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Gränges Interim / Quarterly Report 2021
3055_10-k_2022-01-27_131f4fbb-2e1b-47f9-ae41-87e90d1bd796.pdf
Interim / Quarterly Report
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YEAR-END REPORT JANUARY–DECEMBER 2021
Challenging fourth quarter concluded a year of recovery and investments
Fourth quarter 2021
- Sales volume increased by 8.7 per cent to 112.3 ktonnes (103.3) and net sales to SEK 4,857 million (3,149). Excluding Gränges Konin sales volume increased by 1.8 per cent to 90.3 ktonnes (88.7) and net sales was SEK 4,018 million (2,761).
- Adjusted operating profit decreased to SEK 139 million (193) and adjusted operating profit per tonne was 1.2 kSEK (1.9). Excluding Gränges Konin, adjusted operating profit was SEK 107 million (175).
- Profit for the period decreased to SEK –23 million (106) and includes items affecting comparability of SEK –159 million (–27).
- Diluted earnings per share decreased to SEK –0.21 (1.19).
- Cash flow before financing activities adjusted for expansion investments and acquisitions was SEK 463 million (232).
- EcoVadis Platinum sustainability rating achieved, ranking Gränges top 1 per cent in the industry.
January–December 2021
- Sales volume increased by 39.4 per cent to 488.9 ktonnes (350.6) and net sales to SEK 18,130 million (11,008). Excluding Gränges Konin sales volume increased by 18.0 per cent to 396.5 ktonnes (336.1) and net sales was SEK 15,146 million (10,620).
- Adjusted operating profit increased to SEK 1,008 million (648) and adjusted operating profit per tonne was 2.1 kSEK (1.8). Excluding Gränges Konin, adjusted operating profit increased to SEK 852 million (630).
- Profit for the period increased to SEK 595 million (363) and includes items affecting comparability of SEK –175 million (–64).
- Diluted earnings per share increased to SEK 5.58 (4.21).
- Cash flow before financing activities adjusted for expansion investments and acquisitions was SEK 607 million (1,180).
- Net debt increased to SEK 3,643 million at 31 December 2021 (SEK 3,292 million at 31 December 2020), corresponding to 2.2 times adjusted EBITDA1 (2.2 times at 31 December 20202).
- The Board of Directors proposes a dividend of SEK 2.25 (1.10) per share, corresponding to 40 per cent (32) of the profit for the year.
| Financial summary | Q4 | Jan–Dec | ||||
|---|---|---|---|---|---|---|
| SEK million | 2021 | 2020 | 2021 | 2020 | ||
| Sales volume, ktonnes | 112.3 | 103.3 | 8.7% | 488.9 | 350.6 | 39.4% |
| Net sales | 4,857 | 3,149 | 54.2% | 18,130 | 11,008 | 64.7% |
| Adjusted operating profit 1 | 139 | 193 | –28.3% | 1,008 | 648 | 55.5% |
| Adjusted operating margin, % | 2.9 | 6.1 | –3.3 ppt | 5.6 | 5.9 | –0.3 ppt |
| Adjusted operating profit per tonne, kSEK | 1.2 | 1.9 | –0.6 | 2.1 | 1.8 | 0.2 |
| Operating profit | –21 | 167 | n/a | 833 | 584 | 42.6% |
| Operating margin, % | –0.4 | 5.3 | –5.7 ppt | 4.6 | 5.3 | –0.7 ppt |
| Profit for the period | –23 | 106 | n/a | 595 | 363 | 63.7% |
| Earnings per share basic, SEK | –0.21 | 1.19 | –1.40 | 5.60 | 4.21 | 1.39 |
| Earnings per share diluted, SEK | –0.21 | 1.19 | –1.40 | 5.58 | 4.21 | 1.37 |
| Cash flow before financing activities | 292 | –1,017 | n/a | 62 | –322 | n/a |
| Equity to assets, % | – | – | – | 44.0 | 43.7 | 0.2 ppt |
| Net debt | – | – | – | 3,643 | 3,292 | 351 |
| Return on capital employed, % | – | – | – | 10.0 | 8.1 | 1.9 ppt |
1 Adjusted for items affecting comparability, see Note 5 for further information.
2 Includes adjusted EBITDA for acquisitions as a part of Gränges Group for 12 months, see alternative performance measures on page 24 for further information.
COMMENTS BY THE CEO
Tough ending to 2021 – aiming for recovery
STRONG MARKET IN GENERAL BUT WEAK IN AUTOMOTIVE. COST INCREASES.
