nine months report, jan sep 2014mb.cision.com/main/405/9667661/303328.pdfto participate, please call...

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NINE MONTHS REPORT, JAN‐SEP 2014TELEPHONE CONFERENCE 23 OCT, 2014, AT 15:30 CETTOMMY ANDERSSON, PRESIDENT AND CEO | HELENA WENNERSTRÖM, EVP AND CFO

AGENDA1. Bulten in brief2. Market development3. Third quarter 20144. Going forward

BULTEN IS FOCUSED ON FASTENERS FOR THE AUTOMOTIVE INDUSTRY

In end of June 2014, division Finnveden Metal Structures was sold to Shiloh Industries Inc. to a final purchase price amounting to SEK 374 m

The continuing business is focused on the fast growing and international fastener business

The financial position for Bulten is strengthened after the divestment and creates better conditions to seize opportunities the coming years

Tommy Andersson is President and CEO of the Bulten Group

Company name changed from FinnvedenBultenAB to Bulten AB as from September 1, 2014

3NINE MONTHS REPORT, 2014

BULTEN‐ A STRONGER SOLUTION

BULTEN IS ONE OF THE LARGEST SUPPLIERS OF FASTENERS TO THE EUROPEAN AUTOMOTIVE MARKET

Development and production of a wide range of metallic fasteners and related services

Major player in critical fasteners for engines

Customer‐specific, special fasteners is a large part of the product range

Technical development, materials, production know‐how and logistics as well as full Full Service Provider (FSP) concepts

Leading FSP supplier in Europe

Number of employees approx. 1,100

Sales in 2013 approx. SEK 1,806 million

5

METALLIC BOLTS/SCREWS AND NUTS

CLIPS

PLASTIC SCREWS

RIVET

PINS

WASHERSSERVICE

ENGINEERING

LOGISTICSTVM

DESIGN

TESTING

PROJECT MANAGEMENT

Core products are metallic screws, bolts and nuts There are also other types of fasteners including rivets,

washers and clips Services linked to fasteners

LINE‐FEEDING

NINE MONTHS REPORT, 2014

STRATEGIC DIRECTION

Supporting the global automotive industry with state of the art fastener technology. Empower our people to be the best in the industry.

Be a leading business partner and supplier of fasteners to the international automotive industry ‐ continuously developing its full service concept.

Actively launch innovations and services in the product area of fasteners ‐ securing its position in Europe and increase presence on growth markets.

Be the preferred supplier when customers requires quality deliveries including design, project management, application engineering, testing, TVM (Total Value Management), manufacturing/trading and logistics.

To grow stronger than the industry in average Operating Profit (EBIT) > 7% Return on Capital Employed (ROCE) > 15%

VISION

BUSINESS IDEA

FINAN

CIAL

TA

RGETS

NINE MONTHS REPORT, 2014 6

BULTEN HAS ITS STRONGEST POSITION IN NORTHERN EUROPEBUT WILL GROW ON EMERGING MARKETS

7

The major part of sales go to production of vehicles in Europe, of which a significant portion is exported to other markets around the world.

SWEDEN 17%

GERMANY 17%

UK 30%

POLAND 1%ROEU 27%

CHINA 3%

US 4%

ROW 1%

RUSSIA 0% (start‐up)

Geographic sales distribution January – September 2014


BULTEN IS EXPANDING ITS MANUFACTURING AND LOGISTIC FOOTPRINT

Production mainly in Western and Eastern Europe

New establishment in Russia and growth in Chinese plant will strengthen future production footprint and support local content

Bulten produces most products in‐house and has a significant trading operation to optimize efficiency

Strengthened logistic capacity in the US and the UK and planned in Poland

Head office

Production

Development

Sales/logistics

IN‐HOUSE VS. TRADING (SALES VALUE)

In‐house

55%

Trading

43%

Logistics

2%

LEAN AND WELL POSITIONED MANUFACTURING FACILITIES IN EUROPE AND ASIA


9

STRONG CUSTOMER BASE AND RELATIONSHIPS WITH MAJOR LIGHT VEHICLE AND HEAVY COMMERCIAL VEHICLE OEMS AS WELL AS TIER 1 SUPPLIERS

OEMs –LIGHT VEHICLES

OEMs –HEAVY VEHICLES

72% 14% 14%

SELECTION OF CUSTOMERS

Share of Bulten’s sale YTD, 2014, . Share of Bulten’s sale YTD, 2014, Share of Bulten’s sale YTD, 2014,

