A new strategy??? - Lindab AB...and make processes more efficient Initiatives for 2015: 16 lindab | we simplify construction 5-8% Annual growth based on organic growth and growth from

lindab | we simplify construction

A redefined direction for the future of Lindab


Same

BasicsNew

Focus


Lindab Simplified*

Simplifying is our passion. Ultimate comfort is our vision

In 1959 AB Lidhults Plåtindustri

was registered as a company.

Lindab is represented at 157

locations in 32 countries.

The majority of the Group’s

sales are made through its

126 branches.

At the end of Q3 2014 the

Group had 4,677 employees.

The Lindab brand is a

leading and well-known

brand throughout Europe.

Year1959 32 countries 126 branches 4,677employees

3% 46%

24%

27%

Nordic region

Western Europe

CEE/CIS

Other markets

Sales, markets*

Sales, operations*

16%

84%

Products and Solutions

Building Systems

*2013 figures

*2013 figures


Acquisitions

Novo Clima, Sweden: in-house production of chilled beams (ICS), improving delivery performance,

service and efficiency

Klimasystem AS, Norway: adding competence in ICS and strengthening relations to specifiers in

Norway

Bjarnes System, Sweden: unique roofing fasteners, important for the established Nordic market and

opens new opportunities in other European markets for “roofers”

MP3, Italy: strengthens position as a complete provider of ventilation solutions through key

competence within fire and smoke protection and increase market coverage

Organic

New country establishments in Istanbul and Moscow with ventilation and ICS

Adding on branches and competence centers in for example France, Switzerland, Sweden, Norway

and Estonia

First year as One Lindab moving in One direction

Some key highlights 2014

Mp3

3


0

10,000

0

1,200

4,000

1,400

800

1,000

2,000

8,000

6,000

600

400

200

Sales 12m

(SEK m)

EBIT 12m

(SEK m)

553

6,953

2010

347

6,527

9,840

L12M

Sep

2014

2005

550

6,214

2000

342

1,309

1990

169

1,758

19801959

4,415

Sales EBIT*

*) EBIT adjusted for larger one-off items

Lindab has shown great evidence of entrepreneurship over the years

Always profitable

4


However, taking a closer look at the clear trend from the last 6 years

Rethinking the approach and where Lindab was heading

• The last 11 years can be divided into 2

periods with different characteristics

• 2003 to 2008 saw consistent “price

driven growth” in Sales and EBIT

• 2009 to 2013 saw dramatic loss of

sales, however cost measures

secured EBIT

• Moving forward, we prioritize a long-

term profitable and sustainable growth

1.400

1.200

1.000

800

600

400

200

0

10.000

8.000

6.000

4.000

2012201120102009200820072006200520042003

EBIT 12m

(SEK m)

+13%

R12

Sep

2014

Sales 12m

(SEK m)

-6%

2013

EBITSales

5

lindab | we simplify constructionlindab | we simplify construction

Building on our basics

6 6


The starting point is excellent

We have a strong foundation to build on

Our Basics

People Products Production and

Processes

Sales and

Distributions

7


A matrix organization making it possible to use the full strengths of Lindab

One Lindab – Preparing the ground for simplified growth

Group functions including Finance, Legal, HR, IR,

Sourcing, Market

Group

Production

Division

Building Systems

Sales Region

North Europe

Sales Region

West Europe

Sales Region

Mid Europe

Sales Region

CEE, Russia

Ventilations

Products

Building

Products

Building

Solutions

Indoor Climate

Solutions

ONE Lindab facilitiates growth options in three dimensions: market coverage, portfolio expansion and penetration

8


Lindab combine two different characteristics in type of business

A combination of growth oriented and project related business

Building SystemsProducts & Solutions


Largest customer/project: 3-10%

Share of sales to developed markets: 48%

(Western Europe, CEE and US)

Share of renovation: 0%

Largest customer/project: 2%

Share of sales to developed markets: 98%

(Western Europe, CEE and US)

