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TRANSCRIPT
lindab | group presentation
Lindab Group
Investor Day
14 June, 2010
lindab | group presentation
WELCOME
lindab | group presentation
Today’s speakers
3
BA Ventilation
Anders Thulin
BA Building Systems
Venant Krier
BA Building Components
Peter Andsberg
CEO
David Brodetsky
CFO
Nils-Johan Andersson
VTT/Euroconstruct
Pekka Pajakkala
lindab | group presentation
Agenda
12.30-12.45 Trading update David Brodetsky
12.45-13.30 Market outlook –VTT/Euroconstruct Pekka Pajakkala
13.30-14.00 Introduction to the strategy revision David Brodetsky
14.00-14.40 BA Ventilation Anders Thulin
14.40-14.55 Coffee break
14.55-15.35 BA Building Systems Venant Krier
15.35-16.15 BA Building Components Peter Andsberg
16.15-16.30 Financials Nils-Johan Andersson
16.30-17.00 Summary and Q&A David Brodetsky
17.00- Mingel with drinks
4
lindab | group presentation
TRADING UPDATE – Q2
lindab | group presentation
Lindab Group
Seasonally adjusted sales trend by month
6
Building Components and
Building Systems strongly
affected by harsh winter
Clear catch-up effect since
middle of March
Swedish market stands out from
a positive perspective
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
Jan
Feb
Mar
Ap
r
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
2009 2010
Monthly Sales
Seasonally and calendar adjusted
Monthly sales Average sales Q4
lindab | group presentation
BA Ventilation
Seasonally adjusted sales trend by month
7
Overall stabilisation in demand
Positive signs in Sweden and
some in France
Slightly down in UK and still
tough conditions in Denmark
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
Jan
Feb
Mar
Apr
Ma
y
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
Ma
y
2009 2010
Monthly Sales
Seasonally and calendar adjusted
Monthly sales Average sales Q4
lindab | group presentation
BA Building Systems
Seasonally adjusted sales trend by month
8
Several building projects
delayed due to harsh weather
conditions
Some improvement in new
orders since March
Orders in Russia are improving
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Jan
Fe
b
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
2009 2010
Monthly Sales
Seasonally adjusted
Monthly sales Average sales Q4
lindab | group presentation
BA Building Components
Seasonally adjusted sales trend by month
9
Strongly affected by the harsh winter weather, especially in CEE/CIS
Strong catch-up from mid-March
Encouraging signs in the residential market
Continued good development in Sweden while the Danish market remains weak 0
500
1 000
1 500
2 000
2 500
3 000
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
2009 2010
Monthly Sales
Seasonally and calendar adjusted
Monthly sales Average sales Q4
lindab | group presentation
Lindab Group
Trading update – Market outlook
10
Sales development supports previous market outlook
Non-Residential (80% of sales)
– Stabilising in most markets
Residential (20% of sales)
– Some improvement, particularly in Sweden
We expect 2010 to remain challenging
– Recovery in Lindab’s main segment non-residential construction is expected in the 2nd half of 2011
– Recovery of the residential segment is expected in 2010
lindab | group presentation
Lindab Group
Steel price development
Increases in steel demand worldwide, especially in Asia and in South America, one
exception being construction in Europe
Raw material cost increases (iron ore, coke etc) in combination with increasing
worldwide demand is pushing steel prices upwards
The general outlook is for heavy price increases in Q3 2010
Lindab will increase prices in Q3 to compensate
11
Source; SBB NE & CRU DE
HDG €/ton
0100
200300400500
600700800
9001000
Jan
09
Feb
09
Mar
09
Ap
r 0
9
May
09
Jun
e 0
9
July
09
Au
g 0
9
Sep
t 0
9
Oct
09
No
v 0
9
Dec
09
Jan
10
Feb
10
Mar
10
Ap
r 1
0
Jun
10
Jul 1
0
Au
g 1
0
Sep
t 1
0
lindab | group presentation
EUROPEAN CONSTRUCTION MARKET
lindab | group presentation
Guest Speaker – Pekka Pajakkala, VTT
13
VTT
State-owned Finnish research organisation with 2,900 employees
The Finnish member organisation of Euroconstruct
Pekka Pajakkala
Vice President for VTT’s business solution Real Estate and
Construction
Regular speaker at Euroconstruct’s conferences and responsible for
the non-residential section at next conference (June 25)
Building market outlook in Europe
Nordic Countries
Western Europe
CEE+CIS
Pekka Pajakkala
14.6.2010
VTT
Finland
Pekka Pajakkala, 14.6.2010 2
CONTENTS OF THE PRESENTATION
Building market outlook in Europe
Nordic, WE, CEE, CIS/RUS
S, FIN, DK, N, GER, UK, P, RUS
1. VTT in brief
2. Economic Outlook
3. Total construction market
4. Residential market
5. Non residential market
6. Summary and conclusions
Pekka Pajakkala, 14.6.2010 3
VTT in brief
Personnel 2.935 (1.1.2010)
Turnover 276 M€ (budget for 2010) of which 1/3 comes from state budget for strategic research
Offices in: Silicon Valley, Brussels, St. Petersburg, Shanghai,
Soeul and Tokyo
Focus areas of research
Applied materials
Bio- and chemical processes
Energy
Information and communication
technologies
Industrial systems management
Microtechnologies and electronics
Services and the built
environment
Business research
Customer sectors Biotechnology, pharmaceutical
and food industries
Electronics
Energy
ICT
Real estate and construction
Machines and vehicles
Services and logistics
Forest industry
Process industry and
