Hexpol Ab Class B · OMXSTO:HPOL_B
Hexpol Ab Class B — Shareholder Meeting (April 2019)
38 slides from Hexpol Ab Class B's shareholder meeting presentation, April 2019
Slide 1: Strong global positions in advanced polymer compounds
Strong global positions in advanced polymer compounds President and CEO Mikael Fryklund 1
Slide 2: HEXPOL 2018 – Another strong year
HEXPOL 2018 – Another strong year MSEK 2018 2017 Sales increase +13% Sales 13,770 12,230 Operating profit, EBIT 2,150 1,986 Operating margin, % 15.6 16.2 Best to date Earnings per share, SEK 4.78 4.44 Operating cash flow 2,019 2,001 Equity/assets ratio, % 59 68 Improved market positions Strong s
Slide 3: HEXPOL – Strong global market positions
HEXPOL – Strong global market positions Improved market positions in our main markets Strong sales development Positive volume development Two Compounding operations acquired and responsibly integrated during 2018 Adds a new growth area in Rubber Compounding – high performance elastomers
Slide 4: HEXPOL – Strong global market positions
HEXPOL – Strong global market positions World leading polymers group with strong global positions in advanced polymer compounds (Compounding) Global leading position for Rubber Compounding Strong position in High Performance NEW Elastomers European leader within TPE Compounding Strong US p
Slide 5: Our vision guides us
HEXPOL – Our vision guides us HEXPOL’s vision is to be a market leader, ranking number one or two in selected technological or geographical segments, in order to generate growth and shareholder value. HEXPOL’s business concept is to operate as a product and application specialist in a limited number
Slide 6: HEXPOL's growth strategy
HEXPOL’s growth strategy Our strategy which is based on a broad and in-depth expertise in polymers and applications is successful and stand firm. We combine our strong business concept that include strong cash flows with both organic and acquired growth. 6
Slide 7: Fast growing with cutting-edge expertise
HEXPOL – fast growing with cutting-edge expertise HEXPOL HEXPOL Compounding Engineered Products Manufacturers Manufacturers Raw material of rubber OEM End- of polymer manufacturer and plastic manufacturers customers compounds components • Rubber • Forklift wheels • TPE • Castor wheels • Silicone • G
Slide 8: Expertise and customer focus
HEXPOL – Expertise and customer focus ” We add value for our customers through cutting-edge expertise in polymer materials and solid knowledge of applications. Together with the best service in the market we strengthen our customer’s competitiveness in their markets”. 8
Slide 9: HEXPOL's growth strategy
HEXPOL’s growth strategy Product Development • New segments (for example: flame retardant) • New products in existing segments (for example: environmentally friendly) • Application oriented Increased market shares Acquisitions mainly within Polymer Compounding • Existing geographical markets (
Slide 10: Strong growth with strong margins
HEXPOL – Strong growth with strong margins • • • • • • • • • • • • • • • • 10
Slide 11: A well positioned Group
HEXPOL – A well positioned Group Strong global presence Historical strong sales growth and good profitability Well invested and strong cash flow Long industrial history with highly experienced and dedicated management groups and board Acquisition oriented – major acquisitions within Polyme
Slide 12: Kirkhill Rubber, California, US
Kirkhill Rubber, California, US Acquired September 2018 HEXPOL established a significant presence on the US west coast through the acquisition of Kirkhill State of the art facility in Long Beach, California, US Presence in the aerospace, automotive and medical technology equipment industries a
Slide 13: 80% of Mesgo Group
80% of Mesgo Group Acquired beginning of October 2018 Industry leader in high performance elastomers – fluorocarbons and silicone – for industry, consumer products, transportation and automotive Specialize also in conventional rubber compounds and thermoplastics State of the art facilities in
Slide 14: Example of Rubber Compounding applications
Example of Rubber Compounding applications 14
Slide 15: Example of TPE applications – Dryflex
Example of TPE applications – Dryflex 15
Slide 16: Example of TPE applications – Mediprene
Example of TPE applications – Mediprene 16
Slide 17: Example of Engineered Products applications
Example of Engineered Products applications 17
Slide 18: A well positioned Group
HEXPOL – A well positioned Group Stable organization – 4,600 employees in 14 countries Two business areas: • Hexpol Compounding – 93% of total sales • Hexpol Engineered Products – 7% of total sales 18
