October December Peter Nilsson, President & CEO Ulf Berghult, Chief Financial Officer

Transcription

1 October December 206 Peter Nilsson, President & CEO Ulf Berghult, Chief Financial Officer

2 Highlights Business areas Financials Summary & Q 207 outlook Q&A

3 New platform - focus on profitable growth 206 highlights Organic Y/Y sales decline by 4 percent, mainly driven by expected lower project deliveries to the oil/gas segment Reported sales increase of 25 percent, mainly driven by the CGS acquisition Good market positions, cost control, F/X and contributing acquisitions improved the EBIT to the highest level for a fourth quarter to date Trelleborg s EBIT-margin at.3% impacted by integration of acquired businesses and exposure to depressed agriculture and oil/gas markets Strong operating cash flow, R2M cash conversion at 99 percent Two acquisitions adding annual sales of approx. SEK 690 M

4 Organic growth initiatives and acquisitions Recap of 206 events Acquisition of Schwab Vibration Control, a German and Swiss leading manufacturer of antivibration components and systems mainly for the rail market. The transaction was consolidated as of October, 206 Acquisition of subsidiary of CoorsTek, a U.S.-based subsidiary manufacturing precision seals mainly for the aerospace industry. The transaction was consolidated as of 2 November, 206 Launched Seals-Shop.com, an e-commerce platform focusing primarily on hydraulic seals for the MRO market and smaller OEM customers in Europe

5 Organic growth initiatives and acquisitions Post 206 events Agreement to acquire Carolina Seal, a U.S.-based distributer of polymer seals mainly to the transportation equipment market segment. The transaction is expected to be finalized in the first quarter of 207 Board decision of major investment in Trelleborg Wheel Systems tire operation in Serbia, to improve footprint and increase production capacity to accommodate additional future sales

6 New platform - focus on profitable growth Group financial highlights, 206 Net sales Sales: +25%; Organic: -4%; Structure: +26%; Currency 3% Earnings Highest EBIT to date Positive FX impact Integration of acquisitions Cash flow Strong operating cash flow R2M cash conversion at 99% Proposed DPS of SEK 4.25 SEK M Change, % Net sales Organic, % -4 0 Structural, % 26 2 Exchange rate, % 3 4 EBITA, excl. items affecting comparability EBITA-margin, % 2.3% 2.4% -0. p.p. EBIT, excl. items affecting comparability EBIT-margin, % p.p. Items affecting comparability Reported EBIT Operating cash flow Consists of restructuring charges of SEK -8 M (-90) 2 Continuing business

7 Highlights Business areas Financials Summary & Q 207 outlook Q&A

8 Ongoing measures brings higher earnings Trelleborg Coated Systems Organic sales: +5% Positive organic sales partly impacted by one-off project Coated fabrics growth in all regions but Asia Printing blankets growth on the back of good development in Asia SEK M Change, % Net sales Organic, % 5 0 Structural, % - 5 Exchange rate, % 6 6 EBIT EBIT, % p.p. EBIT higher as a result of higher sales and ongoing measures Note: Excl. items affecting comparability

9 Mixed market conditions Trelleborg Industrial Solutions Organic sales: 0% Mixed market segment sales development strong sales to LV Low activity in oil/gas actions ongoing to adjust cost base Both Europe and North America declined, while Asia improved SEK M Change, % Net sales Organic, % 0-9 Structural, % 3 - Exchange rate, % 2 3 EBIT EBIT, % p.p. Unfavorable sales mix impacted EBIT-margin Schwab acquisition finalized Note: Excl. items affecting comparability

10 Challenging market conditions Trelleborg Offshore & Construction Organic sales: -27% Market situation in offshore oil/gas remains challenging Mixed development in infrastructure projects EBIT-margin impacted by lower sales and adverse mix SEK M Change, % Net sales Organic, % Structural, % 3 4 Exchange rate, % 2 7 EBIT EBIT, % p.p. Expected FY7 organic sales drop of ~0-20% - as per earlier guidance Continued uncertainty ahead ongoing actions to adjust cost base Note: Excl. items affecting comparability

