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Gränges Earnings Release 2022
3055_ir_2022-07-15_b8e076dc-e3c7-41c8-9e37-d8c79f032f7f.pdf
Earnings Release
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HALF-YEAR REPORT 2022
All-time-high result despite very challenging environment
Second quarter 2022
- Sales volume decreased by 6.8 per cent to 122.5 ktonnes (131.4) and net sales increased to SEK 6,875 million (4,609).
- Adjusted operating profit increased to SEK 374 million (309) and adjusted operating profit per tonne was 3.1 kSEK (2.4).
- Profit for the period increased to SEK 295 million (226) and includes items affecting comparability of SEK 62 million (–).
- Diluted earnings per share increased to SEK 2.78 (2.12).
- Cash flow before financing activities adjusted for expansion investments and acquisitions was SEK 722 million (334).
- Total carbon emissions intensity (scope 1+2+3) decreased to 7.9 tonnes CO2 e/tonne (9.1).
- The share of sourced aluminium scrap increased to 35.4 per cent (26.9).
- Commitment to climate neutrality by 2040 and joining the Science-Based Target initiative.
- Launch of new sustainable product brand: Gränges Endure.
First half-year 2022
- Sales volume decreased by 3.4 per cent to 249.2 ktonnes (258.1) and net sales increased to SEK 12,955 million (8,651).
- Adjusted operating profit increased to SEK 732 million (651) and adjusted operating profit per tonne was 2.9 kSEK (2.5).
- Profit for the period increased to SEK 556 million (465) and includes items affecting comparability of SEK 62 million (–16).
- Diluted earnings per share increased to SEK 5.23 (4.36).
- Cash flow before financing activities adjusted for expansion investments and acquisitions was SEK –502 million (279).
- Financial net debt2 increased to SEK 4,396 million at 30 June 2022 (SEK 3,059 million at 31 December 2021), corresponding to 2.3 times adjusted EBITDA (1.8 times at 31 December 2021).
- Total carbon emissions intensity (scope 1+2+3) decreased to 8.4 tonnes CO2 e/tonne (9.5).
- The share of sourced aluminium scrap increased to 33.2 per cent (26.3).
| 12 months rolling |
||||||||
|---|---|---|---|---|---|---|---|---|
| Financial summary | Q2 | Jan–Jun | Full year | |||||
| Jul 2021– | ||||||||
| SEK million | 2022 | 2021 | 2022 | 2021 | Jun 2022 | 2021 | ||
| Sales volume, ktonnes | 122.5 | 131.4 | –6.8% | 249.2 | 258.1 | –3.4% | 480.0 | 488.9 |
| Net sales | 6,875 | 4,609 | 49.2% | 12,955 | 8,651 | 49.7% | 22,433 | 18,130 |
| Adjusted operating profit 1 | 374 | 309 | 21.1% | 732 | 651 | 12.4% | 1,089 | 1,008 |
| Adjusted operating profit per tonne, kSEK | 3.1 | 2.4 | 0.7 | 2.9 | 2.5 | 0.4 | 2.3 | 2.1 |
| Operating profit | 436 | 309 | 41.2% | 794 | 635 | 25.0% | 992 | 833 |
| Profit for the period | 295 | 226 | 30.8% | 556 | 465 | 19.7% | 687 | 595 |
| Earnings per share diluted, SEK | 2.78 | 2.12 | 0.66 | 5.23 | 4.36 | 0.87 | 6.46 | 5.58 |
| Adjusted cash flow before financing activities3 | 722 | 334 | 116.5% | –502 | 279 | n/a | –173 | 607 |
| Financial net debt2 | – | – | – | 4,396 | 2,967 | 1,429 | 4,396 | 3,059 |
| Financial net debt/Adjusted EBITDA1 | – | – | – | – | – | – | 2.3 | 1.8 |
| Return on capital employed, % | – | – | – | – | – | – | 9.7 | 10.0 |
1 Adjusted for items affecting comparability, see Note 5 for further information.
2 Adjusted for lease liabilities, see alternative performance measures for further information.
3 Adjusted for expansion investments and acquisitions, see alternative performance measures for further information.
COMMENTS BY THE CEO
Continued improvement promising start to long-term plan
SAFETY IS OUR FIRST PRIORITY
Gränges is systematically working on improving workplace safety. However, we suffered two serious setbacks in the second quarter: a tragic fatal accident in our Salisbury facility, and a serious fire in the Konin plant. We clearly need to intensify our work to develop Gränges toward industry-leading safety performance and are taking action accordingly.
SOLID RESULT DESPITE VERY CHALLENGING ENVIRONMENT
In the second quarter, we saw strong demand in most end-customer markets, but also continued weakness in the automotive market. Despite the severe COVID-19-related lockdowns in China, the sales volume reached 93 per cent of sales volume in the second quarter last year.
Nevertheless, Gränges delivered a solid result. This did not happen by accident but was the result of systematic and focused efforts. The way our team in China succeeded to manufacture and ship products throughout the extended Shanghai lockdown was especially impressive. But equally important for the result was the work in all regions to offset the automotive weakness with sales to other segments, and increased costs with improved productivity and price increases.
As a result, Gränges recorded an adjusted operating profit of SEK 374 million, 21 per cent higher than last year, despite lower sales volume. In fact, the profit is our strongest one ever in a single quarter. The improvement is a very important step in the right direction.
VERY STRONG SUSTAINABILITY PERFORMANCE AND RAISED AMBITION LEVEL
We're very proud of our sustainability performance in 2022 so far. Our relentless focus on reducing our environmental impact led to a 14 per cent reduction in the carbon emissions intensity in the quarter. This in turn
depended on good progress toward creating a more circular value
chain, as evidenced by a sharp increase in the share of recycled aluminium we source and use – from 27 per cent to 35 per cent. Recycling is now quite an important part of our business model, which we pursue in partnership with our customers and suppliers. We're also excited about our new sustainable product brand Gränges Endure, which will help our customers on their decarbonization journeys.
It's important that our strong performance does not lead to complacency. We will continue to improve against our ambitious 2025 targets. In addition, we have committed to climate neutrality in 2040, and underlined this by joining the Science-Based Targets initiative.
Cont. on next page
Quarterly sales volume Quarterly adjusted operating profit
Cont. from previous page
UNCERTAIN SHORT-TERM MARKET OUTLOOK
The short-term market outlook remains uncertain. Price increases, increasing interest rates and increased inflation expectations are likely to influence consumer demand negatively. This would in turn impact most industries, including Gränges and our customers.
The recent fall in raw material and energy prices, are further signs of lower demand ahead, but are also positive for our cost position and cash flow. On the other hand, we have as of yet seen few concrete signs of sequentially weakening demand, and are therefore relatively optimistic going into the third quarter.
In this environment, we need to be prepared for a weaker consumer demand. We also need continued focus on flexibility, and on improving the factors we can influence directly, such as mix, price, productivity and fixed cost.
LONG-TERM PLAN NOW IN PLACE
In the face of short-term uncertainty, a long-term plan gives focus, direction and a sense of purpose. During the quarter, Gränges announced the long-term Navigate plan for sustainable growth. It has three steps: to restore profitability, to build a world-leading aluminium technology company, and to invest in sustainable growth.
The plan aims to capitalize on our major investments in recent years, and to benefit from the regionalization of supply chains, the electric vehicle revolution and customer demands for more sustainable solutions. We aim for a return to 15 per cent return on capital and 10 per cent yearly profit growth as soon as possible.
We also aim to build an even stronger and more sustainable company for the future. More information about the Navigate plan is found on page 4.
STRONG TEAM, HIGH AMBITION LEVEL
Like all companies, Gränges depends on the outside world, and currently the outside world is very uncertain. But Gränges can also rely on strong teams in all three regions. Those teams have themselves set and are committed to the ambitious Navigate targets for growth, profitability and sustainability. For the rest of 2022, our ambition is to keep our market share and to continue year-on-year margin and sustainability improvements.
Our performance so far shows that this is possible. I have strong confidence in our ability to deliver strong results also going forward, both short-term and long-term.
It gives me great pleasure to be able to again present an all-time-high financial result and good progress against our sustainability targets, thanks to the outstanding efforts of our global team.
Jörgen Rosengren President and CEO
- With our focus on sustainable growth, we intend to make a real difference, and to build a stronger, better-performing and more sustainable company for the future, says Jörgen Rosengren, President and CEO, Gränges.
NEW LONG-TERM PLAN FOR SUSTAINABLE GROWTH
Gränges has established a new long-term plan for sustainable growth involving three steps: to restore profitability, to build a world-leading aluminium technology company, and to invest in sustainable growth. The first priority is to restore profitability and to normalize leverage. In this phase, Gränges also aims at a step change improvement of the safety performance.
In parallel, Gränges will launch an ambitious program 2022–2025 to build a world-leading aluminium technology company in terms of people and sustainability, safety and profitability, innovation and growth. Finally, Gränges will start to invest in sustainable growth, with a focus on the period 2024–2030. The new plan also targets continued fast progress toward climate neutrality by 2040.
NEW LONG-TERM TARGETS
As a result of the new long-term plan, Gränges has also updated its long-term financial targets. The new targets are:
• Profitability: 15 per cent
Return on capital employed above 15 per cent.
- Profit growth: 10 per cent Average yearly operating profit growth above 10 per cent.
- Leverage: 1–2 times EBITDA Financial net debt normally between 1–2 times adjusted EBITDA.
- Dividend: 30–50 per cent Dividend between 30–50 per cent of profit for the year.
Since 2019, Gränges has also externally communicated ambitious sustainability targets for 2025, including the following prioritized targets:
- Carbon emissions intensity (scope 1+2): –25 per cent vs. 2017. Reduce carbon emissions intensity from own operations and purchased energy (scope 1+2) by 25 per cent versus baseline 2017.
- Carbon emissions intensity (scope 3): –30 per cent vs. 2017. Reduce carbon emissions intensity from sourced metal inputs (scope 3) by 30 per cent versus baseline 2017.
- Share of sourced aluminium scrap: at least 30 per cent. Increase the share of sourced aluminium scrap to at least 30 per cent of total sourced metal inputs.
These targets have now been complemented with a commitment to climate neutrality by 2040.