As expected, the demand from automotive customers remained low in the fourth quarter as a result of semiconductor shortages. Also, more extensive planned maintenance than normal impacted sales volume negatively. However, most other markets showed continued strong demand. As a result, sales volume in the fourth quarter grew by 2 per cent excluding Gränges Konin.
After the summer, Gränges saw a large and accelerating cost increase in freight, energy and alloying elements. The effect on our profit was limited at first. But as the trend continued into the fourth quarter, it affected our operating profit negatively with approximately SEK 100 million. Price increases only partially offset these costs. As a result, our adjusted operating profit in the fourth quarter was reduced to SEK 139 million (193).
2021: A YEAR OF RECOVERY…
Volume in 2021 grew by almost 40 per cent to 489 ktonnes, a new all-time-high record. Adjusted operating profit rebounded to SEK 1,008 million (648), also a record, mainly driven by improved volume. We developed new ways of working together, both internally and with our suppliers and customers to create value despite the continuing pandemic. It was especially encouraging to see the very good cooperation with Gränges Konin during its first year in the Gränges family. And operational performance was good, although dramatic swings in demand and supply required hard work from all involved.
…AND OF INVESTMENT FOR THE FUTURE
During the year we also continued our very ambitious investment in capacity, operational improvement and future growth. The large expansion program in Konin is now nearing its completion, and both the new recycling and casting center and rolling mill are ramping up as planned. The automated logistics solution in Finspång already shows good promise. In
Gränges Americas, we have soon fully recovered from the unfortunate mill fire in May, and the investment in a new recycling and casting center is progressing well.
Even more important for the future are the large efforts to develop customer relations, technology and manufacturing technology for the fast-growing market for electric vehicles and battery technology. The first commercial deliveries to battery customers will begin in 2022, albeit at low volumes. It is encouraging to see a very strong interest from global customers in our capabilities in this area.
Cont. on next page
Cont. from previous page
GOOD PROGRESS ON SUSTAINABILITY
In 2021, we made good progress against our ambitious sustainability targets. Highlights include reducing our total carbon emissions, increasing our volumes of sourced recycled aluminium, emitting our first Sustainability-Linked Bond, and having more products with third-party verified sustainability information.
I'm also very proud that Gränges in the fourth quarter achieved a Platinum rating from the independent sustainability rating company EcoVadis, which placed us among the leading 1 per cent in our industry. During the fourth quarter, Gränges Finspång achieved Gränges' first certification against the Aluminium Stewardship Initiative (ASI) Chain of Custody Standard, followed by Gränges Shanghai in the beginning of 2022. This means that we can now offer customers verified sustainability credentials demonstrating that our products are responsibly sourced and produced.
PRICE AND VOLUME ACTIONS DRIVE GRADUAL RECOVERY DURING 2022
During the end of the year, the teams throughout Gränges have worked very hard to counter the effects of the dramatic changes in the world around us.
Analysts currently forecast the shortage of semiconductors to negatively impact automotive production during at least the first half of 2022. Gränges has therefore had full focus on sales to and production capacity for other market segments, where good demand is expected. We therefore expect volumes in the first quarter to increase sequentially to approximately the same level as in the strong first quarter of 2021.
Even more important, we have agreed with the majority of our customers on significant price increases and surcharges taking effect during the first half of 2022. Combined with a strong focus on cost and productivity in all our units, we expect these increases to offset a large part of the cost increases during the first quarter of 2022.
A GROWTH PLAN IN THE MAKING
Gränges has a good starting point: a global footprint, strong technical capabilities, solid long-term customer relations, industry leading sustainability performance and a strong team. On the other hand, the financial performance during 2021 was not satisfactory, especially against the backdrop of a generally strong economy.
However, the large investments made in the last few years are now beginning to bear fruit and will contribute fully from 2023. The timing is good, as the market outlook especially in the Americas and in Europe is favorable. Gränges is well positioned to take advantage of three strong current trends: the regionalization of supply chains, the electric vehicle revolution, and customer demands for more sustainable solutions.
Our main short-term priority is to secure volumes, price increases and cost productivity. But in parallel, we are also developing plans for the future. They aim at using our strengths and the promising market trends to restore our return on capital employed to its target range of 15–20 per cent, to drive growth, and to build an even stronger and more sustainable company for the future.
I'd like to take this opportunity to thank the whole Gränges team for an outstanding effort in 2021.