environment
Pekka Pajakkala, 14.6.2010 4
International Economy
Pekka Pajakkala, 14.6.2010 5
GNP Growth % Source: IMF 04 2010
Pekka Pajakkala, 14.6.2010 6
Red = strong growth
Blue = weak growth
Pekka Pajakkala, 14.6.2010 7
Data until Q2 2010
Pekka Pajakkala, 14.6.2010 9
-50
-40
-30
-20
-10
0
10
20
30
40
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
Industrial
Service
Consumer
Construction
Confidence Indicators (EU27)
Balances,
May 2010
Source: Eurostat
Pekka Pajakkala, 14.6.2010 10
Consumer
Construction
Pekka Pajakkala, 14.6.2010 11
The European construction market
Pekka Pajakkala, 14.6.2010 12
1,2
2,52,0
3,12,7
0,7
-4,0
0,7
1,62,0
0,9
2,0 1,7
3,7
2,3
-8,4
-2,2
1,6
2,5
-3,0
-10,0
-8,0
-6,0
-4,0
-2,0
0,0
2,0
4,0
6,0
2003 2004 2005 2006 2007 2008 2009* 2010* 2011* 2012*
GDP
Construction
Growth of GDP and Construction in Europe, %
Euroconstruct 11/2009 * forecast
Pekka Pajakkala, 14.6.2010 13
GDP and total building output in Europe
Pekka Pajakkala, 14.6.2010 14
Pekka Pajakkala, 14.6.2010 15
The residential market
Pekka Pajakkala, 14.6.2010 16
0,0
500,0
1 000,0
1 500,0
2 000,0
2 500,0
3 000,0
1 2 3 4 5 6 7
year
Housing starts in Europe
1000 dwellings
Series1
2006 2007 2008 2009 2010 2011 2012
Source: EUROCONSTRUCT Nov. 2009
Pekka Pajakkala, 14.6.2010 17
GDP and New Building Construction output in Europe
Source: Euroconstruct November 2009
Pekka Pajakkala, 14.6.2010 18
Value of Residential building output in Sweden
€ BILL, fixed 2008 prices
Source: Euroconstruct November 2009
Pekka Pajakkala, 14.6.2010 19
The non-residential market
Pekka Pajakkala, 14.6.2010 20
Pekka Pajakkala, 14.6.2010 21
LAG IS 1½ years,
but there is another, longer lag before
vacancy rates fall and building of
new spaces starts
EMPLOYMENT GROWTH IS CRUCIAL FOR NEW NON
RESIDENTIAL
Pekka Pajakkala, 14.6.2010 22
INDUSTRIAL PRODUCTION: Manufacturing industry EUROPE
Pekka Pajakkala, 14.6.2010 23
-3 %
-9 %
-13 %-14 %
-18 %-19 %
5 %
-14 %
-25 %
-20 %
-15 %
-10 %
-5 %
0 %
5 %
10 %
Education
Health Miscellaneous Storage Agricultural Commercial Offices Industrial
New Non-residential Market: 2009%-change compered to previuos year
Source: Euroconstruct November 2009
Pekka Pajakkala, 14.6.2010 24
Pekka Pajakkala, 14.6.2010 25
Source: Euroconstruct November 2009
Pekka Pajakkala, 14.6.2010 26
60
70
80
90
100
110
120
130
2002 2004 2006 2008 2010* 2012*
Commercial
Offices
New Commercial and Office Building in EuropeVolume Index 2002 = 100
Source: Euroconstruct November 2009
60
70
80
90
100
110
120
130
140
150
2002 2004 2006 2008 2010* 2012*
Industrial
Storage
New Industrial and Storage Building in EuropeVolume Index 2002 = 100
90
100
110
120
130
140
150
160
170
2002 2004 2006 2008 2010* 2012*
Buildings for Education
Buildings for Health
New Institutional Building in EuropeVolume Index 2000 = 100
Pekka Pajakkala, 14.6.2010 27
Value of New Non-Residential Construction
50
60
70
80
90
100
110
120
130
140
150
Sweden
Denmark
Germany
United Kingdom
volume index 1991=100
Source: Euroconstruct November 2009
Pekka Pajakkala, 14.6.2010 28
Value of New Non-Residential Construction
50
100
150
200
250
300
350
400
450
Norway
Poland
volume index 1991=100
Source: Euroconstruct November 2009
Pekka Pajakkala, 14.6.2010 29
0
10
20
30
40
50
60
Industrial Agricultural Commercial
+Offices
Education Health care Others
2000 2001 2002 2003 2004
2005 2006 2007 2008
Non-residential Building in Russia including new and reconstructed non-residential buildings in 2008, total 135 mill. cubic meters
million cubic meters
Source: Federal State Statistics Service
Education
7 %
Health
care
4 %
Others
19 %Industrial
26 %
Agricultural
11 %
Commercial 38 %
Pekka Pajakkala, 14.6.2010 30
Summary and conclusions
economy
Economic growth will be slow during next years, typical after financial crisis
high unemployment and slow employment growth
Financial crisis continues as debt crisis (PIIGS-countries)
uncertainty in investment decisions, projects will be postponed
cuttings in public sector spending, low investment possibilities
Interest rates will be on low level for further 1,5…2 years
positive factor for residential building, in some amount also for non-residential
Consumer confidence is on a rather good level
good for building activity as well as services and industries
Pekka Pajakkala, 14.6.2010 31
Summary and conclusions
building construction
Building total
Construction confidence is on low level compared to other industries
Both new residential and new non-residential boomed after 2005 and caused oversupply, unsold dwellings, high vacancy rates and falling capital values and rents
“hangover”, which lasts for many years
Stimulation ends 2010..2011, no money for new, if would be needed
Bottom in 2010, but small growth 2011 (1-1,5 %), some better 2012 (2-3 %)
Residential building
Many categories exist, overheating and price bubble in many countries but reasonable development in others
residential outlook varies country by country, risk for fast rising dwelling prices in some countries
Ahead in cycle compared to non-residential, better outlook until 2012
Pekka Pajakkala, 14.6.2010 32
Summary and conclusions
new non-residential
Bottom will be reached 2011, but growth will be slow for 1-3 years
Commercial and offices
Basic trend is upwards, share of services increase further
Offices boomed more strongly than commercial,
can be seen in vacancies and rents as well as in new projects