Build a world-leading aluminium technology company – Business model
MARKET DEVELOPMENT
Gränges is an aluminium technology company and a leading global supplier of rolled aluminium products and solutions for thermal management systems, speciality packaging and selected niche applications. Gränges' key end-customer markets are Automotive currently representing 37 per cent, HVAC representing 22 per cent, Speciality packaging and Other niches representing 18 per cent and 23 per cent respectively of sales volume for the last 12 months. Short-term sales to the a utomotive industry is primarily driven by the number of vehicles produced. Medium and long term, the increasing share of electric vehicles is expected to have a further positive impact on demand for Gränges' products. Sales to the HVAC industry are influenced in the short-term by consumer confidence and the general activity within building and construction, whereas increased requirements on energy efficiency of HVAC units are expected to have a further positive impact on the demand for Gränges' products in the medium and long term. The demand for materials for Speciality packaging is relatively stable in its nature and sales to Other niche applications are largely driven by the general economic activity.
In the second quarter of 2022, demand remained strong in most of Gränges' end-customer markets, except for Automotive. Sales to automotive customers decreased by 11 per cent compared with the same quarter last year, primarily due to COVID-19 lockdown in China which affected both market demand as well as Gränges' production output and sales from the Shanghai facility. In addition, high inventory levels in primarily Americas also had a negative impact on sales to Automotive customers in the quarter. Due to a temporary stop of the Salisbury facility in the month of June, sales of HVAC materials decreased by 5 per cent in the second quarter of 2022 despite the continued good market demand. For the same reason sales of Speciality packaging materials and sales to Other niches decreased by 6 per cent and 2 per cent respectively in the second quarter.
SALES DEVELOPMENT
Gränges' sales volume in the second quarter of 2022 decreased by 6.8 per cent to 122.5 ktonnes (131.4) while net sales increased by 49 per cent to SEK 6,875 million (4,609) compared to the same quarter previous year. The increase in net sales is driven by a higher average fabrication price in combination with an increased aluminium price. In addition, the net sales includes other revenue of SEK 107 million related to insurance compensation for the fire in the Konin facility in the quarter. Changes in foreign exchange rates had a net positive effect of SEK 697 million.
For Gränges Americas, external sales volume decreased by 7.6 per cent to 63.8 ktonnes (69.0) but external net sales rose to SEK 3,698 million (2,425) in the second quarter of 2022. The decrease in sales volume was primarily driven by the weak Automotive market and the temporary stop of the Salisbury facility. Changes in foreign exchange rates had a net positive effect on net sales of SEK 570 million.
For Gränges Eurasia, external sales volume decreased by 5.9 per cent to 58.7 ktonnes (62.4) while external net sales rose to SEK 3,177 million (2,184) in the second quarter of 2022. The decrease in sales volume was primarily driven by the COVID-19 lockdown in China and the weak Automotive market. Demand for Speciality packaging declined as one customer was directly impacted by the war in Ukraine, while demand for Other niche applications remained stable in the quarter. Changes in foreign exchange rates had a net positive effect on net sales of SEK 128 million.
During January–June 2022, Gränges' sales volume decreased by 3.4 per cent to 249.2 ktonnes (258.1) compared to the corresponding period previous year. Net sales amounted to SEK 12,955 million (8,651). Changes in foreign exchange rates had a net positive effect on net sales of SEK 1,122 million.
For Gränges Americas, sales volume decreased to 127.8 ktonnes (131.7) and net sales rose to SEK 6,885 million (4,441) for the first half-year of 2022. For Gränges Eurasia, sales volume decreased to 134.4 ktonnes (143.6) and net sales rose to SEK 6,740 million (4,821).
OPERATING PROFIT
Adjusted operating profit for the second quarter of 2022 increased to SEK 374 million (309), corresponding to adjusted operating profit per tonne of 3.1 kSEK (2.4). Adjusted operating margin was 5.4 per cent (6.7). The increase in adjusted operating profit was primarily driven by increased average fabrication price which offset the lower sales volume and the continued high external cost inflation. The impact of the fire in the Konin facility was neutral in the quarter as the income from insurance compensation was offset by impairment of damaged assets. Changes in foreign exchange rates had a net positive impact of SEK 22 million in the quarter.
Operating profit for the second quarter of 2022 increased to SEK 436 million (309) and includes items affecting comparability of SEK 62 million (–) related to the final insurance settlement for a fire in a mill in the US. For further information see Note 5.
During the period January–June 2022, adjusted operating profit amounted to SEK 732 million (651), and adjusted operating profit per tonne was 2.9 kSEK (2.5). Adjusted operating margin was
External sales volume growth Q2 2022
End-customer Automotive HVAC Speciality packaging Other niches Total Gränges Americas –19% –5% –4% –8% –8% Gränges Eurasia –8% – – –14% 1% –6% Total –11% –5% –6% –2% –7%
5.6 per cent (7.5). Changes in foreign exchange rates had a net positive impact of SEK 44 million in the first half-year of 2022. Operating profit during January–June 2022 amounted to SEK 794 million (635) and includes items affecting comparability of SEK 62 million (–16). For further information see Note 5.
PROFIT FOR THE PERIOD AND EARNINGS PER SHARE
Profit before tax for the second quarter of 2022 increased to SEK 380 million (287). Finance income and costs was SEK –56 million (–22). The increase in finance costs is related to a higher financial net debt and higher market interest rates. Income tax for the second quarter of 2022 was SEK –85 million (–62) which corresponds to an effective tax rate of 22 per cent (21). The profit for the period increased to SEK 295 million (226) during the second quarter of 2022 and diluted earnings per share rose to SEK 2.78 (2.12).
For the period January–June 2022, profit before tax increased to SEK 712 million (591). Finance income and costs was SEK –83 million (–45). Income tax for the period was SEK –156 million (–127) which corresponds to an effective tax rate of 22 per cent (21). The profit for the period increased to SEK 556 million (465) and diluted earnings per share rose to SEK 5.23 (4.36).
CASH FLOW
Cash flow from operating activities was SEK 793 million (395) in the second quarter of 2022. Working capital and other items impacted cash flow positively with SEK 104 million. Cash flow from investing activities fully relates to capital expenditure and amounted to SEK –218 million (–156) in the quarter. Of this, SEK 71 million refers to investments to maintain and improve efficiency in current production facilities and SEK 147 million refers to investments related to the expansion of the production facilities.
Cash flow before financing adjusted for expansion investments and acquisitions amounted to SEK 722 million (333) in the second quarter of 2022. Cash flow from financing activities was SEK –84 million (169) in the second quarter of 2022 and includes a dividend payment of SEK –239 million as resolved by Gränges'
12 months rolling sales volume per end-customer
Automotive 37% HVAC 22%
Speciality packaging 18%
Other niches 23%
2022 Annual General Meeting, new loans of SEK 2,493 million and repayment of loans of SEK –2,291 million.
During January–June 2022, cash flow from operating activities was SEK –346 million (392). Cash flow from investing activities fully relates to capital expenditure and amounted to SEK –372 million (–402) in the period. Of this, SEK 155 million relates to investments to maintain and improve efficiency in current production facilities and SEK 217 million refers to investments related to the expansion of the production facilities.
During January–June 2022 cash flow before financing activities amounted to SEK –719 million (–10). Cash flow from financing activities was SEK 1,031 million (–477) during the first half-year and includes a dividend payment of SEK –239 million, new loans of SEK 7,220 million and repayment of loans of SEK –5,883 million.
Cash and cash equivalents amounted to SEK 1,195 million at 30 June 2022 (SEK 809 million 31 December 2021).
FINANCIAL POSITION
Gränges' total assets amounted to SEK 19,324 million at 30 June 2022 (SEK 15,767 million at 31 December 2021). The equity to assets ratio was 41.5 per cent at 30 June 2022 (44.0 per cent at 31 December 2021).
Financial net debt was SEK 4,396 million at 30 June 2022 (SEK 3,059 million at 31 December 2021), corresponding to 2.3 times adjusted EBITDA (1.8 times at 31 December 2021).
EMPLOYEES
The average number of employees was 2,712 (2,645) in the second quarter and 2,699 (2,624) for the first half-year of 2022.
PARENT COMPANY
Gränges AB is the parent company of the Gränges Group. The operations include Group Management and Group functions such as finance, treasury, sustainability and communication. For the first half-year of 2022, net sales in the parent company was SEK 61 million (59). Result for the period January–June was –38 MSEK (–35).
Quarterly adjusted operating profit
GRÄNGES AMERICAS
- Continued strong market conditions except in Automotive
- Price increases fully compensated for cost increases
- All-time high operating profit
MARKET AND SALES
Gränges Americas experienced a continued strong demand from HVAC and Speciality packaging customers in the second quarter of 2022, while demand from Automotive customers continued to slow down due to continued supply chain disruptions and high inventory at customer level. A temporary stop of the Salisbury facility in the month of June had a negative impact on the sales volume in the quarter. The sales volume in the second quarter decreased by 7.5 per cent to 63.8 ktonnes (69.0) while net sales rose to SEK 3,692 million (2,426) compared with the same quarter last year. The increase in net sales is driven by a higher average fabrication price in combination with an increased aluminium price. During January–June the sales volume decreased by 3.0 per cent to 127.8 ktonnes (131.7).
OPERATING PROFIT
The adjusted operating profit for the second quarter 2022 increased to SEK 270 million (219), which is the highest operating profit in an individual quarter so far. This corresponds to an adjusted operating profit per tonne of 4.2 kSEK (3.2). The increase in adjusted operating profit was primarily driven by an increased average fabrication price that offset the lower sales volume and the continued high external cost inflation during the quarter. Net changes in foreign exchange rates had a positive impact of SEK 40 million in the quarter. During January–June the adjusted operating profit increased to SEK 522 million (410). By June 30, the return on capital employed was 17.0 per cent (17.2) on a rolling 12-months basis.
FATAL ACCIDENT IN SALISBURY
On June 2, an employee at the Salisbury facility passed away after being involved in a workplace forklift accident. The Salisbury facility was temporary stopped while the accident was investigated and before it could be determined that it was safe to restart work. The facility was restarted in July and the temporary stop led to a reduction of sales volume in the second quarter. Increasing the workplace safety is a stated objective of Gränges strategy and the efforts in this area are being further increased in view of this accident.
