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Q1 REPORT, 2013TELEPHONE CONFERENCE 24 APRIL, 2013
JOHAN WESTMAN, PRESIDENT AND CEO
TO PARTICIPATE IN THE TELEPHONE CONFERENCE AT 14:30 CET, PLEASE CALL: SWEDEN +46 8 506 443 86, UK +44 207 153 9154, US +1 877 423 0830. CODE: 291050#.
AGENDA
1. Company presentation2. Market development3. Q1 report 20134. Going forward
FinnvedenBulten develops and manages industrial businesses, offering products, technical solutions and systems in metallic materials
Q1 REPORT | Company presentation
The Group
FinnvedenBulten is structured into two
divisions, both with strong positions in their respective
customer segments.
Division Bulten Division Finnveden Metal Structures
SALES DISTRIBUTION Q1, 2013 SALES PER CUSTOMER SEGMENT Q1, 2013SAMPLE OF CUSTOMERS
Bulten Finnveden Metal Structures
• Deliveries to LV (Light Vehicles) amounted to 74 percent and HCV (Heavy Commercial Vehicles) to 26 percent, including Tier 1, of Groups sales Q1, 2013.
42%
58% 42%
34%
18%6%
LV HCV Tier 1 Industrial
66%17%
17%
3
FinnvedenBulten’s strategy is to continue the development of Bulten and Finnveden Metal Structures to realise the full potential in both divisions
BULTEN’S STRATEGY
Organic growth
– Short term in Europe– Long term follow key customers into
emerging markets such as China, Russia, Brazil and India
Preferred full service provider, covering everything from development, production and logistics to final delivery to the customer’s production line
Competitive cost structure and geographic proximity
Innovative and technologically advanced products
FINNVEDEN METAL STRUCTURES’ STRATEGY
Organic growth
– Capture business opportunities linked to weight reduction
– Strengthen position within light metals and multi‐material solutions
– Continued cost and capital rationalization– Invest in new, strategic, production capacity
Geographical and industry expansion
– Follow key customers into emerging markets– Grow and develop the industry segment in e.g.
renewable energy, food processing industry, furniture and agricultural products
Growth through acquisitions
Q1 REPORT | Strategy4
2. MARKET DEVELOPMENT
Market development
IHS Automotive reports for automotive production in Western Europe, 2013:– Production of LV in 2013 down by 5.2% compared to 2012 (March)– Production of HCV (>15 t) in 2013 down by 5.2% compared to 2012 (January)– For FBAB’s mix, an upward adjustment of 0.3% points from last quarter
FinnvedenBulten Q1 2013:– Continued high uncertainty among customers – Production disturbances/stop at a major customer impacted until end of March– Order intake has increased considerably
IHS Automotive forecast for production in Western Europe 2014 points at LV being up by 2.7% and HCV up by 31.5% compared to 2013– Corresponding to a 9.9% improvement for the FinnvedenBulten mix
*FinnvedenBulten’s deliveries at present:• LV stands for ~75% of sales• HCV stands ~25% of sales
Q1 REPORT | Market development6
Q1 REPORT | IHS Automotive LV production7
PRODUCTION GROWTH RATE (YEAR ON YEAR) LIGHT VEHICLES WESTERN EUROPE (at different forecast times)
-5,2%
2,3%2,7%
-7,8%‐10%
‐8%
‐6%
‐4%
‐2%
0%
2%
4%
6%
8%
2012E 2013E 2014E 2015E
May June July Sept October November December January March