Both stay on low level until 2012
Industrial and storages
Basic trend is downward in industry, but upward in storages
Huge free capacity in industry, logistic improvement needs storages
Institutional building, health and educational
Have been contracyclical, but decreasing volumes until 2012 (both)
Pekka Pajakkala, 14.6.2010 33
Summary and conclusions
CEE
CEE countries have small building stock compared to WE and Nordic
Huge need to build more dwellings and non-residential space
huge potential
foreign investors may be skeptic until 2012
CEE members in Euroconstruct are quite optimistic, but
- no experience in how long the overcapacity of spaces will last
- quality of statistical base may vary
- not easy to make forecasts
Pekka Pajakkala, 14.6.2010 34
VTT creates business
from technology
lindab | group presentation
STRATEGY REVISION
lindab | group presentation
Lindab Group
Financial Performance 2001-2009
15
2001 to 2008: Doubling sales and more than tripling EBIT margins
Strong impact of the recession
5 160 5 235 5 302 5 4776 214
7 609
9 2809 840
7 0193,6%4,0% 3,5%
7,0%
9,0%
11,7%
14,1%
11,8%
3,6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
2 000
4 000
6 000
8 000
10 000
12 000
2001 2002 2003 2004 2005 2006 2007 2008 2009
EBIT Margin
MSEK EBIT Margin (%)
lindab | group presentation
Competition
Some consolidation by the international players but still a fragmented market
with mostly national or regional players
Competition has exited some markets
Customers
Some consolidation among customers, but still very fragmented
Lindab is well placed to serve both local installers and multinationals
Product offering & development
Lindab remains at the forefront in simplifying construction in our segments
Product, such as “Click” innovations, smart tools
Services, such as software tool16
Lindab GroupLast strategic review in 2001 - What has changed since?
lindab | group presentation
Lindab solutions are well placed
1. Lindab Building Systems uses less steel per m² than
traditional steel construction
2. Steel raingutter systems versus plastic
3. Round air duct systems are tighter and more energy
efficient than rectangular
17
Lindab GroupWhat has changed? – Increased environmental awareness
Steel in buildings – well placed from an environmental, quality and
cost perspective
lindab | group presentation
Lindab Group
Lindab 2010 versus 2001 – Geographic presence
18
Sales per region 2008 (2009)/2001
Nordic countries
39% (42) / 57%
Western Europe
28% (32) / 22%
Central and
Eastern Europe
incl CIS
30% (21) / 13%
Other markets
3% (5) / 8%
lindab | group presentation
19
Lindab GroupWhat has changed? Lindab 2010 versus Lindab 2001
lindab | group presentation
Lindab Group
Much has changed - strong fundamentals remain
20
Excellent starting point
• Fantastic brand
• Unique market positions
• Premium products (high quality)
• High service performance
• The team; the talent; the Entrepreneurial spirit
lindab | group presentation
This is how we analysed our businesses
21
Ability to win
Mark
et
att
racti
ve
ness
Low
High
Low High
Drive towards leadership
or reduce focus
Improve portfolio and
business model
structurally and/ or
organically
Manage for cashFocus on the attractive
parts of the portfolioExercise leadership; Optimize
value and manage for cash
Extend and protect leadership
position; Drive to full potential
profit and growth
(Ma
rket gro
wth
, siz
e,
pro
fita
bili
ty,
Com
pe
titive
ness, E
ntr
y b
arr
iers
)
lindab | group presentation
22
Lindab Group
The strategy revision – “Outside in”
Project from November 2009 to April 2010
Approximately 1000 customer interviews conducted
Approximately 50 management interviews conducted
Approximately 50 competitors and expert interviews conducted
Lindab
current
strategy
and facts
Customer
interviews
Competitor
interviews
Resource
analysis
Mgmt plans
and
interviews
Strategic analysis and assessment
Expert
interviews
Market
trends and
research
lindab | group presentation
Lindab Group - Strong sales growth previous cycleCompound organic growth 2001 to 2008 5.4%
23
5 160 5 235 5 302 5 4776 214
7 609
9 2809 840
7 019
0
2 000
4 000
6 000
8 000
10 000
12 000
2001 2002 2003 2004 2005 2006 2007 2008 2009
Strategy has been successful
Ambition to grow at a faster pace
Take account of trends
Take account of our strongholds – what makes Lindab unique
Correct underperforming areas
lindab | group presentation
Business Area Ventilation
24
lindab | group presentation
BA Ventilation
Business area Ventilation is a ventilation specialist providing to an efficient and healthy
environment for property users and owners
Leading supplier of ventilation products
Global leader in round air duct work manufacturing machines
25
Segment –
percentage of salesDivisions –
percentage of sales
Region –
percentage of sales
Non-residential 90% Air Duct Systems 88%
Residential 10%Comfort 12%
Western Europe 43%
Nordic 44%
Other 8%
CEE/CIS 5%
*2005-2009
lindab | group presentation
BA Ventilation
Product groups
26
Machinery/Spiro• World leading supplier of round duct
work machinery, second brand for
pressed fittings, selling to local
manufacturers
• Acts as a door-opener for additional
Lindab Ventilation products
Air & Water• Modularized ceiling diffuser range
• Simple and standardized adaption
• Simplified distribution
• Cooling, heating and ventilation in
one unit with optimized air flow
pattern.