Sales volume
Adjusted operating profit
Financial summary
| 12 months | ||||||||
|---|---|---|---|---|---|---|---|---|
| Q2 | Jan–Jun | rolling | Full year | |||||
| Jun 2021– | ||||||||
| SEK million | 2022 | 2021 | 2022 | 2021 | Jul 2022 | 2021 | ||
| Sales volume external, ktonnes | 63.8 | 69.0 | –7.5% | 127.8 | 131.7 | –3.0% | 248.4 | 252.4 |
| Sales volume internal, ktonnes | – | – | – | – | – | – | – | – |
| Total sales volume, ktonnes | 63.8 | 69.0 | –7.5% | 127.8 | 131.7 | –3.0% | 248.4 | 252.4 |
| Net sales, external | 3,698 | 2,425 | 52.5% | 6,904 | 4,437 | 55.6% | 11,968 | 9,502 |
| Net sales, internal | –6 | 1 | n/a | -19 | 4 | n/a | –37 | –14 |
| Total net sales | 3,692 | 2,426 | 52.2% | 6,885 | 4,441 | 55.0% | 11,932 | 9,488 |
| Adjusted operating profit | 270 | 219 | 23.5% | 522 | 410 | 27.3% | 767 | 655 |
| Operating profit | 332 | 219 | 51.8% | 584 | 410 | 42.4% | 865 | 691 |
| Adjusted operating profit per tonne, kSEK | 4.2 | 3.2 | 33.5% | 4.1 | 3.1 | 31.2% | 3.1 | 2.6 |
| Return on capital employed, % | – | – | – | – | – | – | 17.0 | 16.9 |
GRÄNGES EURASIA
- Challenging quarter due to COVID-19 lock-down in China
- Continued good market conditions except in Automotive
- Price increases increasingly compensating for cost increases
MARKET AND SALES
Gränges Eurasia experienced a continued slow-down of demand from Automotive customers in the second quarter of 2022, due to continued shortage of components and further supply chain disruptions due the outbreak of COVID-19 in China. Demand in other end-customer markets remained good and the decline in Automotive sales was partly offset by increased sales to Other niches. As a consequence of the COVID-19 outbreak the Gränges production facility in Shanghai was in lock-down during April-May reducing the production output and negatively impacting the sales volume in the second quarter. The sales volume in the second quarter reached 66.1 ktonnes (70.4), which represents a 6.1 per cent decline compared with the second quarter last year. Net sales increased by 45 per cent to SEK 3,593 million (2,482) compared to the same quarter previous year. The increase in net sales is driven by a higher average fabrication price in combination with an increased aluminium price. During January-June the sales volume decreased by 6.4 per cent to 134.4 ktonnes (143.6).
OPERATING PROFIT
The adjusted operating profit for the second quarter 2022 increased to SEK 172 million (136), corresponding to an adjusted operating profit per tonne of 2.6 kSEK (1.9). The increase in adjusted operating profit was primarily driven by increased average fabrication price that offset the lower sales volume and the continued high external cost inflation during the quarter. Net changes in foreign exchange rates had a negative impact of SEK -18 million in the quarter. During January-June the adjusted operating profit decreased to SEK 306 million (329). By 30 June, the return on capital employed was 5.9 per cent (9.0) on a rolling 12-months basis.
FIRE IN KONIN COLD ROLLING MILL
On May 13, there was a fire in a new cold rolling mill under commissioning in the Konin facility. The investigation of the cause of the
fire and options to restore capacity is ongoing. The damaged mill is currently expected to take about one year to rebuild or replace and during this time, the Konin facility will continue to operate with the existing cold rolling mills. This means that the ramp-up of production capacity originally planned for the second half of 2022 will be delayed at least one year. The damage to the mill is covered by insurance and currently no further cost for this is expected going forward.
Sales volume
Adjusted operating profit
Financial summary
| 12 months | |||||||
|---|---|---|---|---|---|---|---|
| Q2 | rolling | Full year | |||||
| Jun 2021– | |||||||
| 2022 | 2021 | 2022 | 2021 | Jul 2022 | 2021 | ||
| 58.7 | 62.4 | –5.9% | 121.5 | 126.4 | –3.9% | 231.7 | 236.6 |
| 7.4 | 8.0 | –8.2% | 12.9 | 17.2 | –25.3% | 22.5 | 26.9 |
| 66.1 | 70.4 | –6.1% | 134.4 | 143.6 | –6.4% | 254.2 | 263.5 |
| 3,177 | 2,184 | 45.5% | 6,051 | 4,212 | 43.7% | 10,466 | 8,627 |
| 416 | 298 | 39.5% | 689 | 609 | 13.1% | 1,100 | 1,021 |
| 3,593 | 2,482 | 44.8% | 6,740 | 4,821 | 39.8% | 11,567 | 9,648 |
| 172 | 136 | 26.3% | 306 | 329 | –6.9% | 423 | 446 |
| 172 | 136 | 26.3% | 306 | 313 | –2.2% | 273 | 280 |
| 2.6 | 1.9 | 34.5% | 2.3 | 2.3 | –0.5% | 1.7 | 1.7 |
| – | – | – | – | – | – | 5.9 | 6.8 |
| Jan–Jun |
SUSTAINABILITY
- Continued focus on decarbonizing Gränges' business and value chain, with a decreased total carbon footprint
- Increased sourcing of aluminium scrap replacing primary aluminium as input material
- Commitment to climate neutrality by 2040 and joining the Science-Based Targets initiative
EMISSIONS AND CLIMATE IMPACT
Gränges' total carbon emissions intensity (scope 1+2+3) for the second quarter 2022 decreased by 14 per cent to 7.9 tonnes CO2e/tonne (9.1). During the last rolling 12 months, total carbon emissions intensity decreased to 7.7 tonnes CO2 e/tonne, a reduction of 33 per cent compared to baseline 2017. Carbon emissions intensity from own operations and purchased energy (scope 1+2) amounted to 0.83 tonnes CO2 e/tonne (0.81). The increase was mainly driven by an increased energy intensity as a result of reduced sales in Gränges Eurasia, partly caused by the effects from the COVID-19 outbreak in Shanghai. Carbon e missions intensity from sourced metal inputs (scope 3) decreased by 15 per cent to 7.0 tonnes CO2 e/tonne (8.3), driven by increased use of aluminium scrap.
RECYCLING AND CIRCULARITY
The share of sourced aluminium scrap increased by 8.5 percentage points to 35.4 per cent (26.9) of total sourced metal inputs in the second quarter. The main reason was successful projects to replace primary aluminium with aluminium scrap, mainly in Gränges Americas. During the last rolling 12 months, the share of sourced aluminium scrap increased by 20.5 percentage points to 31.9 per cent compared to baseline 2017. Total volume of sourced aluminium scrap amounted to 45.9 ktonnes (37.0).
CLIMATE NEUTRALITY BY 2040 AND COMMITMENT TO SBTI
In June 2022, Gränges announced its commitment to climate neutrality by 2040. As part of this, the company joined the Science Based Targets initiative (SBTi), committing to set science-based targets in line with the goals of the Paris Agreement. Joining the SBTi demonstrates Gränges' strong sustainability commitment and dedication to reduce the climate impact from its business and along the value chain.
NEW SUSTAINABLE PRODUCT BRAND: GRÄNGES ENDURE
In June 2022, Gränges launched a product brand for sustainable and circular solutions, Gränges Endure. Gränges Endure products have a third-party verified carbon footprint of no more than 4.0 tonnes CO2 e/tonne, measured from extraction of bauxite to the delivery of Gränges' products to customers (cradle-to-gate). The products are also verified by a third party to be responsibly sourced and produced. The brand makes it easier for customers to select sustainable aluminium products and solutions of the highest quality at the lowest sustainability impact.
Carbon emissions intensity
tCO2 e/tonne
Sourced aluminium scrap
Share of sourced aluminium scrap
Sustainability performance
| Q2 | Jan–Jun | 12 months rolling |
Full year |
Baseline | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Sustainability metrics2 | 2022 | 2021 | 2022 | 2021 | Jul 2021– Jun 2022 |
2021 | 2017 | |||
| Total carbon emissions intensity (scope 1+2+3), tonnes CO2 e/tonne |
7.9 | 9.1 | –14% | 8.4 | 9.5 | –12% | 7.7 | 9.3 | 11.4 | –33 % |
| Carbon emissions intensity (scope 1+2), tonnes CO2 e/tonne |
0.83 | 0.81 | 2% | 0.86 | 0.85 | 2% | 0.72 | 0.88 | 0.96 | –24% |
| Carbon emissions intensity (scope 3), tonnes CO2 e/tonne |
7.0 | 8.3 | –15% | 7.5 | 8.7 | –13% | 6.0 | 8.4 | 10.5 | –43% |
| Sourced aluminium scrap, % | 35.4 | 26.9 | 8.5 ppt | 33.2 | 26.3 | 6.9ppt | 31.9 | 28.5 | 11.5 | 20.5 ppt |
1 Quarterly data for baseline 2017 not available.
2 Quarterly data may be adjusted in the year-end report when annual emission factors have been confirmed. Scope 2 data is calculated with a market-based approach. Baseline 2017 is recalculated to include Gränges Konin for carbon emissions intensity data.
SIGNIFICANT EVENTS DURING THE PERIOD
- On 13 April, Gränges announced that the company will invest USD 52 million to expand its recycling and casting operations in Huntingdon, Tennessee. The investment will enable near-zero carbon aluminium solutions to meet the growing demand for sustainable products in North America.
- On 2 May, Gränges communicated that the company will expand its production facility in Newport, Arkansas and becomes the first domestic producer of battery cathode foil in the US.
- On 13 May, there was a fire in a new cold rolling mill under commissioning in the Konin facility. No injuries, but the fire resulted in damage on production equipment. The property damage is covered by insurance.
- On 20 June, Gränges announced continued good momentum in the second quarter and provided an updated outlook.
- On 20 June, Gränges announced a commitment to climate neutrality by 2040 and joining the Science-Based Targets initiative.
- On 21 June, Gränges launched Gränges Endure, a product brand for sustainable and circular solutions.
- On 21 June, Gränges held its Capital Markets Day, presenting a new long-term plan for sustainable growth and updated targets. The webcast of the day is available on the company's website.
SIGNIFICANT EVENTS AFTER THE PERIOD
No significant events have occurred after the period.
THE SHARE
The share capital in Gränges amounts to SEK 142 million split on 106,308,618 shares, each with a quota value of SEK 1.339775.
Gränges has only one class of shares.
OWNERSHIP STRUCTURE
The number of shareholders in Gränges was 11,984 at 30 June 2022, according to Euroclear.
