Trelleborg Ab Class B · OMXSTO:TREL_B
Trelleborg Ab Class B — Q2 2020 Earnings Presentation
29 slides from Trelleborg Ab Class B's earnings presentation, July 2020
Slide 1: Q2 April-June 2020
Q2 April- June 2020 Peter Nilsson, President & CEO Ulf Berghult, CFO 1
Slide 2: Highlights, Business areas, Financials
Highlights Business areas Financials Summary & Q3 2020 outlook Q&A 2
Slide 3: Satisfactory quarter under the circumstances
Satisfactory quarter under the circumstances Q2 2020 financial summary ▪ Sales at SEK 7 689 M, a decrease of 18 percent ▪ Organic sales decreased by 19 percent ▪ EBIT at SEK 942 M, corresponding to a margin of 12.3 percent 1 ▪ Items affecting comparability at SEK -105 M related to restructuring ▪ Op
Slide 4: Expanded initiatives to address Covid-19
Expanded initiatives to address Covid-19 Targets the long-term efficiency of the organization ▪ Expanded restructuring to address Covid-19 effects ▪ FY 2020 restructuring costs at SEK 700 M - previously SEK 300 M ▪ Savings amount to approx. SEK 700 M on a FY basis, with full impact as of 2022 ▪ The
Slide 5: Organic sales development by geography
Organic sales development by geography 1 Core business Total Organic sales core business Apr-Jun 20 Apr-Jun 19 -20% 0% Western Europe North America Share Apr-Jun 20 Apr-Jun 19 Share Apr-Jun 20 Apr-Jun 19 47% -22% -2% 24% -24% 4% Other Europe Share Apr-Jun 20 Apr-Jun 19 9% -13% -3% Asia & Other marke
Slide 6: Highlights, Business areas, Financials
Highlights Business areas Financials Summary & Q3 2020 outlook Q&A 6
Slide 7: Temporary production shutdowns
Temporary production shutdowns 1 Trelleborg Industrial Solutions ▪ Organic sales: -20%; structural SEK M Q2 2020 Q2 2019 Change, % growth: 4% Net sales 2 309 2 740 -16 ▪ Negative impact from Covid-19 in Organic, % -20 7 most regions Structural, % 4 3 ▪ Organic sales negative in all regions, Exchange
Slide 8: Very challenging market conditions
Very challenging market conditions 1 Trelleborg Sealing Solutions ▪ Organic sales: -22%; structural SEK M Q2 2020 Q2 2019 Change, % growth: +2% Net sales 2 498 3 090 -19 ▪ Downward organic trend in all Organic, % -22 0 regions - more limited drop in Asia Structural, % 2 4 ▪ General industry, Automot
Slide 9: Tough markets and temporary shutdowns
Tough markets and temporary shutdowns 1 Trelleborg Wheel Systems ▪ Organic sales: -18%; structural SEK M Q2 2020 Q2 2019 Change, % growth: 0% Net sales 2 046 2 536 -19 ▪ Declining organic sales in both agri Organic, % -18 -5 and material handling & construction Structural,% 0 2 ▪ Agri aftermarket re
Slide 10: Improved profitability due to offshore oil & gas
Improved profitability due to offshore oil & gas 1 Businesses Under Development ▪ Organic sales: -10%; structural SEK M Q2 2020 Q2 2019 Change, % growth: -6% Net sales 888 1 086 -18 ▪ Strong sales and EBIT performance Organic, % -10 -2 in offshore oil & gas Structural, % -6 0 ▪ Lower deliveries of p
Slide 11: Highlights, Business areas, Financials
Highlights Business areas Financials Summary & Q3 2020 outlook Q&A 11
Slide 12: Sharp sales decline due to Covid-19
Sharp sales decline due to Covid-19 Sales development -18% 9 361 7 689 April - June [%] Organic -19 Structural 1 Currency 0 Total -18 Q2 19 Q2 20 -9% 18 740 January - June [%] 16 975 Organic -12 Structural 1 Currency 2 Total -9 6M 19 6M 20 12
Slide 13: Covid-19 broke a long positive sales trend
1 Covid-19 broke a long positive sales trend Target: 5-8% annual sales growth with constant currencies over a business cycle % 30% 23 20% 10% 5 7 6 4 3 4 3 3 2 4 0% -3 -10% -20% -18 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 17 17 17 18 18 18 18 19 19 19 19 20 20 Of which organic growth, %: 3 3 7 4 2 4
Slide 14: R12M sales development
R12M sales development Sales development, R12M SEK M SEK M 10 000 37 500 9 000 35 000 8 000 32 500 7 000 30 000 27 500 6 000 25 000 5 000 22 500 4 000 20 000 3 000 17 500 2 000 15 000 1 000 12 500 0 10 000 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 16 16 16 17 17 17 17 18 18 18 18 19 19 19 1