Jörgen Rosengren, CEO
Gränges achieved a Platinum rating from EcoVadis, and both Gränges Finspång and Gränges Shanghai achieved certification against the Aluminium Stewardship Initiative (ASI) Chain of Custody Standard.
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 representing 40 per cent of 2021 sales volume, HVAC representing 22 per cent of the sales volume, Speciality packaging and Other niches representing 17 per cent and 21 per cent respectively. Short term, sales to the automotive industry is primarily driven by the number of vehicles produced. Longer term, the increasing share of hybrid and electric vehicles is expected to have a further positive impact on demand for Gränges' products. Sales to the HVAC industry is short term driven by consumer confidence and the general activity within building and construction, whereas increased requirements on energy efficiency of HVAC units is expected to have a further positive impact on the demand for Gränges' products in the longer 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 fourth quarter 2021, demand remained strong in most of Gränges' end-customer markets that continued to recover from the COVID-19 pandemic last year. If excluding the sales volume from Gränges Konin, the demand for Automotive products did, however, decrease by 11 per cent compared with last year, due to the shortage of semiconductors that negatively impacted vehicle production. According to the research firm IHS¹ light vehicle production decreased by 13 per cent in the fourth quarter compared with the same quarter last year. Further IHS expects the light vehicle production to continue to decline year over year in the first quarter of 2022. Demand for HVAC products increased by 14 per cent in the fourth quarter driven by continued increase in HVAC unit production and an increase in market share. Demand for Specialty packaging materials and Other niches increased by 9 per cent and 17 per cent respectively in the fourth quarter.
SALES DEVELOPMENT
Gränges' sales volume in the fourth quarter of 2021 increased by 8.7 per cent to 112.3 ktonnes (103.3) and net sales by 54 per cent to SEK 4,857 million (3,149) compared to the same quarter previous year. Excluding Gränges Konin, sales volume increased by 1.8 per cent to 90.3 ktonnes and net sales by 45 per cent to SEK 4,018 million. The increase in net sales is driven by the higher sales volume in combination with an increased aluminium price. Changes in foreign exchange rates had a net positive effect of SEK 171 million.
For Gränges Eurasia, sales volume increased to 59.0 ktonnes (55.4) and net sales rose to SEK 2,526 million (1,720) during the fourth quarter of 2021. For Gränges Americas, sales volume increased to 56.9 ktonnes (54.9) and net sales rose to SEK 2,485 million (1,650). For Gränges Konin, sales volume was 22.0 ktonnes (14.6) and net sales amounted to SEK 840 million (388) during the fourth quarter.
For full year 2021, Gränges' sales volume increased by 39 per cent to 488.9 ktonnes (350.6) compared to the full year 2020. Net sales increased to SEK 18,130 million (11,008). Excluding Gränges Konin, sales volume increased by 18 per cent to 396.5 ktonnes and net sales by 43 per cent to SEK 15,146 million. Changes in foreign exchange rates had a net negative effect of SEK 720 million.
For Gränges Eurasia, sales volume increased to 263.5 ktonnes (154.0) and net sales rose to SEK 9,648 million (5,037) during 2021. For Gränges Americas, sales volume increased to 252.4 ktonnes (219.4) and net sales rose to SEK 9,488 million (6,748). For Gränges Konin, sales volume was 92.5 ktonnes and net sales amounted to SEK 2,984 million in 2021.
Asia Pacific
In the fourth quarter of 2021, sales volume in Asia Pacific decreased by 6 per cent to 19.6 ktonnes (20.9). The decrease was primarily driven by lower sales to Automotive customers while sales to Other niches grew significantly but from a low level.
For full year 2021, sales volume increased to 81.6 ktonnes (69.4) representing an increase of 18 per cent.
Sales volume growth excluding Gränges Konin Q4 2021
| End market | Automotive | HVAC | Speciality packaging | Other niches | Total | |||
|---|---|---|---|---|---|---|---|---|
| Asia Pacific | –13% | – | – | – | – | 43% | –6% | |
| Europe | –6% | – | – | – | – | 106% | 4% | |
| North and South America | –13% | 14% | 9% | 0% | 4% | |||
| Total | –11% | 14% | 9% | 17% | 2% |
1 Source: IHS, January 2022.
Europe
In the fourth quarter of 2021, sales volume in Europe increased by 32 per cent to 34.1 ktonnes (25.7). Excluding Gränges Konin, sales volume increased by 4 per cent to 12.6 ktonnes. The increase was driven by strong growth in sales to Other niches while Automotive sales declined compared with the same quarter last year.