Largest shareholders in Gränges at 30 June 2022¹
| Number of | Share of capital | |
|---|---|---|
| Shareholder | shares | and votes % |
| Fourth Sw. National Pension Fund | 9,864,534 | 9.3 |
| Swedbank Robur Funds | 6,572,177 | 6.2 |
| AFA Insurance | 6,561,892 | 6.2 |
| Handelsbanken Funds | 4,565,014 | 4.3 |
| Dimensional Fund Advisors | 4,490,107 | 4.2 |
| Vanguard | 3,498,833 | 3.3 |
| T. Rowe Price | 2,973,361 | 2.8 |
| Norges Bank | 2,536,723 | 2.4 |
| Columbia Threadneedle | 2,525,937 | 2.4 |
| Allianz Global Investors | 2,518,021 | 2.4 |
| Total 10 largest shareholders | 46,106,599 | 43.4 |
| Other | 60,202,019 | 56.6 |
| Total | 106,308,618 | 100 |
¹ Source: Modular Finance.
Gränges Endure is a new product brand for sustainable and circular solutions. These products are based on low-carbon and recycled input materials. Gränges Endure makes it easier for customers to select sustainable aluminium products and solutions of the highest quality at the lowest sustainability impact.
OTHER
Annual General Meeting 2022
Gränges AB held its Annual General Meeting (AGM) on Wednesday 4 May 2022. The AGM elected Steven Armstrong, and re-elected Fredrik Arp, Mats Backman, Martina Buchhauser, Peter Carlsson, Katarina Lindström and Hans Porat as Board members. Carina Andersson had declined re-election. The AGM re-elected Fredrik Arp as the Chairman of the Board of Directors.
The AGM resolved, in accordance with the Board of Directors' proposal, on a dividend of SEK 2.25 (1.10) per share, in total SEK 239 MSEK (117), corresponding to 40 per cent of the profit of the year 2021. The dividend was paid out on 11 May 2022.
Further, the AGM resolved, in accordance with the Board of Directors' proposal, that the Board of Directors is authorized to, at one or more occasions until the next AGM, issue new shares and/or convertible bonds up to 10 per cent of the total outstanding shares in Gränges on the date of the authorization resolution. An issue can be decided with or without regard to shareholders' pre-emption rights.
The AGM also resolved, in accordance with the Board of Directors' proposal, on a long-term incentive programme, LTI 2022. The programme will run for three years and will be offered to senior managers as a supplement to the annual incentive programme ("STI 2022"). Further, the AGM resolved, in accordance with the Board of Directors' proposal, on the adoption of IP 2022 whereby 900,000 warrants were issued free of charge to the company, which subsequently transferred the warrants to senior managers and a number of other key individuals in the group. Upon the acquisition of the warrants a market-based premium was paid.
More information on the resolutions on the AGM and the content in them are available on the company's website, www.granges.com
RISKS AND UNCERTAINTY FACTORS
As a global group with operations in different parts of the world, Gränges is exposed to various risks and uncertainties such as raw material price risk, market risk, operational, geopolitical and legal risk, as well as financial risks related to foreign exchange rates, interest rates, liquidity and refinancing. Gränges' risk management process entails to identify, assess and reduce risks related to the Group's business and operations. More information about risk management is available on pages 47–52 in Gränges' 2021 Annual and Sustainability Report.
SEASONAL VARIATIONS
Gränges' customers are found in the automotive industry, the HVAC industry, the packaging industry, as well as in many other niche markets. Gränges' sales to the automotive industry is highly correlated with the production of light vehicles. Sales to the HVAC industry are impacted by factors such as construction investments, new regulations for energy efficiency and climate impact, and it is usually higher during the summer period driven by a seasonally higher demand for cooling systems. Sales to the packaging and other industries are fairly stable throughout the year. Major annual maintenance work in Gränges' production facilities mainly occurs in the fourth quarter. Overall, the fourth quarter is usually the weakest quarter and the second quarter usually the strongest quarter of the year.
The Board of Directors and the President and CEO declare that the half-year report gives a true and fair view of the performance of the business, financial position and result of operations of the parent company and the Group, and describes the principal risks and uncertainties that the parent company and its subsidiaries are facing.
Stockholm, 15 July, 2022 The Board of Directors of Gränges AB (publ)
Fredrik Arp Chairman of the Board
Steven Armstrong Member of the Board
Mats Backman Member of the Board Martina Buchhauser Member of the Board
Peter Carlsson Member of the Board
Katarina Lindström Member of the Board
Hans Porat Member of the Board
Isabelle Jonsson Employee representative
Konny Svensson Employee representative
Jörgen Rosengren President and Chief Executive Officer
This half-year report has not been reviewed by the auditors of the company.
For additional information, please contact:
Oskar Hellström, CFO and Deputy CEO Email: [email protected] Phone: +46 8 459 59 00
Lukas Östman, IR Coordinator Email: [email protected] Phone: +46 72 224 39 87
This information is information that Gränges AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, on Friday 15 July 2022 at 07.30 CEST.
Webcasted telephone conference
CEO Jörgen Rosengren and CFO Oskar Hellström will present Gränges' half-year report 2022 at a webcasted conference call at 10.00 CEST, Friday 15 July, 2022.
The webcast is available on www.granges.com/investors. To participate in the conference call, please call +46 8 5664 2651 (Sweden), +44 3333 000 804 (United Kingdom) or +1 631 913 1422 (United States). PIN code: 6978 8601#. Please call a few minutes before the conference call starts. The presentation will be in English.
Financial calendar
| 20 October, 2022 | Interim Report, January–September 2022 |
|---|---|
| 26 January, 2023 | Year-end Report 2022 |
| 27 April, 2023 | Interim Report, January-March 2023 |
| 27 April, 2023 | Annual General Meeting 2023 |
CONSOLIDATED INCOME STATEMENT (CONDENSED)
| SEK million | Note | Apr–Jun 2022 |
Apr–Jun 2021 |
Jan–Jun 2022 |
Jan–Jun 2021 |
Jan–Dec 2021 |
|---|---|---|---|---|---|---|
| Net sales | 2 | 6,875 | 4,609 | 12,955 | 8,651 | 18,130 |
| Cost of materials | 5 | –4,852 | –3,112 | –9,196 | –5,7121 | –12,4431 |
| Payroll and other operating expenses | –1,361 | –1,028 | –2,568 | –1,988 | –4,016 | |
| Depreciation, amortization and impairment charges | –289 | –159 | –459 | –316 | –678 | |
| Items affecting comparability | 5 | 62 | – | 62 | – | –159 |
| Operating profit | 436 | 309 | 794 | 635 | 833 | |
| Profit or loss from joint ventures | 4 | 1 | 1 | 1 | 1 | 2 |
| Finance income and costs | –56 | –22 | –83 | –45 | –92 | |
| Profit before tax | 380 | 287 | 712 | 591 | 743 | |
| Income tax | 6 | –85 | –62 | –156 | –127 | –147 |
| Profit for the period | 295 | 226 | 556 | 465 | 595 | |
| Profit for the period attributable to | ||||||
| – owners of the parent company | 295 | 226 | 556 | 465 | 595 | |
| – non-controlling interests | 0 | 0 | 0 | 0 | 0 | |
| Earnings per share | ||||||
| Earnings per share basic, SEK | 2.78 | 2.12 | 5.23 | 4.37 | 5.60 | |
| Earnings per share diluted, SEK | 2.78 | 2.12 | 5.23 | 4.36 | 5.58 |
1 Includes items affecting comparability of SEK –16 million, see Note 5 for further information.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (CONDENSED)
| SEK million | Apr–Jun 2022 |
Apr–Jun 2021 |
Jan–Jun 2022 |
Jan–Jun 2021 |
Jan–Dec 2021 |
|---|---|---|---|---|---|
| Profit for the period | 295 | 226 | 556 | 465 | 595 |
| Items not to be reclassified to profit/loss in subsequent periods | |||||
| Remeasurement of pensions after tax | 89 | 28 | 89 | 25 | 17 |
| Items to be reclassified to profit/loss in subsequent periods | |||||
| Change in hedging reserve after tax | 204 | 14 | 112 | –58 | –88 |
| Translation effects | 422 | –31 | 569 | 173 | 466 |
| Comprehensive Income for the period | 1,010 | 237 | 1,326 | 605 | 990 |
| Comprehensive income for the period attributable to |
|||||
| – owners of the parent company | 1,010 | 237 | 1,326 | 605 | 990 |
| – non-controlling interests | 0 | 0 | 0 | 0 | 0 |
CONSOLIDATED BALANCE SHEET (CONDENSED)
| SEK million | Note | 30 Jun 2022 | 30 Jun 2021 | 31 Dec 2021 |
|---|---|---|---|---|
| ASSETS | ||||
| Intangible assets | 1,479 | 1,555 | 1,407 | |
| Property, plant and equipment | 6,992 | 6,040 | 6,498 | |
| Right-of-use assets | 252 | 226 | 226 | |
| Deferred tax assets | 53 | 33 | 55 | |
| Investments in joint ventures | 4 | 18 | 14 | 16 |
| Other non-current receivables | 3 | 121 | 135 | 122 |
| Non-current assets | 8,915 | 8,003 | 8,323 | |
| Inventories | 4,994 | 2,976 | 3,933 | |
| Receivables | 3 | 4,217 | 2,800 | 2,696 |
| Interest-bearing receivables | 3 | 3 | 26 | 5 |
| Cash and cash equivalents | 1,195 | 1,008 | 809 | |
| Current assets | 10,410 | 6,810 | 7,444 | |
| TOTAL ASSETS | 19,324 | 14,813 | 15,767 | |
| EQUITY AND LIABILITIES | ||||
| Equity | 8,026 | 6,546 | 6,932 | |
| Interest-bearing liabilities | 3 | 3,090 | 1,953 | 2,414 |
| Provisions and other non-current liabilities | 3 | 937 | 807 | 882 |
| Non-current liabilities | 4,027 | 2,761 | 3,297 | |
| Interest-bearing liabilities | 3 | 2,768 | 2,281 | 1,694 |
