0 Operating profit 154 158 -2.4% 309 313 -1.1% Profit for the period 114 115 -1.0% 208 226 -8.3% Earnings per share 2 (SEK) 1.53 1.54 -0.02 2.78 3.03 -0.25 Cash flow before financing activities 157 175 -10.2% 135 174 -22.3% Return on capital employed, R12 (%) 19.5 18.1 1.4 Net debt / adjusted EBITDA, R12 0.4 1.0 -0.6 1. Adjusted for items affecting comparability. 2. Basic, historical earnings per share has been calculated on the same number of shares as of today. 9
Net debt was SEK 335 million at the end of second quarter Change in net debt 0 Cash flow before financing SEK 157 million 0.4 0.4 Net debt position (SEK million) -100 26 -75 -21 -200 -300 -149 228 -316 -27 -335 -400 Net debt Adjusted Change in Other Investments & FY15 FX & Net debt Q1 2016 EBITDA working operating divestments dividend other Q2 2016 capital items of fixed assets Net debt over adjusted EBITDA (rolling 12 months) 10
Outlook Global Light Vehicle Production is expected to grow by 4% 1 in the second half of 2016 Gränges’ sales volume is expected to show a higher growth than the market - but not as high growth as in second quarter - during second half of 2016 Higher than market growth is expected in Europe and the Americas, while a growth in line with the market is anticipated in Asia For the full year 2016 Global Light Vehicle Production is expected to grow by 3% 1 with growth in all geographical regions Acquisition in the US in process - a major step towards our target for 2020 1 Source: HIS Automotive, June 15, 2016 11
Summary of second quarter Best quarter for Gränges so far Sales volume increased by 7.0% and reached new all-time-high at 46.5 ktonnes Adjusted operating profit rose to SEK 179 million Solid financial position US acquisition in process 12
Q&A Johan Menckel, CEO Oskar Hellström, CFO
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