Acoustics• Silencer with aerodynamic shape.
• Energy and space efficient
Air Ducts Comfort
Software• Software to simplify design
and secure end user result
Lindab – Ducts and fittings• Ventilation specialist selling to
installers all material needed for a
ventilation installation
• One stop shopping with optimised
customer service
lindab | group presentation
BA Ventilation
Environmental trend
27
• Kyoto protocol
• EU Energy Performance of Buildings Directive
• National law and building directives
• End customers demand: Environmental friendly buildings
Energy efficient
ventilation
Energy efficient and
healthy buildings
lindab | group presentation
BA Ventilation
European footprint
28
Clear market leader in the
Nordic countries
Strong position in many
Western European
markets
CEE/CIS well established
in main markets
Two major Supply Chain
Centre covers Europe
Major Production facility
Local Production Facility
Branches & Dealers
Branches
lindab | group presentation
BA Ventilation
Production units
Grevie production facility is a highly automised pressed fitting production
Karlovarska is a production facility focusing on more labour intensive production
29
Grevie, Sweden Karlovarska, Czech Republic
lindab | group presentation
BA Ventilation
Financial performance 2006-2009
Grew steadily up to 2008
As a result of the financial crisis sales declined during 2009
Initially lost market shares but have adjusted price structure
Main cost reduction activities implemented before or during Q1 2010
10,5% EBIT margin in a peak market – room for improvement
30
lindab | group presentation
BA Ventilation
Sales mix
31
A stable sales mix over a full business cycle
Today a market leader on European scale for Circular fittings and Circular specials
Rectangular sales supports a round revolution
Lindab sales by product group 2003–2009
15%
28%
9%
23%
7%
11%
5%
2%Circular Ducts
Circular Fittings
Circular Special
Ventilation products
Rectangular systems
Comfort
Machines
Other BAV
Traded goods
lindab | group presentation
BA Ventilation
Customers
32
1. A strong culture for high service levels,
reliability and availability, and high quality
2. Deep and longstanding relationships with
installers
A broad distribution network that
enables partnering with local
installers
3. Historically a strong and dedicated
partner to the ventilation installers
professionals
Competitive cost position (relative
to total offering)
Cost efficient, specifically in fittings
Customer surveys highlights 3 success factors that contributes to
our uniqueness in terms of value proposition:
What is the most important criteria when
purchasing ventilation products?
0
20
40
60
80
100%
Denmark
Deliveryaccuracy/reliability ofsupply
Fair price
Product quality
Other
Service/technicalsupport
Energy efficiency
UK
Service/technicalsupport
Deliveryaccuracy/reliability ofsupply
Fair price
Energy efficiencySupplier loyalty
Product quality
Sweden
Delivery accuracy/
reliability of
supply
Product quality
Fair price
Supplier loyalty
Other
Energy efficiency
Service/technicalsupport
Germany
Deliveryaccuracy/reliability ofsupply
Fair price
Product quality
Other
Share of respondents
Service/technical support
lindab | group presentation
BA Ventilation
Point of departure
Machines and Circular Fittings are most
profitable
Have not harmonized traded goods
portfolio across countries, strong potential
Have a very strong position in European
scale circular fittings and specials
Performance affected of economics of
scale and costs associated with
expanding in new countries
Significant potential for Comfort and some
potential for ADS with energy efficient
trend
*Per adjusted EBIT-margin (average 2005-2009)
Product group Ranking per
EBIT-margin*
Machines >15%
Circular fittings >15%
Traded goods >10%
Circular special 5-10%
Circular ducts <5%
Comfort <5%
Rectangular systems <5%
lindab | group presentation
BA Ventilation
Journey ahead – focus areas
Need to excel both as cost leading manufacturer and as professional distributor
Circular fittings is our core business
Potential to bundle ducts and comfort
Comfort needs larger scale
34
Mark
et
att
racti
ve
ness
Low
High Drive towards leadership
or reduce focus
Manage for cashFocus on the attractive
parts of the portfolioExercise leadership; Optimize
value and manage for cash
(Ma
rket gro
wth
, siz
e,
pro
fita
bili
ty,
Com
pe
titive
ness, E
ntr
y b
arr
iers
)
Comfort
Distribution
Improve portfolio and
business model structurally
and/ or organically
Machines
Local
manufacturing
Extend and protect leadership
position; Drive to full potential
profit and growth
Fittings
Ability to win
lindab | group presentation
BA Ventilation
Vision
The Nr 1
Ventilation supplier and distributor
in Europe and Russia
lindab | group presentation
BA VentilationDistributor and product supplier – two different business models
36
Supplier Distributor
Cost position / Scale in the
relevant reach/ geography
Regional vs. national vs. local
Purchasing
High/ sufficient product quality
Low-cost and high-quality
manufacturing
Standardization
Purchasing of raw material
Product development
Ability to buy products at low cost
Ability to offer customer a full
bundle
Customer understanding
E.g. optimal bundle, technical
competence, purchasing
decisions, how to influence etc.