Share of renovation: 45%

9


Opportunities and

trends


Our 126 branches

and sales offices

Added

product

range

Residential

Industrial

Commercial

Marine

Public

sector

Our production facilities

Our e-Business, software

solutions and distribution

centers

Core

productsOptimized

logistics

Our 126 branches and

sales offices

CUSTOMERS

THE INFLUENCERS

USERS

More than 20 000 customers in Lindabs Ecosystem for simplified construction and energy efficient solutions

Many and close customer relations

Project

support

Research

facilities

and

knowledge

Solutions

and

systems

STRENGTHEN DISTRIBUTION

DEVELOP SOLUTIONS

Installers OEM

Contractors Distributors

ALWAYS

CLOSE,

ALWAYS

AVAILABLE

R&D facilities

Specifiers,

architects

and

consultants

Regulatory

bodies

Property

and Facility

Management

and Owners

11


Global economy patterns

Growing population and urbanization

Innovation in materials and processes

Intelligent buildings

Environment, legislation and energy saving

Five clear trends in the world today impacting Lindabs business

We see global drivers for growth


12


Environmental

aspectsare drivers in all trends

Intense pressure for

Innovations

13


A strategic shift in our

direction


New focus same basics

Transformation into a fully integrated company


From selling what we produce … … to capturing trends and fulfilling

customers’ needs …

Business Area driven sales units in each country

BA driven

production unit

R&D/Product

management

connected to

factory

New flat,

matrix

organisation


Our formula for success

Five clear strategic focus areas

Leveraging local

stars to global

standards.

Optimising the flow

from purchase to

delivery.

Creating offers of

complete ventilation

solutions.

Finding new ways

to increase

customer value.

Having the right

team for our

business.

• Strengthen

Marketing and

Sales (Solution

and Distribution)

• Geographic

presence

• Strategic

product

management

• Enhance our

offering in relevant

areas of HVAC and

strengthen

“technology content”

• Solutions in Indoor

Climate, Marine,

Residential

ventilation and Light

commercial industry

• Enhance

inventory

management

• Leverage

purchasing

power

• Improve

distribution

.

• Create a long-

term,

innovative

culture in order

to generate

ideas, both

ground-

breaking and

incremental

improvements

• A strong

employer brand

• Roll-out

groupwide

system to

identify

competences

and make

processes more

efficient

Initiatives

for 2015:

16


5-8%Annual growth based on

organic growth and

growth from acquisitions

over a business cycle

With the strategy we are refining our long term financial targets

Three financial targets supported by the new strategy

10%Operating margin over a

business cycle

2.5Long term Net debt /

EBITDA adjusted for

seasonality

The dividend target is

30% of the company’s

profit after tax

considering

opportunities for

strategic acquisitions,

the financial position of

the company and long

term need for financing

17


SolutionsLeading European companies within categories

“Residential and Light Commercial Ventilation”,

“Fire and smoke” and “Indoor Climate Solutions”

Market excellenceCompanies that add distribution in new

and existing geographies

There are areas we want to strengthen

Potential for acquisitions, primarily in two areas

18


Mp3 – Italian Ventilations Solutions Company adding competence and market coverage

Annual turnover approx. SEK 210 m with EBIT approx. SEK 20 million

95 employees

Adds in-house competence in certified “Fire & Smoke” range – important part of complete offering

to strengthen competitiveness

Strong customer relations and distribution in Southern Europe, as well as other European and new

markets

There are areas we want to strengthen

First significant acquisition in line with the strategy

announced on 16 December 2014

19


Latest Reported Financials

Q3 14


Sales increased by 9% compared to last year, or 5% when adjusted

for currency and structure

─ Products & Solutions: 11% (6% adjusted)

─ Building Systems: -1% (-3% adjusted)

EBIT amounted to SEK 210 m in Q3 compared to SEK 195 m last

year (excluding one-off items)

─ EBIT margin amounted to 11.0% (11.1)

─ Product & Solutions: 10.7% (9.7)