Slide 19: HEXPOL – global sales
HEXPOL – global sales Asia 5% Europe 35% Americas 60% 19
Slide 20: A well positioned Group
HEXPOL – A well positioned Group Main customer segments: Automotive industry • Sales around 36% 2018 Engineering and general industry Building & construction Transportation Consumer industries Energy, oil & gas sector Wire & cable industries Medical equipment industries Manufacture
Slide 21: Strong growth
HEXPOL – Strong growth Sales, MSEK +13% 16 000 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 21
Slide 22: Improved operating profit
HEXPOL – Improved operating profit Operating profit, MSEK Best operating profit to date, 2,150 MSEK. 2 400 2 200 2 000 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 22
Slide 23: Strong cash flow
HEXPOL – Strong cash flow Operating cash flow MSEK 2 400 2 200 2 000 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 23
Slide 24: Earnings per share
HEXPOL – Earnings per share Profit after tax and Earnings per share MSEK SEK 1 800 5,00 1 600 4,50 1 400 4,00 1 200 3,50 3,00 1 000 2,50 800 2,00 600 1,50 400 1,00 200 0,50 0 0,00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Profit after tax Earnings per share 24
Slide 25: Net cash, strong balance sheet
HEXPOL – Net cash, strong balance sheet MSEK 1 500 1 000 500 2009 2010 2011 2012 2013 2018 0 2014 2015 2016 2017 -500 -1 000 -1 500 -2 000 -2 500 25
Slide 26: Development of the market cap
Development of the market cap MSEK 32 000 31 357 30 238 29 033 28 620 28 000 25 368 24 111 24 000 20 000 16 591 16 000 11 823 12 000 8 000 6 953 4 076 4 000 2 297 457 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* * Per 23 April 2019 26
Slide 27: Dividend policy
HEXPOL – Dividend policy HEXPOL’s earnings development and the equity/assets ratio determine the size of the dividend. HEXPOL’s dividend policy is to distribute 25 to 50 percent of profit after tax for the year as a dividend to HEXPOL’s shareholders, provided that the company’s financial position is
Slide 28: Dividend
HEXPOL – Dividend Our strong operating cash flow leaves room for both continued acquisition oriented expansion as well as for a dividend of 2.25 SEK/share Raising the dividend with 15%. 28
Slide 29: Sustainable development – a prerequisite
Sustainable development – a prerequisite Sustainable development is included in our strategic work and is a prioritized area. Overall Group targets for: • Reduced energy use • Reduced emissions of gases that impact the climate • Reduced risks with chemicals • Introduction of environmental manage
Slide 30: Corporate responsibility
Corporate responsibility Materializing Our Values Supplier Sustanability Guidance Managing Our Values 30
Slide 31: Sustainability work is proceeding – UN's agenda 2030
Sustainability work is proceeding – UN’s agenda 2030 31
Slide 32: Sustainability work is proceeding – UN's agenda 2030
Sustainability work is proceeding – UN’s agenda 2030 32
Slide 33: Innovative solutions generating green growth
Innovative solutions generating green growth HexLite – enable the automotive industry to achieve reduced fuel consumption RheVision – renewable raw materials give considerably lower carbon footprint Dryflex Green – based on renewable raw materials Hex-Flame and DryflexFLAM – halogen-free fla
Slide 34: The way forward – priorities for HEXPOL 2019
The way forward – priorities for HEXPOL 2019 Continued focus on growth through marketing and development efforts Continued acquisition orientation and integration Utilize our strong platform for increased cross- selling and benchmarking between our units to improve efficiency Continue our pr
Slide 35: HEXPOL – Q1 2019
HEXPOL — Q1 2019 . @HEXPOL A Material Difference
Slide 36: Q1 2019 – Increased sales and higher operating profit
Q1 2019 – Increased sales and higher operating profit • Sales increased 15% • Stable volume development, incl. acquisitions • Operating profit increased 9% • Earnings per share increased 7% 2019 2018 2018 MSEK Q1 Q1 Q4 Sales 3 805 3 309 3 557 EBITA 607 547 533 +15% EBITA margin % 16,0 16,5 15,0 Oper
Slide 37: Q1 2019 – Increased sales and higher operating profit
Q1 2019 – Increased sales and higher operating profit Sales increased 15% to 3,805 MSEK (3,309) ‒ Stable volume development incl. acquisitions ‒ Acquisitions contributed with 380 MSEK ‒ Positive currency effects of 298 MSEK In Americas increased sales by 8% (lower in local currency) ‒ Lower sale
Slide 38: 2018 our best result to date, first quarter 2019
• 2018 OUR BEST RESULT TO DATE • FIRST QUARTER 2019 - Increased sales and improved result 38