11 Back to organic growth Trelleborg Sealing Solutions Organic sales: +2% Mixed geographical and market segment development Moderate organic sales increase to general industry, automotive strong Solid development due to market positioning and operational control SEK M Change, % Net sales Organic, % 2-2 Structural, % 7 0 Exchange rate, % 4 5 EBIT EBIT, % p.p. Consolidation of new acquisitions weighs somewhat on margins Acquisition of CoorsTek subsidiary plus launch of Seals-Shop.com Note: Excl. items affecting comparability

12 Strong integration focus Trelleborg Wheel Systems Organic sales: 0%, but CGS boosting sales Agri OE sales decreased in Europe, but improved for us in N.A. and Asia Agri aftermarket sales increased marginally in all regions Industrial & construction tires slightly down; up in Europe but down in N.A. SEK M Change, % Net sales Organic, % 0-2 Structural, % 80 3 Exchange rate, % 5 4 EBIT EBIT, % p.p. EBIT impacted by seasonality, integration and inventory adjustments in line with customers Note: Excl. items affecting comparability

13 Inventory adjustments solid order book Rubena Savatech Reported separately during a transition period - operations will be integrated into existing business areas in 207 Sales solid in a seasonally weaker quarter project business muted SEK M 206 Net sales 447 EBIT 3 EBIT, % 7.0 Inventory adjustments alongside customers underabsorption of fixed costs EBIT temporarily impacted Ongoing investment projects to increase production capacity and prepare for integration into Industrial Solutions and Coated Systems Note: Excl. items affecting comparability

14 Highlights Business areas Financials Summary & Q 207 outlook Q&A

15 Sales growth driven by acquisitions Sales development % October - December [%] Organic -4 Structural 26 Currency 3 Total % January - December [%] Organic -5 Structural 5 Currency - Total 9 2M 5 2M

16 Structural and organic sales growth Target: 5-8% over a business cycle 25% 20% % % 0% 5% 0% -5% Q 4 Q2 4 Q3 4 4 Q 5 Q2 5 Q3 5 5 Q 6 Q2 6 Q3 6 6 Of which organic growth, %: Organic growth:

17 CGS consolidation boosts sales development Sales per business area October - December January - December SEK M Change % Organic % Change % Organic % Coated Systems Industrial Solutions Offshore & Construction Sealing Solutions Wheel Systems Rubena Savatech Other items Eliminations Continuing operations

18 Record sales through structural development SEK M Sales development, R2M SEK M Q 3 Q2 3 Q3 3 3 Q 4 Q2 4 Q3 4 4 Q 5 Q2 5 Q3 5 5 Q 6 Q2 6 Q Quarter (LHS) R2M (RHS)

19 Organic sales development by geography Picture distorted by project-related business Total Group Oct-Dec 6 Oct-Dec 5-4% 0% North America Share Oct-Dec 6 Oct-Dec 5 23% -4% -8% Western Europe Share Oct-Dec 6 Oct-Dec 5 47% -4% -2% Other Europe Share Oct-Dec 6 Oct-Dec 5 9% 0% 9% Asia & Other markets Share Oct-Dec 6 Oct-Dec 5 7% -2% % South and Other America Share Oct-Dec 6 Oct-Dec 5 4% -25% 7% Share = Actual

20 Organic sales development by geography Organic sales excl. project-related business Total Group Oct-Dec 6 Oct-Dec 5 2% -2% North America Share Oct-Dec 6 Oct-Dec 5 24% -6% -7% Western Europe Share Oct-Dec 6 Oct-Dec 5 49% 0% -2% Other Europe Share Oct-Dec 6 Oct-Dec 5 % 6% 9% Asia & Other markets Share Oct-Dec 6 Oct-Dec 5 4% 9% -2% South and Other America Share Oct-Dec 6 Oct-Dec 5 3% 23% % Share = Actual Project deliveries refer to the whole of Trelleborg Offshore & Construction and minor parts of Trelleborg Industrial Solutions operations