For full year 2021, sales volume increased to 143.6 ktonnes (58.3) representing an increase of 146 per cent. Excluding Gränges Konin, sales volume increased by 27 per cent to 56.7 ktonnes.
North and South America
In the fourth quarter of 2021, sales volume in North and South America increased by 3 per cent to 58.6 ktonnes (56.7). Excluding Gränges Konin, sales volume increased by 4 per cent to 58.1 ktonnes. The increase in sales volume was driven by continued strong demand for materials to HVAC and Speciality packaging while Automotive sales declined. An extended stop for year-end maintenance reduced the available production capacity and restricted sales in the fourth quarter.
For full year 2021, sales volume increased to 263.7 ktonnes (222.9) corresponding to an increase of 18 per cent.
OPERATING PROFIT
Adjusted operating profit for the fourth quarter of 2021 decreased to SEK 139 million (193), corresponding to adjusted operating profit per tonne of 1.2 kSEK (1.9). Adjusted operating margin amounted to 2.9 per cent (6.1). Excluding Gränges Konin, adjusted operating profit decreased to SEK 107 million. The reduction in adjusted operating profit is primarily driven by significant inflationary cost pressure mainly related to energy, freight, and alloying elements, that could not be offset by price
increases during the quarter. Changes in foreign exchange rates had a net negative impact of SEK –10 million in the quarter.
Operating profit for the fourth quarter of 2021 decreased to SEK –21 million (167) and includes items affecting comparability of SEK –159 million (–27) related to a write-down of intangible assets mainly within IT, restructuring costs for corporate functions, and insurance compensation related to the fire in Newport earlier in the year. For further information see Note 5.
For full year 2021, adjusted operating profit increased to SEK 1,008 million (648), and adjusted operating profit per tonne rose to 2.1 kSEK (1.8). Excluding Gränges Konin, adjusted operating profit increased to SEK 852 million. Adjusted operating margin amounted to 5.6 per cent (5.9). Changes in foreign exchange rates had a negative impact of SEK –124 million for the full year.
Operating profit for full year 2021 increased to SEK 833 million (584) and includes items affecting comparability of SEK –175 million (–64). For further information see Note 5.
PROFIT FOR THE PERIOD AND EARNINGS PER SHARE
Profit before tax for the fourth quarter of 2021 decreased to SEK –46 million (131). Finance income and costs was SEK –25 million (–36). Income tax for the fourth quarter of 2021 was SEK 23 million (–25). The profit for the period amounted to SEK –23 million (106) during the fourth quarter of 2021 and diluted earnings per share was SEK –0.21 (1.19).
For full year 2021, profit before tax increased to SEK 743 million (454). Finance income and costs was SEK –92 million (–132). Income tax for the period was SEK –147 million (–91) which corresponds to an effective tax rate of 20 per cent (20). The profit for the period increased to SEK 595 million (363) and diluted earnings per share rose to SEK 5.58 (4.21).
Quarterly sales volume per region
Quarterly adjusted operating profit
CASH FLOW
Cash flow from operating activities was SEK 630 million (318) in the fourth quarter of 2021. Working capital and other non-cash items impacted cash flow with SEK 518 million primarily driven by the sequentially lower business activity in the quarter. Cash flow from investing activities amounted to SEK –338 million (–1,335) in the quarter of which SEK –325 million relates to capital expenditure and SEK –12 million to additional purchase price considerations for the acquisition of Gränges Konin. Of the capital expenditure, SEK 166 million refers to investments to maintain and improve efficiency in current production facilities and SEK 159 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 463 million (232) in the fourth quarter. Cash flow from financing activities was SEK –580 million (1,628) in the fourth quarter of 2021 and includes new loans of SEK 2,417 million and repayment of loans of SEK –2,976 million.
For full year 2021, cash flow from operating activities was SEK 988 million (1,414). Cash flow from investing activities amounted to SEK –926 million (–1,736) in the period. This includes additional purchase considerations of SEK 26 million for the acquisition of Gränges Konin and the purchase price of 64 million for the acquisition of DISPAL®, see Note 7 for further information. Total capital expenditure was SEK 836 million in the period. Of this, SEK 380 million relates to investments to maintain and improve efficiency in current production facilities and SEK 456 million refers to investments related to the expansion of the production facilities.