─ Building Systems: 12.6% (19.6)

Cash flow from operations amounted to SEK 153 m compared to

SEK 136 m in Q3 2013

Lindab Group – Q3 2014 HighlightsAn important quarter showing the way

21


All product areas within Products & Solutions show positive long-term trend

Negative growth rate for Building Systems following the unrest in the CIS region and lower demand in underlying market

Products & Solutions

-30%

-20%

-10%

0%

10%

20%

30%

Sep

2014

Sep

2013

Sep

2012

Indoor Climate Solutions

Building SolutionsBuilding Product

Ventilation Products

Sales development by product areas

Organic growth, L3M

Building Systems

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Sep

2014

Sep

2013

Sep

2012

22


Market Development and

Business Cycle


The economic recovery in the Euro zone has

slowed down since spring 2014

Though, the economic recovery remains fairly

strong in Lindab’s largest and 3rd largest market;

Sweden and United Kingdom

Increased geopolitical risks in CIS lead to longer

lead times for investment decisions in the region

Confidence continue to improve in the European

construction market despite flattening trend in

output

Both the European economy and construction

market are still predicted by most institutes to

grow in 2015 but market uncertainty has

increased with clear downward risk

Market Development Economic development in Euro zone

Sources: Eurostat & European Comission

Construction output & sentiment in EU

Source: Eurostat & European Comission

24


Lindab’s exposure to Russia (L12M):

5% of Group sales

30% of Building Systems sales

Effect by rouble fall on Lindab partly offset by local production and steel sourcing

Falling oil prices leading to GDP drop

EU sanctions

Interest hikes to strengthen rouble

Expensive / difficult access to financing

Domestic business weakening but still rather resilient

Worsened conditions in Russia

Russian GDP growth vs oil price development

Sources: Federal State Statistics Service (RU) & ICE Futures Europe

25


Characteristics of business cycle for building industry

-12

-10

-8

-6

-4

-2

0

2

4

6

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Real

mark

et

gro

wth

(%

)Business cycles:

1996 2002

European construction market for buildings vs GDPReal market growth (%)

2002 2009 2009 2012

Source: Euroconstruct (Nov -14) & IMF (Oct -14)

The business cycle for the construction

market follows general GDP development

but is more volatile

An average business cycle is almost 6

years long. Though, the variation is large,

from 2 years up to 10 years. 1

Construction market generally grow faster

than GDP in developing markets as the

need for new and more efficient buildings

and infrastructure is high, the opposite is

true for developed markets

Construction segments closely related to

energy efficiency improvements will grow

faster than GDP also in developed

markets

1) National Bureau of Economic Research (http://www.nber.org/cycles.html)

Construction GDP

28


What does this mean for Lindab?

Products & Solutions

Late cyclical, mainly due to ventilation business

Sales to renovation market cushion some of market fluctuations

Large share of sales to developed markets where energy efficiency trends will be main

demand driver

Building Systems

Large fluctuations in business and quicker response to economic changes due to

dependency on some larger projects and markets, only new build sales as well as large

share of sales to developing markets

Though, long-term, good geographic footprint for growth

Lindab Group

Increased market risks but also small market share in several markets and more

dependent on own business development than on underlying economic development

– Have gained market shares in last year and managed to significantly grow business in

challenging markets like France and Italy

29


We simplify …

… and bring more value to more people

28

Lindab Solus

Lindab Fans

Lindab Residential

Lindab Pascal

Lindab ADS

Lindab AHU

Lindab Cassette

Lindab Rainline

Lindab Fire & Smoke

Lindab Airy

Lindab IT Solutions

ArchitectContractor

DeveloperLindab

Lindab

Installer

We simplify …

… and bring more value to more people28


CMD 20 May 2015

Mark your calendar

Documents

A new strategy??? - Lindab AB...and make processes more efficient Initiatives for 2015: 16 lindab | we simplify construction 5-8% Annual growth based on organic growth and growth from