Purchasing
Logistics
Key account management
Distribution/ transportation cost
Sales & Marketing
Purchasing goods
Key success
factors
Business
model
fundamentals
Key costs
Raw material
Direct production costs
Depreciation of production units
(including machines)
lindab | group presentation
BA Ventilation
Strategy summary
37
Point of departure Refreshed strategy
Integrated manufacturer and
distributor of Ventilation products,
organic growth ambitions in
comfort
Establishing full infrastructure and
rolling out manufactured product
range in all new markets
Two distinct businesses
Supply (ADS and Comfort)
Distribution
Sales of fittings first priority in all
markets, regardless of own or 3rd
party distribution
Grow as a leader in Distribution
and Comfort
Synergies in logistics and
productivity will be facilitated
through focused production hubs
lindab | we simplify construction
lindab | group presentation
Business Area Building Systems
39
lindab | group presentation
BA Building Systems
40
BA Buildings Systems is specialised in tailor-made steel buildings
Seen as the No. 1 supplier on a pan European basis
Holds a leading position in production and warehousing units
Region – percentage of sales Segment – percentage of sales
CIS 22%
CEE 38%Offices 10%
Industrial warehousing 30%
Other 5% Industrial
production 35%Western Europe
40%Sports 5%
Commercial 15%
*2005-2009
lindab | group presentation
Software for builder/dealers• Builder/dealer pricing and project management software
• Extranet for dealers with large knowledge pool
• Search engines for reference buildings selected amongst 50 000
BA Building Systems
Product solutions
41
Single storey• Mainly for production, warehousing, commercial, leisure
Multi storey• Mainly for offices and retail
lindab | group presentation
BA Building Systems
European footprint
42
Focus markets represent
75% of sales
Regional sales offices
coordinate local sales
managers
Regional sales offices with
Engineering support in local
languages
Project data in local
languages, local approvals
on hand
Market share is low due to
very fragmented market (2-
4% depending on markets)
Sales office
Total number of dealers=350Focus markets
Kazachstan
Production unit
lindab | group presentation
BA Building Systems
Production units
Luxembourg for Western Europe, Czech for CEE and Russia for CIS
43
Bucharest, Romania
Diekirch, Luxembourg Prerov, Czech Republic
Yaroslavl, Russia
lindab | group presentation
BA Building Systems
Financial performance 2006-2009
Strong development during the last business cycle
Strong GDP growth
Strong position in CEE and competitive offer
Heavily affected by the financial crisis; New build and CEE
Managed a slight profit despite a steep sales drop due to significant cost programme
Has developed a flexibility to adjust to cycles, using leased people
in the peak, as well as subcontracting some engineering work44
1,546
1,9002,066
978
0
1,000
2,000
2006 2007 2008 2009
0%
5%
10%
15%
20%
25%
SEK M EBIT Margin (%)
lindab | group presentation
BA Building Systems
Sales mix
Higher share (up to 50-60%) small to medium sized buildings in Western Europe
Key account mainly large buildings (>3000 sqm) from West to East (direct foreign
investments)
Higher share commerce and multistorey buildings sales in Western Europe
45
0
50
100
150
Building size
3000-4000
sqm
4000+ sqm
2000-3000sqm
0-1000 sqm
1000-2000
sqm
147
Product solution
Single StoryBuildings
Multi Story Buildings
Other
147
End-usage
Warehouses
Manufacturing
Other
Commerce
147
Region
Russia, CIS
South East
North East
Key Accounts
West
Central
147
Order intake
(€M, average 2005-2009)
CEE
West
Europe
lindab | group presentation
BA Building Systems
Customers
46
1. Provides quality/ technical competence
Project pricing/speed
Strong brand name/ recognition
2. Seen as a good additional product to
the builder dealers’ offering
Revenue upside to low cost
Extra potential to bid for complex/
large projects
3. Strong partner - good at establishing
strong relationships
Customer surveys highlights 3 success factors that contributes to
our uniqueness in terms of value proposition:
What is the most important criteria when
purchasing building systems/ solutions?