IHS Automotive has increased its outlook slightly for LV in 2013, latest forecast is at ‐5.2% compared to 2012
Source: IHS Automotive March, 2013
Q1 REPORT | IHS Automotive HCV production
Source: IHS Automotive March, 2013 (latest available forecast is from January)
8
PRODUCTION GROWTH RATE (YEAR ON YEAR) HEAVY COMMERCIAL VEHICLES (>15t) WESTERN EUROPE (at different forecast times)
In 2013, IHS Automotive expects reduction in production of HCV by 5.2% compared to 2012, but with significant upturn in 2014
-9,9%
-5,2%
31,5%
10,9%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
2012E 2013E 2014E 2015E
April June August September October January
3. Q1 REPORT 2013
FINANCIAL SUMMARY (MSEK)
Q112 months
Rolling Full year
2013 2012 ∆Apr 2012‐Mar 2013 2012 ∆
Net sales 709.4 807.1 ‐12.1% 2,865.8 2,963.5 ‐3.3%
Gross profit 109.7 132.9 ‐23.2 423.4 446.6 ‐112,3
Earnings before depreciation (EBITDA) 38.6 59.0 ‐20.4 159.4 179.8 ‐20.4
Operating earnings (EBIT) 19.5 40.2 ‐20.7 82.6 103.3 ‐20.7
Operating margin, % 2.7 5.0 ‐2.3 2.9 3.5 ‐0.6
Earnings after tax 5.9 29.9 ‐24.0 19.5 43.5 ‐24.0
Order bookings 812.5 864.7 ‐6.0% 2,780.7 2,832.9 ‐1.8%
Return on capital employed, % ‐ ‐ ‐ 6.2 8.2 ‐2.0
Group summaryFIRST QUARTER
Net sales down 12.1%, down 10,0% adjusted for currency effects
Operating margin 2.7%
Profit after tax SEK 5.9 million
Earnings per share 0.28 SEK
Q1 REPORT | Group summary10
COMMENTS
Lowered sales due to over all weaker automotive market with lowered production among several customers
– Signs of stabilization. Improved sequential order intake
EBIT margin effected by lower volumes and continued underperforming profitability in the Swedish foundry operation
– Production disturbances/stop at a major customer had a negative impact on volumes and earnings until end of March
Growth initiatives in Russia and China are proceeding according to plan
Sequential growth in order intake
Q1 REPORT | Sequential growth in order intake11
0
100
200
300
400
500
600
700
800
900
1000
0
200
400
600
800
1 000
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
2011 2012 2013
MS
EK
Net sales Order intake
Division Bulten
Net sales of SEK 421 million in Q1– down 11.4% (down 8.3% adjusted for currency effects) compared to Q1 2012
Operating earnings Q1 amounted to 20.3 SEK million– Operating margin of 4.8%– Low volumes compared to same quarter last year – Stopped production at one major customer’s production facility until end of March – Efficiency measures are ongoing (headcount and capital efficiency)
Stable underlying business and well positioned with new and existing FSP contracts ‐ in line with division strategy
Order intake recovered, in line with Q1, 2012
The new growth initiative in Russia is proceeding according to plan
Q1 REPORT | Division Bulten12
FINANCIAL SUMMARY (MSEK)
Q1 12 months rolling Full year
2013 2012 ∆ Apr 2012‐Mar 2013 2012 ∆
Net sales 420.5 474.6 ‐11.4% 1,656.4 1,710.5 ‐3.2%
Earnings before depreciation (EBITDA) 31.4 38.6 ‐7.2 115.9 123.1 ‐7.2
Operating earnings (EBIT) 20.3 28.4 ‐8.1 73.4 81.5 ‐8.1
Operating margin, % 4.8 6.0 ‐1.2 4.4 4.8 ‐0.4
Order bookings 478.2 479.1 ‐0.1% 1,669.3 1,670.2 ‐0.1%
58%
BULTEN'S PROPORTION OF GROUP SALES
