Concluding. remarks 15:30 12:45. Business Area. Priorities. Lunch. Berghult 12:00. Strategic Update

Transcription

1 Concluding remarks 15:30 12:45 Business Area Priorities Berghult Lunch 12:00 Strategic Update 1

2 Trelleborg Group financial update Financial overview CGS synergies Financial targets 2

3 Trelleborg Group financial update Financial overview CGS synergies Financial targets 3

4 Trelleborg Group financial update R12M Q1 2018, SEK M 31,860 Sales 4,228 EBIT 13.3% ROS HQ Trelleborg, Sweden ~23,000 employees All-time-high EBIT 20 consecutive quarters of improved R12M EBIT Leverage back to pre-cgs acquisition levels Increasing dividend since

5 Trelleborg Group sales split R12M Q Trelleborg Wheel Systems 28% Trelleborg Coated Systems 11% Business areas Trelleborg Industrial Solutions 22% South and Central America 4% Asia and RoW 16% Geography Western Europe 47% Trelleborg Sealing Solutions 31% Trelleborg Offshore & Construction 8% North America 22% Rest of Europe 11% 5

6 Strong sales growth boosted by M&A Reported sales growth, % YoY 1 35% 33 30% 25% 20% % 10% 5% 0% % -2-3 Q Q Q Q Q Q Q Q Q Q Q Q Q Continuing operations, organic and structural sales growth in constant currency

7 Organic sales increasing Reported organic sales growth, % YoY Q Q Q Q Q Q Q Q Q Q Q Q Q Organic growth, R12 Organic growth 7 1 Continuing operations, organic sales growth in constant currency

8 Improving geographical balance Sales split per geography 1 % Western Europe Rest of Europe North America South & Central America Asia & Other Markets 2010 R12M Q Continuing operations, based on invoicing address

9 Solid cash conversion despite higher capex Operating cash flow and cash conversion 1 OCF, MSEK Cash Conversion, % R12M Q Operating Cash Flow Cash conversion, % 9 1 Continuing operations, excl. items affecting comparability

10 Capital expenditure reflects growth ambitions Net capex vs. depreciation and sales 1 Capex / Depr., % Capex / Sales, % Normalized capex SEK ~ B Current year: SEK B with several important investments R12M Q Net capex / Depreciation (LHS) Net capex / Sales (RHS) 10 1 Continuing operations

11 Value creation for our shareholders Earnings per share 1 SEK / Share % R12M Q Continuing operations, excl. items affecting comparability

12 Value creation for our shareholders Dividend per share 1 SEK / Share % Continuing operations, excl. items affecting comparability

13 Steady gearing and leverage Net debt / EBITDA R12M and gearing development 1 Acquisition of % X Q1 Net debt / Equity Net debt / EBITDA Q Total Group includes capital gain from Vibracoustic divestment

14 Leverage back to normal after CGS transaction Net debt / EBITDA, R12M 2.5 X % Group, Total 1 Continuing operations excl. items affecting comparability Q1 16 Q1 17 Q includes capital gain from Vibracoustic divestment

15 Trelleborg Group financial update Financial overview CGS synergies Financial targets 15

16 CGS synergies according to plan SEK M SEK ~300 M relating to Wheel Systems - Cost synergies SEK ~200 M - Sales synergies SEK ~100 M (EBIT impact) SEK ~100 M relating to Industrial Solutions and Coated Systems Cost synergies SEK ~100 M - Sales synergies limited

17 Factors impacting synergy phasing Demand stronger than anticipated Focus on satisfying customer demands Slight delay in implementation of structural changes Original synergy estimate for 2020 remains 17

18 Trelleborg Group financial update Financial overview CGS synergies Financial targets 18

19 Financial targets unchanged Sales growth: 5-8% - Continuing operations - Organic growth > underlying market growth - Underlying market growth = Global Industrial Production (weighted in accordance with our geographical sales split) - Over a business cycle EBIT-margin: 15% - Continuing operations - Excluding items affecting comparability - Over a business cycle Return on equity: 12% - Continuing operations - Including items affecting comparability - Over a business cycle 19

20 Sales growth Sales growth target: 5-8% 20% 15% 10% 5% 0% % -30% R12M Q Sales growth 20

21 EBIT-margin development EBIT-margin target: 15% 1 EBIT, SEK M EBIT-m R12M Q EBIT EBIT-margin 21 1 Excluding items affecting comparability

22 Contributors to Group EBIT-margin improvement 2010 R12M Q % Group 2010A TCS TIS TOC TSS TWS Other Group R12M Q Note: Excluding items affecting comparability

23 EBIT-margin aspirations EBIT-margin 25 % Trelleborg Coated Systems Trelleborg Industrial Solutions Trelleborg Offshore & Construction Trelleborg Sealing Solutions Trelleborg Wheel Systems Group R12M Q Aspiration 23

24 ROE target ROE target: 12% 1 Profit from divestment increased equity base 15% 12% 9% 6% 3% % R12M Q Continuing operations

25 Long-term financial guidelines Dividend: 30-50% The dividend should amount to between 30 and 50 percent of net profit for the year. The dividend is adjusted to the Group s earnings level, financial position and future development potential. Capex: ~4-5% in relation to sales Net debt/equity: % 25

26 Financial guidelines 2018 Capex: SEK 1,800 2,000 M Restructuring charges: SEK ~250 M Underlying tax rate: ~26% Amortization of intangible assets 1 : SEK ~300 M 26 1 Major part explained by purchase price allocation (PPA)

27 Take-aways Leveraging improved structure Financial targets remain Development towards financial targets Leverage back to pre-cgs levels 27

28 28 June, 2018

29 Back at 12:45 29 June, 2018