0
20
40
60
80
100%
Manufacturing
Product quality
Fair price
Lead time
Payment termsReferences
Warehouses
Product quality
Fair price
Payment terms
Lead time
Commercial
Product quality
Fair price
Lead time
Payment terms
Ability to customize
Sports/leisure
Product quality
Fair price
Lead time
References
Ability to customize
Share of respondents (%)
lindab | group presentation
BA Building Systems
Point of departure
Larger buildings more profitable
Most competitive in larger buildings
Welded frame technology
Effect of scale
Less small competitors
2008 BA Systems record year & 2009
BA year not computed, as not representative
0
5
10
15
20%
0-1000 sqm
12%
>1000 sqm
18%
35% 36%Net std margin
# projects
Estimated EBIT margin (%)
by project size (average 2006-07)
298 358
>15%
<15%
EBIT margin,
average
lindab | group presentation
BA Building Systems
Journey ahead – focus areas
First priority to focus on large buildings – continue industrialisation process
Evaluate opportunities within smaller buildings
48
Ability to win
Mark
et
att
racti
ve
ness
Low
High
Low High
Drive towards leadership
or reduce focus
Improve portfolio and
business model
structurally and/ or
organically
Manage for cashFocus on the attractive
parts of the portfolioExercise leadership; Optimize
value and manage for cash
Extend and protect leadership
position; Drive to full potential
profit and growth
Parking
Multi storey
building
Heavy
structure
Logistics
Agriculture
Small
industrial
Car
showrooms
Super mkts
Sports
Large
industrial
(Ma
rket gro
wth
, siz
e,
pro
fita
bili
ty,
Com
pe
titive
ness, E
ntr
y b
arr
iers
)
lindab | group presentation
BA Building Systems
Vision
The preferred supplier
of sustainable solutions for industrial buildings
in Europe, Russia and CIS
lindab | group presentation
BA Building Systems
The roadmap –
our strategy
50
Growth
markets
Main
markets
Success
factors
Large industrial
buildings
Small sized
industrial buildings
Europe/Russia/CIS
Adjacent segments if
served with standardized
solution
• Manufacturing excellence• Continuous cost improvements• Direct sales• Dealer recruiting & performance
management
• More cost effective solution• Dealer recruiting & performance
management
CEE & CIS Western Europe & CEE
lindab | group presentation
BA Building Systems
Strategy summary
51
Point of departure Refreshed strategy
Focus on serving dealers with
tailor made solutions in all
targeted markets and for a large
number of end-usage segments
Focus on Russia
Core large industrial buildings as
first priority
B/D management and
recruitment
Focus on direct sales in
Russia
Focus on costs and
industrialization
Adding a more cost competitive
smaller solution as second priority
lindab | we simplify construction
lindab | group presentation
Business Area Building Components
53
lindab | group presentation
BA Building Components
BA Components is specialised in developing and supplying sheet metal based products and
systems for construction.
Seen as the No. 1 supplier to small and middle size customers working both in the
residential and the non-residential
Holds a leading market position in Nordic region and CEE;
limited sales to Western Europe
54
Region – percentage of sales Segment – percentage of sales
Non-residential
56%
Residential 44%
*2005-2009
CEE/CIS
40%Nordic 54%
Western Europe 6%
lindab | group presentation
BA Building Components
Product groups
55
Coverline• Profiled sheet metal roof, wall
products ,sandwich panels and
accessories
• Top 3 in core markets
Construline• Lightweight construction solutions
made from steel
Doorline• A wide range of sectional industrial
and garage doors mainly for the
Nordic markets
Residential Non-residential
Rainline• The biggest steel rainwater
system producer in Europe
Topline• One of Europe's leading
suppliers of thin steel based
residential roofing products
Seamline• Wide range of sheet metal
based products and
accessories for traditional
standing seam roofing
lindab | group presentation
BA Building Components
European footprint
56
10 production facilities of
varying sizes strategically
located across Europe
combined with central
warehouses
38 shared branches across
Sweden, Norway and
Finland
Over 700 stockholding
building merchant branches
in the Nordics
Over 1500 distributors
primarily in CEE
Major Production facility
Local Production Facility
Dealers
Branches & Dealers
Rep offices
lindab | group presentation
BA Building Components
Main production unit
Geographically optimised, modern and well-invested production facilities
High automation production in high cost countries and less standardised
production locally57
Förslöv, Sweden
Budapest, Hungary
Jels, Denmark
Bucharest, Romania
lindab | group presentation
BA Building Components
Financial performance 2006-2009
Strong development up until 2008 mainly driven by strong demand in core markets and
strategic pricing
2009 market affected by the economic situation; falling demand and price pressure
Sales dropped with 27%
Early actions on costs58
2 4332 812 2 927
2 144
15,9% 16,0%
14,1%
6,3%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0
1 000
2 000
3 000
4 000
5 000
6 000
2006 2007 2008 2009
Sales
SEK MEBIT Margin
(%)
lindab | group presentation
0
10
20
30%
Industrial
8
Residential
17
EBIT, Average
2003-2009 (%)
-1 102009
EBIT (%)
BA Building Components
Understanding where we are today - point of
departure
Residential offering represents ~50% of
sales and ~70% of our profits
Rainline main driver
Nordic the largest market
CEE generates highest margins
<10%
>15%
EBIT margin,
average
lindab | group presentation
60
24,4%
24,3%
17,3%
9,4%
9,3%
15,5% Rainline
Coverline
Topline
Construline
Doorline
Seamline
Lindab average sales by product group 2003–2009
BA Building ComponentsSales mix - Small changes in the overall sales mix, our
products have been growing neck by neck
Sales mix has remained quite constant over the 2003-2009 period
Strategy has been focusing on selling steel components and solutions as
a full range supplier
lindab | group presentation
BA Building Components
Customers feedback; what makes us unique
61
1. A strong culture for high service levels,
reliable deliveries and availability
2. Deep and longstanding relationships
with installers
3. Seen as being the leader in quality
4. Premium price
Customer surveys highlights 3 success factors that contributes to
our uniqueness in terms of value proposition:
What is the most important criteria when
purchasing building component products?