| Provisions and other current liabilities | 3 | 4,503 | 3,225 | 3,844 |
| Current liabilities | 7,271 | 5,505 | 5,539 | |
| TOTAL EQUITY AND LIABILITIES | 19,324 | 14,813 | 15,767 |
CONSOLIDATED CHANGES IN EQUITY (CONDENSED)
| SEK million | 30 Jun 2022 | 30 Jun 2021 | 31 Dec 2021 |
|---|---|---|---|
| Opening balance | 6,930 | 5,968 | 5,968 |
| Profit for the period | 556 | 465 | 595 |
| Other comprehensive income for the period | 770 | 140 | 395 |
| Total comprehensive income for the period | 1,326 | 605 | 990 |
| Dividend | –239 | –117 | –117 |
| Option premium | 7 | – | – |
| Share swap | – | 88 | 88 |
| Total transactions with owners | –232 | –29 | –29 |
| Equity attributable to owners of the parent company | 8,024 | 6,544 | 6,930 |
| Equity attributable to non-controlling interests | 2 | 2 | 2 |
| Closing balance | 8,026 | 6,546 | 6,932 |
CONSOLIDATED STATEMENT OF CASH FLOWS (CONDENSED)
| SEK million Note |
Apr–Jun 2022 |
Apr–Jun 2021 |
Jan–Jun 2022 |
Jan–Jun 2021 |
Jan–Dec 2021 |
|---|---|---|---|---|---|
| Operating profit | 436 | 309 | 794 | 635 | 833 |
| Depreciation, amortization and impairment charges | 289 | 159 | 459 | 316 | 678 |
| Other non-cash items | –73 | – | –73 | 16 | 215 |
| Change in working capital etc. | 177 | –50 | –1,475 | –521 | –623 |
| Income taxes paid | –36 | –23 | –51 | –54 | –116 |
| Cash flow from operating activities | 793 | 395 | –346 | 392 | 988 |
| Acquisitions | – | – | – | –78 | –90 |
| Investments in property, plant, equipment and | |||||
| intangible assets | –218 | –156 | –372 | –325 | –836 |
| Cash flow from investing activities | –218 | –156 | –372 | –402 | –926 |
| Cash flow before financing activities | 575 | 239 | –719 | –10 | 62 |
| Dividend | –239 | –117 | –239 | –117 | –117 |
| Option premium | 7 | – | 7 | – | – |
| Interest paid and received | –54 | 8 | –75 | 2 | –82 |
| New loans | 2,493 | 1,489 | 7,220 | 2,229 | 6,466 |
| Repayment of loans | –2,291 | –1,211 | –5,883 | –2,591 | –7,061 |
| Cash flow from financing activities | –84 | 169 | 1,031 | –477 | –793 |
| Cash flow for the period | 491 | 409 | 312 | –487 | –732 |
| Cash and cash equivalents at beginning of period | 655 | 607 | 809 | 1,473 | 1,473 |
| Cash flow for the period | 491 | 409 | 312 | –487 | –732 |
| Exchange rate differences in cash and | |||||
| cash equivalents | 48 | –8 | 74 | 22 | 67 |
| Cash and cash equivalents at end of period | 1,195 | 1,008 | 1,195 | 1,008 | 809 |
PARENT COMPANY INCOME STATEMENT (CONDENSED)
| SEK million | Apr–Jun 2022 |
Apr–Jun 2021 |
Jan–Jun 2022 |
Jan–Jun 2021 |
Jan–Dec 2021 |
|---|---|---|---|---|---|
| Net sales | 31 | 30 | 61 | 59 | 142 |
| Payroll and other operating expenses | –74 | –54 | –137 | –110 | –253 |
| Depreciation, amortization and impairment charges | 0 | –2 | –1 | –4 | –8 |
| Operating profit/loss | –44 | –26 | –77 | –55 | –119 |
| Dividends from subsidiaries | 0 | – | 0 | – | 0 |
| Finance income and costs | 26 | 7 | 39 | 12 | 41 |
| Profit/loss after financial items | –18 | –19 | –38 | –43 | –78 |
| Appropriations | – | – | – | – | 0 |
| Income tax | –4 | 3 | 0 | 8 | 15 |
| Profit/loss for the period | –22 | –16 | –38 | –35 | –63 |
PARENT COMPANY BALANCE SHEET (CONDENSED)
| SEK million | 30 Jun 2022 | 30 Jun 2021 | 31 Dec 2021 |
|---|---|---|---|
| ASSETS | |||
| Intangible assets | – | 30 | 0 |
| Property, plant and equipment | 1 | 2 | 2 |
| Shares in Group companies | 2,906 | 2,894 | 2,906 |
| Deferred tax assets | 47 | 36 | 47 |
| Receivables from Group companies | 3,776 | 2,438 | 2,659 |
| Other non-current receivables | 103 | 2 | 105 |
| Non-current assets | 6,832 | 5,401 | 5,718 |
| Receivables from Group companies | 987 | 494 | 649 |
| Other receivables | 443 | 107 | 129 |
| Cash and cash equivalents | 423 | 492 | 446 |
| Current assets | 1,852 | 1,094 | 1,224 |
| TOTAL ASSETS | 8,684 | 6,495 | 6,942 |
| EQUITY AND LIABILITIES | |||
| Equity | 3,156 | 3,362 | 3,422 |
| Interest-bearing liabilities | 1,844 | 707 | 1,095 |
| Provisions and other non-current liabilities | 45 | 33 | 34 |
| Non-current liabilities | 1,888 | 740 | 1,129 |
| Liabilities to Group companies | 1,229 | 568 | 696 |
| Interest-bearing liabilities | 2,147 | 1,699 | 1,474 |
| Provisions and other current liabilities | 263 | 126 | 221 |
| Current liabilities | 3,639 | 2,394 | 2,391 |
| TOTAL EQUITY AND LIABILITIES | 8,684 | 6,495 | 6,942 |
NOTES
NOTE 1 ACCOUNTING PRINCIPLES
The Gränges Group applies International Financial Reporting Standards (IFRS) as endorsed by the EU. The accounting principles adopted are consistent with those described in the Annual Report for Gränges AB (publ) 2021. This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The Parent Company applies the Swedish Annual Accounts Act and RFR 2 Reporting for Legal Entities.
New standards, amendments and interpretations effective from 1 January 2022 or later have not had any material impact on this financial report.
The interim information on pages 2–19 is an integrated part of these financial statements.
NOTE 2 REVENUE FROM CONTRACTS WITH CUSTOMERS
Gränges' revenue is generated through sale of material that is produced for a certain customer and application. Revenue is recognized at the point in time when control is transferred to the customer. The transaction price for Gränges' products is based on the added value Gränges offers in terms of material properties and production complexity (fabrication price), and the price of the raw material, aluminium. The fabrication price is to a large extent pre-defined while the aluminium price is variable and based on metal price clauses connected to the market price. Other revenue for the second quarter of 2022 includes an insurance compensation of SEK 107 million for a fire in the Konin facility. The tables below show Gränges' net sales by business area divided by type of revenue.
| SEK million | Apr–Jun 2022 |
Apr–Jun 2021 |
Jan–Jun 2022 |
Jan–Jun 2021 |
Jan–Dec 2021 |
|---|---|---|---|---|---|
| Net sales by business area | |||||
| Gränges Americas | |||||
| Fabrication revenue | 1,131 | 849 | 2,160 | 1,633 | 3,182 |
| Raw material and other revenue | 2,559 | 1,558 | 4,723 | 2,789 | 6,251 |
| Revenue from contracts with customers | 3,690 | 2,407 | 6,883 | 4,422 | 9,432 |
| Other revenue | 2 | 19 | 2 | 19 | 56 |
| Total net sales Gränges Americas | 3,692 | 2,426 | 6,885 | 4,441 | 9,488 |
| Gränges Eurasia | |||||
| Fabrication revenue | 1,378 | 1,452 | 2,649 | 2,873 | 3,861 |
| Raw material and other revenue | 2,102 | 1,026 | 3,973 | 1,940 | 5,773 |
| Revenue from contracts with customers | 3,479 | 2,478 | 6,622 | 4,814 | 9,633 |
| Other revenue | 114 | 4 | 117 | 7 | 15 |
| Total net sales Gränges Eurasia | 3,593 | 2,482 | 6,740 | 4,821 | 9,648 |
| Other and eliminations | |||||
| Fabrication revenue | –231 | –173 | –386 | –363 | –588 |
| Raw material and other revenue | –179 | –126 | –284 | –248 | –419 |
| Revenue from contracts with customers | –410 | –299 | –670 | –611 | –1,007 |
| Other revenue | – | – | – | – | – |
| Total net sales other and eliminations | –410 | –299 | –670 | –611 | –1,007 |
| Total fabrication revenue | 2,277 | 2,128 | 4,424 | 4,143 | 6,454 |
| Total raw material and other revenue | 4,482 | 2,459 | 8,412 | 4,482 | 11,604 |
| Total revenue from contracts with customers | 6,760 | 4,586 | 12,835 | 8,625 | 18,059 |
| Total other revenue | 116 | 23 | 119 | 26 | 71 |
| Total net sales | 6,875 | 4,609 | 12,955 | 8,651 | 18,130 |
NOTE 3 FINANCIAL INSTRUMENTS
The Group's financial assets consist of lending, accounts receivable, cash and cash equivalents as well as derivatives. The Group's financial liabilities consist of borrowings and accounts payable as well as derivatives. The table below shows the fair value of the derivatives (foreign exchange, aluminium and interest rate derivatives) included in the balance sheet.
| SEK million | 30 Jun 2022 | 30 Jun 2021 | 31 Dec 2021 |
|---|---|---|---|
| Non-current assets | 103 | 119 | 105 |
| Current assets | 636 | 98 | 134 |
| Non-current liabilities | 11 | 0 | 1 |
| Current liabilities | 414 | 126 | 249 |
All derivatives are measured at fair value and are classified according to level 2, i.e., all significant inputs required for measurement of the instruments are observable. Fair value of foreign exchange derivatives is calculated by discounting the difference between the contracted forward rate and the forward rate that can be contracted on the balance sheet date for the remaining contract period. Aluminium derivatives are measured at observable quoted prices on LME (London Metal Exchange) and SHFE (Shanghai Futures Exchange) for similar assets and liabilities.
Gränges' interest-bearing liabilities consist both of financing from banks and institutions and the credit market. As per June 30, 2022, the amount of outstanding term loans was USD 150 million and SEK 500 million. The facility amount of Gränges Revolving Credit Facility was SEK 3,500 million, whereof SEK 750 million was utilized. Financing from banks and institutions also includes working capital loans of CNY 200 million. Furthermore, interest-bearing liabilities includes corporate bonds issued under the company's MTN programme. The total amount was SEK 900 million as per June 30, 2022, whereof SEK 600 million was Sustainability-Linked Bonds. The outstanding volume of commercial papers was SEK 1,496 million.