21 Record EBIT, despite mixed markets EBIT development EBIT EBIT-margin % 84.9% % Oct - Dec % % 2.9% Jan - Dec 2M 5 2M 6 2M 5 2M Excluding items affecting comparability

22 Record EBIT, despite mixed markets Group EBIT per business area October - December January - December SEK M Change % Change % Coated Systems Industrial Solutions Offshore & Construction Sealing Solutions Wheel Systems Rubena Savatech Other items Continuing operations Excluding items affecting comparability

23 Fifteen quarters of improved profits EBIT and margin, R2M MSEK % Q 3 Q2 3 Q3 3 3 Q 4 Q2 4 Q3 4 4 Q 5 Q2 5 Q3 5 5 Q 6 Q2 6 Q ROS % EBIT Excluding items affecting comparability

24 Total Group Profit & Loss statement October - December SEK M January - December Change % Change % EBIT, excl. items affecting comparability %.9% -0.6 p.p. EBIT-margin 2.9% 3.0% -0. p.p Items affecting comparability EBIT Financial income and expense Profit before tax Tax, Group total Net Profit, continuing operations Net Profit, discontinuing operations Net Profit, Total Group Refers to Vibracoustic

25 EPS increased by 9 percent, due to acquistions and restructuring measures Earnings per share fourth quarter % % % % Group, Total Continuing operations Continuing operations excl. items affecting comparability

26 Cash flow driven by higher earnings and WC improvements Operating cash flow EBITDA 2 Net capex Working capital Excluding items affecting comparability 2 Including other non cash flow affecting items

27 Improved cash conversion Operating cash flow, R2M MSEK % Q 3 Q2 3 Q3 3 3 Q 4 Q2 4 Q3 4 4 Q 5 Q2 5 Q3 5 5 Q 6 Q2 6 Q Cash conversion % Operating cash flow Excluding items affecting comparability

28 Recent acquisitions increase net debt Net debt development Total Group

29 Somewhat increased gearing level Net debt / EBITDA R2M and gearing development % X Net debt / Equity Net debt / EBITDA Total Group includes capital gain from Vibracoustic divestment

30 Total leverage reduced by Vibracoustic capital gain Net debt / EBITDA, R2M X +80% % Group, Total Continuing operations excl. items affecting comparability Proforma continuing operations, incl. items affecting comparability and acquisitions includes capital gain from Vibracoustic divestment 2 The proforma calculation is based on available information with a certain degree of uncertainty as regards to differences in accounting principles and methodology

31 ROE to improve once CGS is included for a full year Return On Equity, R2M 32 % Group, Total Continuing operations Continuing operations excl. items affecting comparability includes capital gain from Vibracoustic divestment

32 Financial guidelines for full-year 207 Capex: SEK ~,500-,700 M Restructuring costs: SEK ~ M Underlying tax rate: ~26% Amortization of intangible assets : SEK ~300 M Major part explained by purchase price allocation (PPA)

33 Highlights Business areas Financials Summary & Q 207 outlook Q&A

34 New platform - focus on profitable growth 206 highlights Organic Y/Y sales decline by 4 percent, mainly driven by expected lower project deliveries to the oil/gas segment Reported sales increase of 25 percent, mainly driven by the CGS acquisition Good market positions, cost control, F/X and contributing acquisitions improved the EBIT to the highest level for a fourth quarter to date Trelleborg s EBIT-margin at.3% impacted by integration of acquired businesses and exposure to depressed agriculture and oil/gas markets Strong operating cash flow, R2M cash conversion at 99 percent Two acquisitions adding annual sales of approx. SEK 690 M

35 Continued focus on growth and excellence 207 priorities Manage uncertain market conditions Continued focus on innovation, profitable growth, selected segments and geographies Manage margin development through operational excellence and improved customer integration Continued portfolio management to improve leading positions Integration of CGS and other recent acquisitions

36 Outlook Q 207 Demand is expected to be slightly improved compared with the fourth quarter of 206, adjusted for seasonal variations

37 Highlights Business areas Financials Summary & Q 207 outlook Q&A

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