Finnveden MetalStructures
Bulten
12
FINANCIAL SUMMARY (MSEK) Q1 12 months rolling Full year
2013 2012 ∆ Apr 12‐Mar 13 2012 ∆
Net sales 290.4 335.1 ‐13.3% 1,216.7 1,261.4 ‐3.5%
Earnings before depreciation (EBITDA) 7.5 23.2 ‐15.7 49,1 64.8 ‐15.7
Operating earnings (EBIT) ‐0.5 14.6 ‐15.1 15.0 30.1 ‐15.1
Operating margin, % ‐0.2 4.4 ‐4.6 1.2 2.4 ‐1.2
Order bookings 336.1 388.1 ‐13.4% 1,118.1 1,170.1 ‐4.4%
Division Finnveden Metal Structures
Net sales of SEK 290 million in Q1– Down 13.3 % (down 12.7% adjusted for currency effects) compared to Q1 2012
Operating earnings amounted to SEK ‐1 million– Operating margin ‐0.2%– Low volumes compared to Q1 2012, continued challenges within the Swedish foundry – Stopped production at one major customer’s production facility until end of March– Efficiency measures are ongoing
Restructuring of the foundry operation, with increased production in Poland, on plan. Further measures needed to secure sustainable profitability in the total foundry operation
The growth initiative in China is proceeding according to plan
Q1 REPORT | Division Finnveden Metal Structures13
42%
FINNVEDEN METAL STRUCTURES' PROPORTION OF GROUP SALES
Finnveden Metal Structures
Bulten
Improved footprint with new establishments in Russia & China ‐ Strong growth opportunities and low‐cost production
Q1 REPORT | Improved footprint14
Head office
Production
Development
Sales/logistics
Assembly
Trading company
CHINA
RUSSIA
SWEDEN
POLAND
ROMANIA
GERMANY
BELGIUM
UK
USAFRANCE
New establishments
Cash flow statement and Balance sheet
Q1 REPORT | Cash flow statement and Balance sheet
Cash flow statement, MSEK JAN‐MAR FULL YEAR
2013 2012 2012
Cash flow from operating activities before changes in working capital 27.4 49.0 123.0
Cash flow from operating activities 53.8 50.1 72.4
Cash flow from investing activities ‐27.5 ‐22.9 ‐110.4
Cash flow from financing activities ‐3.9 ‐4.2 ‐10.2
Cash flow for the period 22.4 23.0 ‐48.2
Cash and cash equivalents at end of period 72.4 124.7 51.8
Balance sheet, MSEK 2013‐03‐31 2012‐03‐31 2012‐12‐31
ASSETSTotal fixed assets 708.0 702.8 705.0
Total current assets 1,194.4 1,267.2 1,145.0
Total assets 1,902.4 1,970.0 1,850.0
EQUITY AND LIABILITIES
Total equity 1,018.3 1,067.6 1,030.6
Total non‐current liabilities 274.8 246.2 272.4
Total current liabilities 609.3 656.2 547.0
Total equity and liabilities 1,902.4 1,970.0 1,850.0
MSEK 2013‐03‐31 2012‐03‐31 2012‐12‐31
Net debt, MSEK 227.4 135.6 246.1
15
Q1 REPORT | Key indicators
THE GROUP 2013‐03‐31 2012‐03‐31 2012‐12‐31
CAPITAL STRUCTURENet debt/equity ratio, times 0.2 0.1 0.2 Equity/assets ratio, % 53.5 54.2 55.7
Net debt/EBITDA 1.4 0.5 1.4
Key indicators – Capital structure, Return indicators
ROLLING 12 MONTHS FULL YEAR
THE GROUP, 12 MONTHS Apr 2012‐Mar 2013
Apr 2011‐Mar 2012 2012
RETURN INDICATORS
Return on capital employed, % 6.2 14.6 8.1
Return on equity, % 1.9 12.2 4.1
CAPITAL STRUCTURE
Capital turnover, times 2.2 2.3 2.3
16
4. GOING FORWARD
Outlook for 2013
Market estimates:
IHS Automotive estimates for Western Europe automotive production show a volume reduction of 5.2% in 2013 compared to 2012 for both LV and HCV production – a somewhat raised forecast compared to last quarter.