0
20
40
60
80
100%
Nordic
Other*
Service/technical support
Product quality
Fair price
Deliveryaccuracy/reliability
of supply
CEE
Other*Service/technical support
Product quality
Fair price
Delivery accuracy/reliability of supply
Percentage of respondents
lindab | group presentation
BA Building ComponentsEstimated Lindab market share by country and product
group - big potential in core markets
Rainline market size; 5 Euro per capita in the Nordic countries and 1.5 Euro per
capita in CEE
Big potential for market growth for Rainline in CEE markets
62
ConstrulineToplineRainline CoverlineSeamlineMarket
share
Residential Non-residential
Nordics ~30% ~20% ~20% ~15% ~10%
CEE ~10% ~20% ~10% ~15% ~10%
lindab | group presentation
BA Building Components
Journey ahead – focus areas
First priority to aggressively grow Rainline on large scale and create
supporting local strongholds for residential roofing
Focus our non-residential business on strong profitable local positions in
our select core markets63
Ability to win
Mark
et
att
racti
ve
ness
Low
High
Low High
Residential
roofing
Drive towards leadership
or reduce focus
Improve portfolio and
business model
structurally and/ or
organicallyRainline
Industrial
Roofing/walling
Manage for cashFocus on the attractive
parts of the portfolioExercise leadership; Optimize
value and manage for cash
Partition
wallsDoorline
Extend and protect leadership
position; Drive to full potential
profit and growth
(Ma
rket gro
wth
, siz
e,
pro
fita
bili
ty,
Com
pe
titive
ness, E
ntr
y b
arr
iers
)
lindab | group presentation
BA Building Components
Vision
Become the European Nr 1 supplier in Rainline
and steel residential roofing
Become market leader for non-residential steel
roof and wall solutions in core markets
lindab | group presentation
BA Building Components
The roadmap –
our strategy
65
Growth
markets
Core
markets
Success
factors
Rainline and roofing
Nordics and CEE Nordics and CEE
CEE and focused efforts
in Russia and UK Nordics and CEE
Roofing and walling
• Strengthened relations with installers• Increased focus distribution• Marketing and communication
Residential Industrial
• Maintain low cost base• Strengthening product portfolio
Focus
products
lindab | group presentation
BA Building Components
Focus product - Rainline
Our aim:
To considerably strengthen Lindab Rainline
distribution
To develop and strengthen the Lindab
Rainline installer network
To agressively increase Lindab Rainline’s
sales and market share and as a spinoff
increase sales of the other products in the
residential offer
Introducing The Lindab “Rainline Center” Sales Concept CEE/CIS
lindab | group presentation
BA Building Components
Lindab Rainline Sales Concept CEE
1. Lindab Rainline Center
2. Lindab Rainline Express
3. Lindab Rainline Expert
Installers Loyalty
program
lindab | group presentation
BA Building Components
Lindab „Rainline Loyalty Program“
Our aim:
To create and maintain a database of
installers i.e. „key decision makers“
To provide an extra motivation to our
dealers to sell Lindab products
To provide an extra motivation to installers
to use Lindab
To have direct connection to installers
lindab | group presentation
BA Building Components
Strategy Summary
69
Point of departure Refreshed strategy
Focus on selling steel
components as a full range
supplier
Geographic through sequenced
approach (sales – warehouse –
manufacturing)
Clear and separate focus on
residential and industrial segments
Growth of Rainline first priority
Extend and protect leadership
position
Industrial products second priority
Cost-effectiveness with
selected growth
Supporting products and
product development
lindab | we simplify construction
lindab | group presentation
FINANCIALS
lindab | group presentation
Lindab Group
Current market exposure
72
Sales per region 2009
Nordic countries
42%
WE, excl PIIGS
29%
CEE/CIS, Group A
14%
Other markets
5%
CEE/CIS, Group B
7%
PIIGS
3%
lindab | group presentation
Lindab Group
Cost reduction focus
Cost saving in total SEK 600 m since Q4 2008, approximately 50% of savings is
permanent
Production capacity in place
Sales organisation footprint in place, limited cost reduction
Admin cost same level as 2005
73
MSEK 2005 2010
Production -836 -880 +5.2%
Sales and R&D -852 -999 +17.3%
Admin -521 -533 +2.3%
Total -2 209 -2 412 +9.2%
SEK/EUR
9.28
SEK/EUR
10.20
lindab | group presentation
FINANCIAL TARGETS
lindab | group presentation
Lindab Group
Financial targets
6% 8%
Geographic focus on higher growth regions, particularly Russia
Focus on our most competitive products
Starting from a low point
Our market is expected to grow at an average of 3-4% y-o-y.**
75
Growth (organic)
*Average organic growth excluding acquisitions 2001 - 2008
5.4% (total topline incl. acquisitions and currency 9.3%)
**Bain
lindab | group presentation