The loan facilities are subject to covenants, which are Net Debt/EBITDA and Interest coverage ratio.
| Year | |||||
|---|---|---|---|---|---|
| SEK million | Limit/Program amount |
< 1 | 1–2 | > 2 | Total |
| Term loans | |||||
| SEK | 300 | – | 200 | 500 | |
| USD | 515 | 1,029 | – | 1,544 | |
| Bonds in MTN programme | 3,000 | – | 300 | 600 | 900 |
| Commercial papers | 2,000 | 1,498 | – | – | 1,498 |
| Revolving Credit Facilities | 3,500 | – | 750 | – | 750 |
| Lease liabilities | 45 | 40 | 179 | 265 | |
| Other interest-bearing liabilities | 411 | – | –9 | 402 | |
| Total interest-bearing liabilities | 2,768 | 2,119 | 971 | 5,859 |
Interest-bearing liabilities are measured at amortized cost and the carrying amount as of 30 June 2022 was SEK 5,859 million (SEK 4,109 million as of 31 December 2021). The fair value of interest-bearing liabilities amounted to SEK 5,868 million as of 30 June 2022 (SEK 4,117 million as of 31 December 2021). For other receivables and liabilities, which are short-term, the carrying amount is considered to reflect the fair value.
NOTE 4 RELATED PARTY TRANSACTIONS
No changes have been made to the Group or parent company in relations or transactions with related parties, compared to what is described in the 2021 Annual Report. During the period there have been no significant transactions with related parties.
NOTE 5 ITEMS AFFECTING COMPARABILITY
| SEK million | Financial statement line | Apr–Jun 2022 |
Apr–Jun 2021 |
Jan–Jun 2022 |
Jan–Jun 2021 |
Jan–Dec 2021 |
|---|---|---|---|---|---|---|
| Write-down of intangible assets | Items affecting comparability | – | – | – | – | –158 |
| Restructuring costs | Items affecting comparability | – | – | – | – | –42 |
| Insurance compensation | Items affecting comparability | 62 | – | 62 | – | 40 |
| Realisation of fair value inventory step-up | Cost of materials | |||||
| on acquired business | – | – | – | –16 | –16 | |
| Items affecting comparability | 62 | – | 62 | –16 | –175 |
In the second quarter of 2021 a fire occurred in one of the rolling mills in the US. The event was covered by property damage and interruption insurance. Insurance compensation corresponding to the costs for the fire was reported as part of adjusted operating profit. Insurance compensation in addition to cost coverage and deductible, amounting to SEK 40 million, was handled as an item affecting comparability in 2021. The insurance claim has now been finally settled and additional SEK 62 million has been obtained and reported as an item affecting comparability in the second quarter of 2022. No further effects are expected from the fire in the US or from related insurance case.
In the fourth quarter 2021 Gränges decided to simplify its organization by decentralizing the responsibility for innovation, digitalization and continuous improvement. The decentralization of digitalization led to that certain investments in group-wide IT systems no longer were relevant and written down by SEK 138 million. Remaining write-down of SEK 19 million referred to other intangible assets. The simplified organization also led to restructuring costs of SEK 42 million in 2021.
Residuary item affecting comparability in 2021 of SEK –16 million relates to realisation of fair value step-up on acquired inventory as part of business combination.
NOTE 6 TAX
Gränges' Chinese subsidiary is for tax purpose preparing an application for a pre-qualification as a High and New-Technology Enterprise for the three-year period 2022 to 2024. The pre-qualification would mean that the company preliminarily would pay 15 per cent in corporate income tax instead of the ordinary tax of 25 per cent for the period. Gränges currently considers it to be more likely than not that the pre-qualification will be obtained and therefore applies a tax rate of 15 per cent for the Chinese subsidiary for the first half-year of 2022. If the ordinary tax rate of 25 per cent would have been applied for the Chinese subsidiary the Group's tax rate would not have been significantly impacted.
CONSOLIDATED QUARTERLY DATA
| 2022 | 2021 | 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK million | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | |
| Sales volume, ktonnes | 122.5 | 126.7 | 112.3 | 118.5 | 131.4 | 126.7 | 103.3 | 86.7 | |
| Income statement | |||||||||
| Net sales | 6,875 | 6,080 | 4,857 | 4,621 | 4,609 | 4,043 | 3,149 | 2,575 | |
| Adjusted EBITDA1 | 663 | 528 | 299 | 420 | 468 | 499 | 342 | 332 | |
| Adjusted operating profit1 | 374 | 357 | 139 | 219 | 309 | 342 | 193 | 203 | |
| Operating profit | 436 | 357 | –21 | 219 | 309 | 326 | 167 | 177 | |
| Profit for the period | 295 | 261 | –23 | 153 | 226 | 239 | 106 | 124 | |
| Adjusted EBITDA margin, % | 9.6 | 8.7 | 6.2 | 9.1 | 10.2 | 12.3 | 10.9 | 12.9 | |
| Adjusted operating margin, % | 5.4 | 5.9 | 2.9 | 4.7 | 6.7 | 8.5 | 6.1 | 7.9 | |
| Adjusted operating profit per tonne, kSEK | 3.1 | 2.8 | 1.2 | 1.8 | 2.4 | 2.7 | 1.9 | 2.3 | |
| Operating margin, % | 6.3 | 5.9 | –0.4 | 4.7 | 6.7 | 8.1 | 5.3 | 6.9 | |
| Net margin, % | 4.3 | 4.3 | –0.5 | 3.3 | 4.9 | 5.9 | 3.4 | 4.8 | |
| Balance sheet | |||||||||
| Non-current assets | 8,915 | 8,440 | 8,323 | 8,099 | 8,003 | 8,062 | 7,633 | 5,825 | |
| Current assets | 10,410 | 9,630 | 7,444 | 7,399 | 6,810 | 6,009 | 6,020 | 4,330 | |
| Equity | 8,026 | 7,247 | 6,932 | 6,745 | 6,546 | 6,424 | 5,970 | 4,442 | |
| Non-current liabilities | 4,027 | 3,634 | 3,297 | 3,425 | 2,761 | 2,780 | 3,068 | 2,905 | |
| Current liabilities | 7,271 | 7,189 | 5,539 | 5,327 | 5,505 | 4,867 | 4,614 | 2,808 | |
| Cash flow | |||||||||
| Operating activities | 793 | –1,140 | 630 | –34 | 395 | –3 | 318 | 426 | |
| Investing activities | –218 | –154 | –338 | –186 | –156 | –247 | –1,335 | –78 | |
| Before financing activities | 575 | –1,294 | 292 | –220 | 239 | –250 | –1,017 | 348 | |
| Financing activities | –84 | 1,115 | –580 | 263 | 169 | –646 | 1,628 | –391 | |
| Cash flow for the period | 491 | –179 | –288 | 43 | 409 | –896 | 611 | –43 | |
| Capital structure | |||||||||
| Net debt | 4,917 | 4,991 | 3,643 | 3,810 | 3,532 | 3,690 | 3,292 | 2,812 | |
| Equity to assets, % | 41.5 | 40.1 | 44.0 | 43.5 | 44.2 | 45.7 | 43.7 | 43.7 | |
| Data per share, SEK2 | |||||||||
| Earnings per share basic | 2.78 | 2.45 | –0.21 | 1.44 | 2.12 | 2.25 | 1.19 | 1.45 | |
| Earnings per share diluted | 2.78 | 2.45 | –0.21 | 1.44 | 2.12 | 2.24 | 1.19 | 1.45 | |
| Equity | 75.48 | 68.05 | 65.09 | 63.26 | 61.40 | 60.25 | 66.49 | 52.15 | |
| Cash flow from operating activities | 7.46 | –10.70 | 5.91 | –0.32 | 3.71 | –0.03 | 3.54 | 5.00 | |
| Share price at the end of the period | 76.50 | 92.70 | 106.10 | 105.50 | 118.90 | 113.50 | 100.20 | 71.06 | |
| Weighted outstanding ordinary shares, basic in thousands |
106,308.6 | 106,308.6 | 106,308.6 | 106,308.6 | 106,308.6 | 106,308.6 | 89,742.0 | 85,177.3 | |
| Weighted outstanding ordinary shares, diluted in thousands |
106,333.8 | 106,495.4 | 106,498.1 | 106,615.3 | 106,623.1 | 106,620.7 | 89,789.3 | 85,177.3 | |
1 Adjusted for items affecting comparability, see Note 5 for further information.
2 Calculated on weighted outstanding ordinary shares, diluted.
CONSOLIDATED QUARTERLY DATA
| 2022 | 2021 | 2020 | ||||||
|---|---|---|---|---|---|---|---|---|
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | |
| Sales volume by business area, ktonnes | ||||||||
| Gränges Americas | 63.8 | 64.0 | 56.9 | 63.8 | 69.0 | 62.7 | 54.9 | 59.1 |
| Gränges Eurasia | 66.1 | 68.3 | 59.0 | 60.9 | 70.4 | 73.2 | 55.4 | 31.8 |
| Other and eliminations | –7.4 | –5.5 | –3.6 | –6.1 | –8.0 | –9.2 | –7.1 | –4.1 |
| Total | 122.5 | 126.7 | 112.3 | 118.5 | 131.4 | 126.7 | 103.3 | 86.7 |
| Sales volume by end-customer, ktonnes | ||||||||
| Automotive | 46.0 | 44.9 | 42.7 | 44.3 | 51.4 | 55.3 | 46.8 | 35.3 |
| HVAC | 28.0 | 28.5 | 22.1 | 27.1 | 30.4 | 26.1 | 19.4 | 22.4 |
| Speciality packaging | 21.3 | 22.1 | 21.0 | 22.7 | 22.8 | 19.1 | 18.2 | 18.1 |
| Other niches | 27.2 | 31.3 | 26.5 | 24.4 | 26.8 | 26.2 | 18.8 | 10.9 |
| Total | 122.5 | 126.7 | 112.3 | 118.5 | 131.4 | 126.7 | 103.3 | 86.7 |
| Net sales by business area, SEK million | ||||||||
| Gränges Americas | 3,692 | 3,193 | 2,485 | 2,562 | 2,426 | 2,015 | 1,650 | 1,704 |
| Gränges Eurasia | 3,593 | 3,147 | 2,526 | 2,301 | 2,482 | 2,339 | 1,720 | 1,019 |
| Other and eliminations | –410 | –260 | –153 | –242 | –299 | –312 | –220 | –148 |
| Total | 6,875 | 6,080 | 4,857 | 4,621 | 4,609 | 4,043 | 3,149 | 2,575 |
| Employees | ||||||||
| Average number of employees | 2,712 | 2,686 | 2,682 | 2,664 | 2,645 | 2,602 | 2,297 | 1,629 |
| Sustainability1 | ||||||||
| Total carbon emissions intensity (scope 1+2+3), tonnes CO2 e/tonne |
7.9 | 9.0 | 9.3 | 8.9 | 9.1 | 10.0 | – | – |
| Carbon emissions intensity (scope 1+2), tonnes CO2 e/tonne |
0.83 | 0.90 | 0.96 | 0.88 | 0.81 | 0.88 | – | – |
| Carbon emissions intensity (scope 3), tonnes CO2 e/tonne |
7.0 | 8.1 | 8.4 | 8.0 | 8.3 | 9.1 | – | – |
| Sourced aluminium scrap, % | 35.4 | 31.1 | 32.9 | 28.7 | 26.9 | 25.6 | – | – |
1 Quarterly data may be adjusted in the year-end report when annual emission factors have been confirmed. Scope 2 data is calculated with a market-based approach.