IHS Automotive indicates reaching the bottom in 2013 given the 2014 forecast:
– LV production Western Europe: +2,7%– HCV production Western Europe: +31,5%
Group preconditions and actions for 2013:
Still high customer uncertainty due to the macroeconomic situation
– Signs of stabilized demand, especially in the HCV‐segment, and improved order intake
Cost reductions in Q1 as well as flexibility and productivity improvements
– restructuring actions in Finnveden Metal Structure Swedish foundry operations
Establish operations in growth markets Russia and China, start‐up costs of SEK 10‐15 million
In a ruling dated 11 April 2013, the Stockholm administrative court of appeal repealed the Swedish Tax Agency’s review decision and allowed the deduction of interest on the shareholder’s loan in accordance with the submitted tax return
– It is expected that FinnvedenBulten will be awarded an additional SEK 197 million in loss deductions, which represents an additional deferred tax asset of around SEK 43 million
– This ruling does not yet have legal validity and is now being analysed by the management team together with tax experts
A good financial position enables continued execution of the set strategy with further expansion into growth markets and potential acquisitions
Q1 REPORT| Outlook for 201318
Financial objectives
TARGETSQ1
2013Actual
Q12012
Actual
FULL YEAR2012
Actual
Sales growth Target to achieve a profitable organic growth in excess of the market growth on the Company’s respective markets.
‐12.1% 1.4% ‐3.9%
EBIT margin Target to achieve an EBIT margin of at least 7 %. 2.7% 5.0% 3.5%
Return on capital employed (ROCE)
Target to achieve a ROCE exceeding 15 %. 8.2%
Dividend policy FinnvedenBulten has a target to pay dividends corresponding to approximately 1/3 of net income after tax. FinnvedenBulten's financial position, cash flow and future prospects should however be considered.
n.a. n.a 69%SEK 2.00
per share1
(1) Proposed by the board to the AGM. Adjusted for the one‐off effects due to the change in the tax rate in Sweden.
Q1 REPORT | Financial objectives19
THANK YOU FOR YOUR ATTENTION!
FinnvedenBulten develops and manages industrial businesses, offering products, technical solutions and systems in metallic materials. The Group operates as a business partner to international customers in the engineering industry, primarily the automotive industry. FinnvedenBulten is structured into two divisions – Finnveden Metal Structures and Bulten –both with strong positions in their respective customer segments. FinnvedenBulten is listed on NASDAQ OMX Stockholm.
www.finnvedenbulten.com
Q1 12 months rolling Full year
SEK MILLION 2013 2012 ∆ Apr 12‐Mar 13 2012 ∆
Net sales 709.4 807.1 ‐97.7 2,865.8 2,963.5 ‐97.7
Cost of goods sold ‐599.7 ‐674.2 74.5 ‐2,442.4 ‐2,516.9 74.5
Gross profit 109.7 132.9 ‐23.2 423.4 446.6 ‐23.2
Operating expenses net ‐90.2 ‐92.7 2.5 ‐340.8 ‐343.3 2.5
Operating earnings 1) 19.5 40.2 ‐20.7 82.6 103.3 ‐20.7
Financial expenses net ‐10.6 1,7 ‐12.3 ‐23.1 ‐10.8 ‐12.3
Earnings before tax 8.9 41.9 ‐33.0 59.5 92.5 ‐33.0
Tax on year’s earnings 2) ‐3.0 ‐12.0 9.0 ‐40.0 ‐49.0 ‐9.0
Earnings after tax 5.9 29.9 ‐24.0 19.5 43.5 ‐24.0
Income statement
Q1 REPORT | Income statement
21
Q1 12 months rolling Full year
THE GROUP 2013 2012 Apr 12‐Mar 13 2012
EARNINGS PER SHARE
Earnings per share, SEK 1) 0.28 1.42 0.93 2.07
Earnings per share, adjusted for one‐time effect of change in Swedish tax rate, SEK1) ‐ ‐ 2.98 2.98
Weighted outstanding ordinary shares, ’000 1) 21,040.2 21,040.2 21,040.2 21,040.2
Outstanding ordinary shares, closing day ’000 1) 21,040.2 21,040.2 21,040.2 21,040.2
(1) Both before and after dilution (2) Whereof SEK ‐19.1 million were one‐off effect on deffered taxes due to the changed tax rate in Sweden.
Earnings per share
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