TIERAUTOMOTIVE SUPPLIERS


MARKET DEVELOPMENT

MARKET DEVELOPMENT

LMC Automotive reports for automotive production in Europe, 2014: Production of LV in 2014 expected up by 2.7% compared to 2013 Production of HCV (>15 t) in 2014 expected down by ‐5.7 % compared to 2013 For Bulten’s mix, up 1.5%

Bulten Q3, 2014: Strong market share and volume growth in Bulten

Bulten’s deliveries YTD: LV stands for ~86% of sales HCV stands ~14% of sales


12

LMC AUTOMOTIVE FORECAST FULL YEAR 2014

PRODUCTION GROWTH RATE (YEAR ON YEAR) LIGHT VEHICLES EUROPE

Adjusted Q3 LMC Automotive analysis show that production of LV in 2013 was 0.9% higher than 2012, growth rates are expected to pick up over the next three years

PRODUCTION GROWTH RATE (YEAR ON YEAR) HEAVY COMMERCIAL VEHICLES (>15t) EUROPE

Adjusted Q3 LMC Automotive analysis shows a production increase of appr. 4,9% between 2012 and 2013. In 2014 LMC expect a production drop of ‐5,7% within the HCV segment. Strong Recovery expected in 2015.

Source: LMC Automotive Q3, 2014NINE MONTHS REPORT, 2014

-5,3%

4,0%2,5%2,7%

0,9%

‐6%

‐4%

‐2%

0%

2%

4%

6%

2012E 2013E 2014E 2015E 2016E

Q2 2014 Q3 2014

-4,1%

4,9%

-5,7%

7,7%

10,6%

‐8%‐6%‐4%‐2%0%2%4%6%8%10%12%

2012E 2013E 2014E 2015E 2016E

Q2 2014 Q3 2014Analysis Q2, 2014 Analysis Q3, 2014

Analysis Q2, 2014 Analysis Q3, 2014

BULTEN HAS OUTPERFORMED THE GROWTH OF VEHICLE PRODUCTION IN WESTERN EUROPE ‐ NEW CONTRACTS STRENGTHEN THIS TREND

FSP contract for supply of fasteners to major automotive manufacturers

During 2013 Bulten was awarded contracts with annual value of approx. SEK 500 million

New deliveries have started early 2014, well executed and according to plan

Estimated full delivery capacity in 2015

Bulten has received supplementary volumes from an existing customer with an annual value of approximately SEK 150 million at full production in 2016

Bulten’s sales development vs. market development (adj. for currency), index year 2009

New contracts will give an additional boost.

>+40%

Solid underlying business and well positioned to gain market share with

new and existing FSP contracts


BULTEN IS EUROPEAN MARKET LEADER IN FSP‐RELATED SOLUTIONS FOR THE INTERNATIONAL AUTOMOTIVE INDUSTRY ‐ CONDITIONS FOR CONTINUED GROWTH ARE GOOD

New FSP contracts will increase Bulten’s share in 2014.

Source: EIFI, Bulten



KEY SUCCESS FACTORS FOR BULTEN’S STRONG GROWTH

FULL SERVICE PROVIDER

EXPERIENCED MANAGEMENT AND DEDICATED STAFF

QUALITY LEADER

TECHNOLOGY LEADER

LOW COST PRODUCTION

4. THIRD QUARTER 2014

CONTINUING OPERATIONS

As a result of the divestment of division Finnveden Metal Structures June 30, 2014, Finnveden Metal Structures is reported as ”Discontinued operations”separate from continuing operations in accordance with IFRS 5 ”Non‐current Assets Held for Sale and Discontinuing Operations”

Unless otherwise stated, information in this presentation relates to continuing operations

Continuing operations equal Bulten operations and HQ, such as overhead and IT operations


FINANCIAL SUMMARY (MSEK)