| Automotive | HVAC | Speciality packaging | Other niches | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Sales volume, ktonnes | Q2 2022 | Q2 2021 | Q2 2022 | Q2 2021 | Q2 2022 | Q2 2021 | Q2 2022 | Q2 2021 | Q2 2022 | Q2 2021 |
| Gränges Americas | 9.3 | 11.5 | 28.0 | 29.4 | 16.9 | 17.7 | 9.6 | 10.4 | 63.8 | 69.0 |
| Gränges Eurasia | 44.0 | 47.8 | 0.2 | 1.2 | 4.4 | 5.1 | 17.6 | 16.4 | 66.1 | 70.4 |
| Other and eliminations | –7.2 | –7.8 | –0.2 | –0.2 | – | – | – | – | –7.4 | –8.0 |
| Total | 46.0 | 51.4 | 28.0 | 30.4 | 21.3 | 22.8 | 27.2 | 26.8 | 122.5 | 131.4 |
CONSOLIDATED 12-MONTHS ROLLING DATA
| SEK million | Jul 2021 – Jun 2022 |
Apr 2021 – Mar 2022 |
Jan 2021 – Dec 2021 |
Oct 2020 – Sep 2021 |
Jul 2020 – Jun 2021 |
Apr 2020 – Mar 2021 |
Jan 2020 – Dec 2020 |
Oct 2019 – Sep 2020 |
|---|---|---|---|---|---|---|---|---|
| Sales volume, ktonnes | 480.0 | 488.9 | 488.9 | 479.9 | 448.1 | 387.5 | 350.6 | 325.2 |
| Income statement | ||||||||
| Net sales | 22,433 | 20,167 | 18,130 | 16,421 | 14,375 | 11,987 | 11,008 | 10,541 |
| Adjusted EBITDA1 | 1,910 | 1,715 | 1,686 | 1,729 | 1,641 | 1,355 | 1,201 | 1,129 |
| Adjusted operating profit1 | 1,089 | 1,024 | 1,008 | 1,063 | 1,048 | 780 | 648 | 599 |
| Operating profit | 992 | 864 | 833 | 1,020 | 979 | 707 | 584 | 532 |
| Adjusted EBITDA margin, % | 8.5 | 8.5 | 9.3 | 10.5 | 11.4 | 11.3 | 10.9 | 10.7 |
| Adjusted operating margin, % | 4.9 | 5.1 | 5.6 | 6.5 | 7.3 | 6.5 | 5.9 | 5.7 |
| Adjusted operating profit per tonne, kSEK | 2.3 | 2.1 | 2.1 | 2.2 | 2.3 | 2.0 | 1.8 | 1.8 |
| Operating margin, % | 4.4 | 4.3 | 4.6 | 6.2 | 6.8 | 5.9 | 5.3 | 5.0 |
| Capital structure and return indicators | ||||||||
| Capital employed | 11,278 | 10,712 | 10,117 | 9,453 | 8,866 | 8,495 | 8,028 | 7,773 |
| Return on capital employed, % | 9.7 | 9.6 | 10.0 | 11.2 | 11.8 | 9.2 | 8.1 | 7.7 |
| Equity | 7,097 | 6,777 | 6,521 | 6,024 | 5,550 | 5,174 | 4,752 | 4,435 |
| Return on equity, % | 9.7 | 9.1 | 9.1 | 12.0 | 12.5 | 9.1 | 7.6 | 6.9 |
| Financial net debt2/Adjusted EBITDA3 | 2.3 | 2.6 | 1.8 | 1.8 | 1.7 | 2.0 | 1.8 | 1.9 |
1 Adjusted for items affecting comparability, see Note 5 for further information.
2 Adjusted for pensions and lease liabilities, see alternative performance measures for further information.
3 Includes adjusted EBITDA for acquisitions as a part of Gränges Group for 12 months, see alternative performance measures for further information.
Sustainability4
| Total carbon emissions intensity (scope 1+2+3), tonnes CO2 e/tonne |
7.7 | 9.1 | 9.3 | – | – | – | – | – |
|---|---|---|---|---|---|---|---|---|
| Carbon emissions intensity (scope 1+2), tonnes CO2 e/tonne |
0.72 | 0.88 | 0.88 | – | – | – | – | – |
| Carbon emissions intensity (scope 3), tonnes CO2 e/tonne |
6.0 | 8.2 | 8.4 | – | – | – | – | – |
| Sourced aluminium scrap, % | 31.9 | 29.9 | 28.5 | – | – | – | – | – |
4 Quarterly data may be adjusted in the year-end report when annual emission factors have been confirmed. Scope 2 data is calculated with a market-based approach.
FINANCIALS PER BUSINESS AREA
| Apr–Jun 2022 | Apr–Jun 2021 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK million | Gränges Americas |
Gränges Eurasia |
Other and eliminations |
Total | Gränges Americas |
Gränges Eurasia |
Other and eliminations |
Total | |
| Sales volume external, ktonnes | 63.8 | 58.7 | – | 122.5 | 69.0 | 62.4 | – | 131.4 | |
| Sales volume internal, ktonnes | – | 7.4 | –7.4 | 0 | – | 8.0 | –8.0 | 0 | |
| Total sales volume | 63.8 | 66.1 | –7.4 | 122.5 | 69.0 | 70.4 | –8.0 | 131.4 | |
| Income statement | |||||||||
| Net sales, external | 3,698 | 3,177 | – | 6,875 | 2,425 | 2,184 | – | 4,609 | |
| Net sales, internal | –6 | 416 | –410 | 0 | 1 | 298 | –299 | 0 | |
| Total net sales | 3,692 | 3,593 | –410 | 6,875 | 2,426 | 2,482 | –299 | 4,609 | |
| Adjusted operating profit1 | 270 | 172 | –68 | 374 | 219 | 136 | –46 | 309 | |
| Operating profit | 332 | 172 | –68 | 436 | 219 | 136 | –46 | 309 | |
| Adjusted operating profit per tonne, kSEK | 4.2 | 2.6 | n/a | 3.1 | 3.2 | 1.9 | n/a | 2.4 | |
| Capital structure and return indicators | |||||||||
| Capital employed2 | 5,636 | 7,841 | –534 | 12,943 | 3,761 | 6,647 | –330 | 10,079 | |
| Return on capital employed, %3 | 17.0 | 5.9 | n/a | 9.7 | 17.2 | 9.0 | n/a | 11.8 |
| Jan–Jun 2022 | Jan–Jun 2021 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK million | Gränges Americas |
Gränges Eurasia |
Other and eliminations |
Total | Gränges Americas |
Gränges Eurasia |
Other and eliminations |
Total | |
| Sales volume external, ktonnes | 127.7 | 121.5 | – | 249.2 | 131.7 | 126.4 | – | 258.1 | |
| Sales volume internal, ktonnes | – | 12.9 | –12.9 | 0 | – | 17.2 | –17.2 | 0 | |
| Total sales volume | 127.7 | 134.4 | –12.9 | 249.2 | 131.7 | 143.6 | –17.2 | 258.1 | |
| Income statement | |||||||||
| Net sales, external | 6,904 | 6,051 | – | 12,955 | 4,437 | 4,212 | 2 | 8,651 | |
| Net sales, internal | –19 | 689 | –670 | 0 | 4 | 609 | –613 | 0 | |
| Total net sales | 6,885 | 6,740 | –670 | 12,955 | 4,441 | 4,821 | –611 | 8,651 | |
| Adjusted operating profit1 | 522 | 306 | –96 | 732 | 410 | 329 | –88 | 651 | |
| Operating profit | 584 | 306 | –96 | 794 | 410 | 313 | –88 | 635 | |
| Adjusted operating profit per tonne, kSEK | 4.1 | 2.3 | n/a | 2.9 | 3.1 | 2.3 | n/a | 2.5 |