Lindab Group
Financial targets
14% unchanged
Under good economic conditions
Strong operating leverage
Change product mix towards more profitable product groups
76
EBIT
lindab | group presentation
Lindab Group
Financial targets
1.0 -1.4 0.8 -1.2 times
In line with levels over the past few years*
77
Gearing
*Excluding acquisitions
lindab | group presentation
Lindab Group
Financial targets
40-50% of net profit unchanged
In line with levels in 2007 & 2008
78
Dividend
*However, Lindab’s long-term financial needs will always be taken into consideration
lindab | group presentation
SUMMARY OF STRATEGY
lindab | group presentation
Lindab Group
Previous strategy was sound – room to do better
80
Strong fundamentals – excellent starting point
Fantastic brand
Unique market positions
Premium products (high quality)
High service performance
Geographic focus – good balance stable/growth markets
The team; the talent; the Entrepreneurial spirit
lindab | group presentation
Lindab Group
Growth will be supported by external trends
81
Some “catch up” effect
Eastern Europe returns to a growth trend
Russia/CIS is today <5% of our sales will grow strongly
Accelerating environmental trend
lindab | group presentation
Lindab Group
Ventilation – Key strategic focus areas
82
Sales of fittings, own or
3rd party distribution
Grow as leader in
distribution
Comfort needs larger
scale
Two distinct businesses; supply and distribution
Mark
et
att
rac
tive
ne
ss
Low
High Drive towards leadership
or reduce focus
Manage for cashFocus on the attractive
parts of the portfolioExercise leadership; Optimize
value and manage for cash
(Ma
rke
t gro
wth
, siz
e,
pro
fita
bili
ty,
Com
pe
titivene
ss,
En
try b
arr
iers
)
Comfort
Distribution
Improve portfolio and
business model structurally
and/ or organically
Machines
Local
manufacturing
Extend and protect leadership
position; Drive to full potential
profit and growth
Fittings
Ability to win
lindab | group presentation
Lindab Group
Building Systems – Key strategic focus areas
83
Focus on direct sales
in Russia to
complement Builder
dealer sales
Add a more cost
competitive smaller
building solution
Large industrial buildings main priority
Ability to win
Ma
rke
t a
ttra
cti
ve
ne
ss
Low
High
Low High
Drive towards leadership
or reduce focus
Improve portfolio and
business model
structurally and/ or
organically
Manage for cashFocus on the attractive
parts of the portfolioExercise leadership; Optimize
value and manage for cash
Extend and protect leadership
position; Drive to full potential
profit and growth
Parking
Multi storey
building
Heavy
structure
Logistics
Agriculture
Small
industrial
Car
showrooms
Super mkts
Sports
Large
industrial
(Ma
rke
t g
row
th, s
ize
, p
rofi
tab
ility,
Co
mp
etitive
ne
ss, E
ntr
y b
arr
iers
)
lindab | group presentation
Lindab Group
Building Components – Key strategic focus areas
84
Aggressive growth of
Residential/
Rainline
Strengthen non-
residential products in
core markets
Clear and separate focus on residential and non-residential
segments
Ability to win
Mark
et
att
rac
tiven
ess
Low
High
Low High
Residential
roofing
Drive towards leadership
or reduce focus
Improve portfolio and
business model
structurally and/ or
organicallyRainline
Industrial
Roofing/walling
Manage for cashFocus on the attractive
parts of the portfolioExercise leadership; Optimize
value and manage for cash
Partition
walls
Doorline
Extend and protect leadership
position; Drive to full potential
profit and growth
(Ma
rket
gro
wth
, siz
e,
pro
fita
bili
ty,
Com
pe
titivene
ss,
En
try b
arr
iers
)
lindab | group presentation
Lindab Group
Summary – Grow faster than before
85
Point of departure Refreshed strategy (3-5 years)
Each BA’s had a similar approach
to most of their markets
Rolling out the same product
groups in similar ways in all
markets
Focusing our efforts and investments
“where we make the most money ” and “in
largest growth potential segments”
Differentiated approach market by market
based on strengths
KEY FOCUS AREAS:
BAV: Fittings & Distribution. Grow
Comfort.
BABC: Residential (in particular
Rainline). Non-residential in Core
markets
BABS: Large buildings
Selective acquisitions to strengthen core
offerings
lindab | group presentation
Lindab Group
New group vision
86
“The leader in
industrialised ventilation
and building solutions -
Europewide”
Lindab current Vision
1) Simplifying construction
2) Down to earth
3) Neatness and order
Lindab previous Vision Lindab new Vision
“To be the preferred
partner for building
professionals in our core
products Europewide”
Lindab will achieve its
vision through following
its core values
lindab | group presentation
”Going for Gold”
Optimize
Growth
DeliverLindab culture
lindab | we simplify construction
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