Q3 JAN‐SEP 12 M ROLLING FULL YEAR

2014 2013 ∆ 2014 2013 ∆ OCT 2013‐SEP 2014 2013

Net sales 593.3 435.6 36.2% 1,793.2 1,334.0 34.4% 2,265.1 1,805.9

Gross profit 104.8 80.5 24.3 339.7 244.4 95.3 437.1 341.8

Earnings before depreciation(EBITDA) 35.7 30.0 5.7 128.4 110.9 17.5 169.7 152.2

Operating earnings (EBIT) 24.7 19.7 5.0 95.0 78.6 16.4 125.6 109.2

Operating margin, % 4.2 4.5 ‐0.3 5.3 5.9 ‐0.6 5.5 6.0

Adjusted operating earnings (EBIT) 13.5 19.7 ‐6.2 83.8 78.6 5.2 114.4 109.2

Adjusted operating margin, % 2.3 4.5 ‐2.2 4.7 5.9 ‐1.2 5.1 6.0

Earnings after tax 17.0 12.7 4.3 66.0 78.0 ‐12.0 88.4 100.4

Adjusted Earnings after tax 8.3 12.7 ‐4.4 57.3 50.9 6.4 79.7 73.3

Order bookings 570.5 445.9 27.9% 1,851.2 1,397.2 32.5 2,465.5 2,011.5

Return on capital employed, % ‐ ‐ ‐ ‐ ‐ ‐ 9.5 8.1

GROUP SUMMARYTHIRD QUARTER

Net sales up 36.2%

EBIT margin 4.2% (4.5)

Earnings after tax SEK 17 m (12.7)

EPS 0,89 SEK (0.60)

COMMENTS

Positive trend in sales and orders continued in the third quarter

- Supplementary order of appr. SEK 150 million at full production from 2016

EBIT affected by high priority of deliveries and fewer production days

Positive and negative events effected margin of net SEK ‐3 million Optimization of new contracts will gradually improve profitability


SIGNIFICANT EFFECTS IN SALES AND ORDER INTAKE FROM NEW COMPREHENSIVE FSP CONTRACTS

The ramp‐up of the two FSP contracts has been successfully implemented in during Q1‐Q3

Supplementary volumes from an existing customer with an annual value of approximately SEK 150 million at full production in 2016 – with start of deliveries in Q4, 2014

Less production days in Q3


MSEK


STRONG GROWTH AFFECTS EBIT – OPTIMIZATION ON‐GOINGMSEK

4,5% 4,2%4,7%

0,0%1,0%2,0%3,0%4,0%5,0%6,0%7,0%8,0%9,0%10,0%

0

5

10

15

20

25

30

35

40

45

Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14

EBIT

EBIT margin

EBIT margin simulated

Significant organic growth with many parallel activities. Start up costs for: New FSP contracts: SEK ‐14.9 million in 9M 2014, of which SEK ‐0.9 affected Q3 Establishment in Russia: SEK ‐11 m in 9M 2014, of which SEK ‐5 m affected Q3. Additional effects of

SEK ‐3 m expected in Q4

Negative effects by exchange rate fluctuation in translation of working capital at the closing rate Q3 of a net SEK ‐8.6 million (‐5.2). 9M of a net SEK ‐16.4 million (2.0).

Positive effect of 11,2 MSEK in Q3 as an insurance compensation for cost for machine repairment In Q3 start‐up volumes were prioritized on behalf of optimization. Optimization of new contracts will

continue, with good potential to gradually strengthen profitability

CASH FLOW

Strong growth and new volumes has tied up working capital in the first nine months. Guidance of approximately 20 percent of the increased estimated sales still valid


CASH FLOW STATEMENT, MSEK JAN ‐ SEP FULL YEAR

2014 2013 2013

Cash flow from operating activities before changes in working capital 112.5 73.3 126.0

Cash flow from operating activities ‐122.3 96.5 196.8

Cash flow from investing activities ‐116.7 ‐27.4 ‐66.2

Cash flow from financing activities ‐59.5 ‐39.1 ‐81.0

Cash flow for the period from continued operations ‐298.5 30.0 49.6

Cash flow for the period from discontinued operations 411.3 ‐1.3 ‐0.5

Cash flow for the period 112.8 28.7 49.1

Cash and cash equivalents at end of period 216.5 78.8 100.6

BALANCE SHEET

BALANCE SHEET, MSEK 30‐09‐2014 30‐09‐2013 31‐12‐2013ASSETS

Total fixed assets 641.1 731.5 807.8

Total current assets 1,208.7 1,241.7 1,285.8

Total assets 1,849.8 1,973.2 2,093.6

EQUITY AND LIABILITIES

Equity 1,256.7 1,042.9 1,103.5

Total non‐current liabilities 110.2 273.1 249.6

Total current liabilities 482.9 657.2 740.5

Total equity and liabilities 1,849.8 1,973.2 2,093.6

MSEK 2014‐09‐30 2013‐09‐30 2013‐12‐31

Net cash/Net debt, MSEK 79.1 ‐234.6 ‐188.7

The divestment of the Finnveden Metal Structures division has strengthened the Group’s financial position considerably