Slide 15: Sharp EBIT decline but margin held up well
Sharp EBIT decline but margin held up well 1 EBIT and margin development EBIT EBIT-margin -29% -1.8 1 321 14.1 12.3 942 Apr - Jun Q2 19 Q2 20 Q2 19 Q2 20 -17% -1.2 2 616 14.0 12.8 2 177 Jan - Jun 6M 19 6M 20 6M 19 6M 20 1Excluding items affecting comparability 15
Slide 16: Covid-19 impacting demand and EBIT
Covid-19 impacting demand and EBIT 1 EBIT and margin, R12M SEK M % 5 000 16 4 500 14 4 000 12 3 500 3 000 10 2 500 8 2 000 6 1 500 4 1 000 500 2 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19 20 20 ROS % EBIT 1Excluding items affecting comparabili
Slide 17: Total Group
Total Group Profit & loss statement SEK M Q2 2020 Q2 2019 Change, % 6M 2020 6M 2019 Change, % EBIT, excl. items affecting comparability 942 1 321 -29 2 177 2 616 -17 EBIT margin, % 12.3 14.1 -1.8 p.p. 12.8 14.0 -1.2 p.p. Items affecting comparability -105 -118 -151 -138 EBIT 837 1 203 -30 2 026 2 47
Slide 18: Sharp EPS decline due to Covid-19
Sharp EPS decline due to Covid-19 Earnings per share % -26% 3.5 -29% 3.36 2.98 3.0 2.47 2.5 2.11 2.0 1.5 1.0 0.5 0.0 Group, Total Group excl. items 1 affecting comparability Q2 19 Q2 20 1No dilution effects arose. 18
Slide 19: Solid working capital management
Solid working capital management 1 Operating cash flow 598 1 440 1 051 155 -5 -359 Q2 19 EBITDA Net capex Leasing Working capital Q2 20 1Excluding items affecting comparability 19
Slide 20: Strong cash generation and conversion
Strong cash generation and conversion 1 Operating cash flow, R12M SEK M 120% 5 500 120 5 000 99 102 96 97 95 100 4 500 89 90 88 82 90 83 76 82 4 000 74 80 70 69 3 500 3 000 60 2 500 40 2 000 1 500 20 1 000 0 500 0 -20 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 16 16 16 17 17 17 17 18 18 18 1
Slide 21: Gearing and leverage development
Gearing and leverage development1 R12M, total Group % X 2.5 55 2.5 2.4 51 51 50 2.1 44 45 2.0 45 42 41 2.0 1.8 1.8 40 37 37 35 1.6 35 1.5 1.5 1.5 30 25 1.0 20 15 10 0.5 5 0 0.0 12 13 14 15 16 17 18 19 20 12 13 14 15 16 17 18 19 20 Q2 Q2 Net debt / Equity Net debt / EBITDA 1From 2019 and forward gear
Slide 22: Limited underlying ROE decline
Limited underlying ROE decline Return on equity, R12M % 18 16 14 -1.2 12 -11.5 10.9 10.0 9.7 10 8 6 4 2 0 -2 -1.5 1 Group, Total Group excl. items affecting comparability Q2 19 Q2 20 1 2019 was impacted by impairment of capital employed in the reporting segment Businesses 22 Under Development
Slide 23: Financial guidelines for full-year 2020
Financial guidelines for full-year 2020 ▪ Capex: SEK ~1.2 Bn ▪ Restructuring costs: SEK ~700 M ▪ Underlying tax rate: ~25% ▪ Amortization of intangible assets ~400 M 23
Slide 24: Highlights, Business areas, Financials
Highlights Business areas Financials Summary & Q3 2020 outlook Q&A 24
Slide 25: Satisfactory quarter under the circumstances
Satisfactory quarter under the circumstances Q2 2020 financial summary ▪ Sales at SEK 7 689 M, a decrease of 18 percent ▪ Organic sales decreased by 19 percent ▪ EBIT at SEK 942 M, corresponding to a margin of 12.3 percent 1 ▪ Items affecting comparability at SEK -105 M related to restructuring ▪ Op
Slide 26: Strong focus on managing Covid-19 impact
Strong focus on managing Covid-19 impact 2020 priorities ▪ Manage market conditions in the wake of Covid-19 ▪ Strategic review of Businesses under development, including continuous evaluations of various structural alternatives ▪ Continued portfolio management to improve leading positions ▪ Continue
Slide 27: Outlook Q3 2020
Outlook Q3 2020 ▪ Demand is expected to be slightly better than in the second quarter of 2020, adjusted for seasonal variations. Uncertainty regarding demand for the coming quarters remains considerable. 27
Slide 28: Highlights, Business areas, Financials
Highlights Business areas Financials Summary & Q3 2020 outlook Q&A 28
Slide 29: Trelleborg
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