1 Adjusted for items affecting comparability, see Note 5 for further information.
2 Closing balance at end of the period.
3 Calculated on the average capital employed during the past 12-months period.
FINANCIALS PER BUSINESS AREA
| Gränges Americas | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2020 | |||||||
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | |||
| Sales volume external, ktonnes | 63.8 | 64.0 | 56.9 | 63.8 | 69.0 | 62.7 | 54.9 | 59.1 | ||
| Sales volume internal, ktonnes | – | – | – | – | – | – | – | – | ||
| Total sales volume, ktonnes | 63.8 | 64.0 | 56.9 | 63.8 | 69.0 | 62.7 | 54.9 | 59.1 | ||
| Income statement | ||||||||||
| Net sales, external | 3,698 | 3,206 | 2,498 | 2,567 | 2,425 | 2,012 | 1,652 | 1,688 | ||
| Net sales, internal | –6 | –13 | –13 | –5 | 1 | 3 | –3 | 16 | ||
| Total net sales | 3,692 | 3,193 | 2,485 | 2,562 | 2,426 | 2,015 | 1,650 | 1,704 | ||
| Adjusted operating profit1 | 270 | 251 | 73 | 172 | 219 | 191 | 108 | 156 | ||
| Operating profit | 332 | 251 | 109 | 172 | 219 | 191 | 103 | 156 | ||
| Adjusted operating profit per tonne, kSEK | 4.2 | 3.9 | 1.3 | 2.7 | 3.2 | 3.0 | 2.0 | 2.6 | ||
| Capital structure and return indicators | ||||||||||
| Capital employed2 | 5,636 | 5,031 | 4,076 | 4,066 | 3,761 | 3,895 | 3,555 | 3,989 | ||
| Return on capital employed, %3 | 17.0 | 17.2 | 16.9 | 17.9 | 17.2 | 13.1 | 11.8 | 9.8 |
| Gränges Eurasia | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK million | 2022 | 2021 | 2020 | ||||||
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | ||
| Sales volume external, ktonnes | 58.7 | 62.8 | 55.4 | 54.8 | 62.4 | 64.0 | 48.3 | 27.7 | |
| Sales volume internal, ktonnes | 7.4 | 5.5 | 3.6 | 6.1 | 8.0 | 9.2 | 7.1 | 4.1 | |
| Total sales volume, ktonnes | 66.1 | 68.3 | 59.0 | 60.9 | 70.4 | 73.2 | 55.4 | 31.8 | |
| Income statement | |||||||||
| Net sales, external | 3,177 | 2,874 | 2,362 | 2,054 | 2,184 | 2,028 | 1,488 | 882 | |
| Net sales, internal | 416 | 273 | 164 | 248 | 298 | 311 | 231 | 137 | |
| Total net sales | 3,593 | 3,147 | 2,526 | 2,301 | 2,482 | 2,339 | 1,720 | 1,019 | |
| Adjusted operating profit1 | 172 | 135 | 47 | 69 | 136 | 193 | 110 | 17 | |
| Operating profit | 172 | 135 | –102 | 69 | 136 | 177 | 80 | –8 | |
| Adjusted operating profit per tonne, kSEK | 2.6 | 2.0 | 0.8 | 1.1 | 1.9 | 2.6 | 2.0 | 0.5 | |
| Capital structure and return indicators | |||||||||
| Capital employed2 | 7,841 | 7,590 | 6,815 | 6,840 | 6,647 | 6,483 | 5,911 | 3,237 | |
| Return on capital employed, %3 | 5.9 | 5.6 | 6.8 | 8.7 | 9.0 | 6.7 | 4.6 | 4.9 |
1 Adjusted for items affecting comparability, see Note 5 for further information.
2 Closing balance at end of the period.
3 Calculated on the average capital employed during the past 12-months period.
Alternative performance measures
Gränges makes use of the alternative performance measures Return on capital employed, Financial net debt, Equity to assets ratio and Cash conversion. Gränges believes that these performance measures are useful for readers of the financial reports as a complement to other performance measures when assessing the possibility of dividends, the implementation of strategic investments, and the Group's ability to meet financial commitments. Further, Gränges uses the alternative performance measures Adjusted operating profit, Adjusted operating profit per tonne and Adjusted EBITDA, which are measures that Gränges considers to be relevant for investors who want to understand the profit generation excluding items affecting comparability. For definitions of the measures, see page 26.
| Jul 2021 – SEK million 2022 2021 2022 2021 Jun 2022 2021 Adjusted operating profit Operating profit 436 309 794 635 992 Items affecting comparability –62 – –62 16 97 Adjusted operating profit 374 309 732 651 1,089 1,008 Adjusted operating profit per tonne Adjusted operating profit 374 309 732 651 1,089 Sales volume, ktonnes 122.5 131.4 249.2 258.1 480.0 Adjusted operating profit per tonne, kSEK 3.1 2.4 2.9 2.5 2.3 Adjusted EBITDA Adjusted operating profit 374 309 732 651 1,089 Depreciation, amortization and impairment charges 289 159 459 316 821 Adjusted EBITDA 663 468 1,190 967 1,910 Return on capital employed Total assets less cash and cash equivalents and interest–bearing receivables, rolling 12 months average – – – – 15,728 Non-interest-bearing liabilities, rolling 12 months average – – – – –4,774 Pensions, rolling 12 months average – – – – 324 Capital employed – – – – 11,278 Adjusted operating profit – – – – 1,089 Return on capital employed, % – – – – 9.7 Financial net debt/Adjusted EBITDA Cash and cash equivalents and interest–bearing receivables – – –1,198 –1,034 –1,1981 Interest-bearing liabilities – – 5,859 4,234 5,8591 –2651 Lease liabilities – – –265 –233 Financial net debt – – 4,396 2,967 4,3961 Adjusted EBITDA, rolling 12 months – – – – 1,910 Financial net debt/Adjusted EBITDA – – – – 2.3 Equity to assets 8,0261 Equity – – 8,026 6,546 Total assets – – 19,324 14,813 19,3241 Equity to assets, % – – 41.5 44.2 41.51 Adjusted cash flow before financing activities Cash flow before financing activities 575 239 –719 –10 –647 Cash flow from expansion investments 147 94 217 211 462 Cash flow from acquisitions and other capital transactions – – – 78 12 |
Q2 | Jan-Jun | 12 months rolling |
Full year | |||
|---|---|---|---|---|---|---|---|
| 833 | |||||||
| 175 | |||||||
| 1,008 | |||||||
| 488.9 | |||||||
| 2.1 | |||||||
| 1,008 | |||||||
| 678 | |||||||
| 1,686 | |||||||
| 13,717 | |||||||
| –3,948 | |||||||
| 348 | |||||||
| 10,117 | |||||||
| 1,008 | |||||||
| 10.0 | |||||||
| –814 | |||||||
| 4,109 | |||||||
| –236 | |||||||
| 3,059 | |||||||
| 1,686 | |||||||
| 1.8 | |||||||
| 6,932 | |||||||
| 15,767 | |||||||
| 44.0 | |||||||
| 62 | |||||||
| 456 | |||||||
| 90 | |||||||
| Adjusted cash flow before financing activities | 722 | 334 | –502 | 279 | –173 | 607 |
Cont. on next page
Cash conversion
| Adjusted cash flow before financing activities | 722 | 334 | –502 | 279 | –173 | 607 |
|---|---|---|---|---|---|---|
| Adjusted operating profit | 374 | 309 | 732 | 651 | 1,089 | 1,008 |
| Cash conversion, % | 193 | 108 | –69 | 43 | –16 | 60 |
1 Closing balance at the end of the period.
Definitions
Adjusted EBITDA
Adjusted operating profit before depreciation and impairment charges.
Adjusted cash flow before financing activities
Cash flow before financing activities excluding cash flow from non-maintenance investments and acquisitions.
Adjusted operating profit
Operating profit excluding items affecting comparability.
Adjusted operating profit per tonne
Adjusted operating profit divided by sales volume.
Average number of employees
The average number of employees converted to full-time positions.
Capital employed
Total assets less cash and cash equivalents and interest-bearing receivables, minus non-interest-bearing liabilities, excluding pensions.
Carbon emissions intensity
Total emissions of greenhouse gases [tonnes CO2 e] divided by the total packed products [tonnes].
Cash conversion
Adjusted cash flow before financing activities divided by adjusted operating profit.
Cash flow before financing activities
Cash flow from operating activities plus cash flow from investing activities.
Earnings per share
Profit for the period divided by the total number of shares.
Equity to Assets
Equity divided by total assets.
Financial net debt
Cash and cash equivalents and interestbearing receivables minus interest-bearing liabilities, excluding lease liabilities.
Financial net debt/Adjusted EBITDA
Financial net debt divided by adjusted 12-months rolling EBITDA.
Glossary
Alloy Material composed of one metal with additions of other metals and/or elements.
Aluminium strip Rolled aluminium in coil form.
Brazing Joining of metals through melting and solidification.
Cladding A layer of metal bonded to a dissimilar metal or alloy.
Heat exchanger A device for transferring heat from one medium to another.
HVAC Heating, Ventilation and Air Conditioning systems including heat exchangers.
LME
London Metal Exchange.
Rolled aluminium
Aluminium that has been hot and/or cold rolled to desired gauge.
SHFE
Shanghai Futures Exchange.
Slab
Input material to the rolling process that is produced by casting.
ktonnes
Items affecting comparability Non-recurring income and expenses.
Volume expressed in thousands of metric tonnes.
Operating profit
Profit before net financial items and tax.
Return on capital employed
Adjusted operating profit divided by average capital employed during the past 12-months period.
Return on equity
Profit for the period divided by average equity during the past 12-months period.
Sales volume
Volumes sold in metric tonnes.
SEK Swedish Krona.
Share of sourced aluminium scrap
Sourced aluminium scrap used as input materials [tonnes] divided by total sourced metal input materials [tonnes].
Head office
Gränges AB (publ) Box 5505 SE-114 85 Stockholm Sweden
Visiting address
Linnégatan 18 114 47 Stockholm
Tel: +46 8 459 59 00 www.granges.com Reg. no. 556001-6122
ABOUT GRÄNGES
Gränges is an aluminium technology company that drives the development of lighter, smarter, and more sustainable aluminium products and solutions. The company offers advanced materials that enhance efficiency in the customers' manufacturing process and the performance of the final products. Gränges' innovative engineering has transformed the industry for more than 125 years, and the company holds leading positions in rolled products for thermal management systems, speciality packaging and selected niche applications. Gränges has production facilities and conducts sales on three continents, Asia, Europe, and Americas. The annual production capacity amounts to 570 ktonnes. Gränges has 2,650 employees and the share is listed on Nasdaq Stockholm. More information on Gränges is available at www.granges.com.
PURPOSE AND PROMISE
Gränges' purpose is to develop lighter, smarter and more sustainable aluminium products and solutions. Gränges' promise is to use expertise, flexibility and speed to deliver to the needs of today and tomorrow.
BUSINESS MODEL
Gränges' business model is based on long-term customer relationships. Revenue is generated through sale of material that is produced for a certain customer and application. Prices are expressed in metric tonnes and are based on the added value that Gränges offers in terms of material properties and production complexity, and the price of the raw material; aluminium. The cost for the material is passed on to the customer.
STRATEGY
Gränges has established a new long-term plan for sustainable growth involving three steps: to restore profitability, to build a world-leading aluminium technology company, and to invest in sustainable growth. The new plan also targets continued fast progress toward climate neutrality by 2040. Together with Gränges' strong company culture and committed employees, this will further strengthen Gränges' competitiveness and value creation as well as enabling Gränges to fulfil its purpose and promise.