Net cash at SEK 79.1 million by the end of the quarter


KEY INDICATORS – CAPITAL STRUCTURE AND RETURN INDICATORS

THE GROUP 30‐09‐2014 2013‐09‐30 2013‐12‐31

CAPITAL STRUCTURE

Net debt/equity ratio, times 0.1 ‐0.2 ‐0.2

Equity/assets ratio, % 67.9 52.9 52.7

12 M ROLLING FULL YEAR

THE GROUP, 12 MONTHS OCT 2013‐SEP 2014

OCT 2012‐SEP 2013 2013

RETURN INDICATORS

Return on capital employed, % 9.5 7.0 8.1

Return on equity % 16.1 4.3 8.3

Return on equity, adjusted % 14.4 6.1 8.6

CAPITAL STRUCTURE

Capital turnover, times 1.6 2.2 2.2

Net cash/Net debt/EBITDA 0.5 ‐1.7 ‐1.2

Balance sheet not recalculated



FINANCIAL GUIDELINES

THE GROUP JAN – SEP 2014 GUIDELINES

Net Working Capital (% of sales) 24%* 20%

CAPEX as % of sales 6% 2‐3%

Depreciation as % of sales 2% 2‐3%

Tax rate 27,6% 27‐29%

Net Working capital slightly higher now due to the new business that has not been a part of the turnover for the whole period

Capex and depreciation mirrored by the high activity this year

Tax rate going forward is estimated to 27‐29%. The tax rate will fluctuate between quarters

* 12 M rolling, October – September 2014

3. GOING FORWARD

NEW LOGISTICS CENTER PLANNED IN POLAND

Volume increases mean higher loading in the factories. Bulten expects to handle them within the existing structure, but to prepare for future growth the company has decided to establish a new logistics centre in Poland

Premises for the new logistics centre will be rented and equipment will fall within the ordinary investment plan

Estimated operations start autumn 2015


START UP IN RUSSIA ACCORDING TO PLAN

The production in Russia has started with limited initial volumes in September but will increase gradually during the rest of the year

Establishment in Russia: SEK ‐11 m in 9M 2014, of which SEK ‐5 m affected Q3. Estimated additional costs of SEK ‐3 m in Q4

Continued strong interest from potential new customers

The Russian car market has been negatively affected as a result of the geopolitical uncertainty

Bulten’s operations in Russia account for a fraction of the Group total, but has a significant growth potential


FIRST NINE MONTHS OF 2014 IS CHARACTERIZED BY MANY ACTIVITIES AND HIGH PACE IN OPERATIONS

Production in Russia started in September

Decision on increased logistics facilities in Poland

Successful launches of both FSP contracts

Optimization ongoing

Bulten has received supplementary volumes from an existing customer with an annual value of approximately SEK 150 million at full production in 2016

Bulten has taken significant steps forward in the market and has created a high credibility in the automotive industry during the year


A QUALITY GROWTH COMPANY WITH PROVEN TRACK RECORD

ORGANIC GROWTH POTENTIAL

Continued path of gaining market share in Western Europe

Significant opportunities in emerging markets

Potential to widen related business long‐term – expansion of product lines and processes

SOLID FINANCES

Strong financial position

Current cash positions opens up for further growth initiatives Prospects of growth with solid operating margins


BULTEN – A STRONGER SOLUTION

APPENDIX

FINANCIAL OBJECTIVES

TARGETS Q3 2014ACTUAL

Q3 2013ACTUAL

12 M ROLLINGOCT 2013‐SEP 2014

FULL YEAR2013

ACTUAL

Sales growth Target to achieve a profitable organic growth in excess of the market growth on the Company’s respective markets.

36% 13% ‐‐ 5.5%

Sales growthCurrency adjusted

Target to achieve a profitable organic growth in excess of the market growth on the Company’s respective markets.

29% 10% ‐‐ 6.4%

EBIT margin Target to achieve an EBIT margin of at least 7%.

4.2% 4.5% 5.5% 6.0%

Return on capital employed (ROCE)

Target to achieve a ROCE exceeding 15%.

9.4% 8.1%

Dividend policy Bulten has a target to pay dividends corresponding to approximately 1/3 of net income after tax. Bulten'sfinancial position, cash flow and future prospects should however be considered.

48%SEK 2.00 per

share



FIVE LARGEST SHAREHOLDERS, 30 SEPTEMBER 2014

Owner No of shares Votes and capital (%)

Volito AB 4 300 000 20.4

ÖRESUND, INVESTMENT AB 1 457 359 6.9

Catella Fondförvaltning 1 390 537 6.6

JPM CHASE NA 736 487 3.5

SKANDINAVISKA ENSKILDA BANKEN S.A. 457 600 2.2

Source: Euroclear Sweden AB

nine months report, jan sep 2014mb.cision.com/main/405/9667661/303328.pdfto participate, please call...

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