Cash flow before financing activities amounted to SEK 62 million (–322) for full year 2021. Cash flow from financing activities was SEK –793 million (1,149) during 2021 and includes a dividend payment of SEK –117 million, new loans of SEK 6,466 million and repayment of loans of SEK –7,061 million.
Cash and cash equivalents amounted to SEK 809 million at 31 December 2021 (SEK 1,473 million 31 December 2020).
FINANCIAL POSITION
Gränges' total assets amounted to SEK 15,767 million at 31 December 2021 (SEK 13,652 million at 31 December 2020). The equity to assets ratio was 44.0 per cent at 31 December 2021 (43.7 per cent at 31 December 2020).
Consolidated net debt including pension and lease liabilities was SEK 3,643 million at 31 December 2021 (SEK 3,292 million at 31 December 2020), corresponding to 2.2 times adjusted EBITDA1 (2.2 times at 31 December 2020).
EMPLOYEES
The average number of employees was 2,682 (2,297) in the fourth quarter of 2021 and 2,648 (1,792) during the full year 2021. The increased number of employees for the full year is mainly related to the acquisition of Aluminium Konin in the fourth quarter last year.
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 communications. For the period January–December 2021, net sales in the parent company was SEK 142 million (169). Result for the full year was SEK –63 million (122). The result for previous year includes dividend from the Chinese subsidiary of SEK 194 million.
SUSTAINABILITY
In November, Gränges Finspång achieved Gränges' first certification against the Aluminium Stewardship (ASI) Chain of Custody Standard, followed by Gränges Shanghai in January 2022. The certification demonstrates that Gränges' products are responsibly sourced and produced and provides assurance to customers and other business partners that Gränges is strongly committed to meeting the increased sustainability requirements and demand for sustainable aluminium. In conjunction with the ASI CoC Standard certification, Gränges Finspång also achieved a full ASI Performance Standard certification, updated from a provisional status due to the COVID-19 situation. Gränges' production facility in Shanghai was certified against ASI's Performance Standard in 2019, and the company aims to certify all production sites in accordance with the ASI sustainability certifications by 2025.
In December, Gränges was awarded a Platinum rating from Eco-Vadis, the largest independent provider of business sustainability ratings. Platinum is the highest rating awarded by EcoVadis and it places Gränges among the leading 1 per cent of companies assessed globally in its industry. The sustainability rating demonstrates that Gränges has efficiently integrated sustainability principles into its business and that successful results have been achieved across the four categories assessed: environment, labour and human rights, sustainable procurement, and ethics.
For the full year 2021, Gränges made good progress against many of its sustainability targets to 2025. Examples include a continued reduction in total carbon emissions intensity, an increased share of sourced recycled aluminium, and a higher share of products with third-party verified sustainability information. All sustainability performance data will be presented in the Annual and Sustainability Report which will be published in March 2022.
From the first quarter of 2022, Gränges intends to publicly disclose selected sustainability performance data in the quarterly reports.
1 Includes adjusted EBITDA for acquisitions as a part of Gränges Group for 12 months, see alternative performance measures for further information.
GRÄNGES EURASIA
- Weak Automotive demand due to semiconductor shortage
- Continued strong demand in other end-customer markets
- Significant margin pressure from increasing cost for energy, freight, and alloying elements
MARKET AND SALES
Gränges Eurasia experienced a continued slow-down of demand from Automotive customers in the fourth quarter of 2021 driven by the semiconductor shortage. Demand in other end-customer markets remained strong and the decline in Automotive sales was partly offset by increased sales to Other niches. The sales volume in the fourth quarter reached 59.0 ktonnes, which represents a 6.4 per cent growth over the fourth quarter last year but a 3.1 per cent decline over the third quarter 2021. Net sales increased by 47 per cent to SEK 2,526 million (1,720) compared to the same quarter previous year. Excluding the sales from Gränges Konin, the fourth quarter sales volume decreased by 9.5 per cent but the net sales increased by 27 per cent compared with the same period last year. Changes in foreign exchange rates had a positive effect on net sales of SEK 85 million.
For full year 2021, sales volume increased by 71 per cent to 263.5 ktonnes (154.0) compared to the full year 2020. Net sales increased to SEK 9,648 million (5,037). Excluding Gränges Konin, sales volume increased by 23 per cent to 171.0 ktonnes and net sales by 43 per cent to SEK 6,664 million.
OPERATING PROFIT
The adjusted operating profit for the fourth quarter 2021 decreased to SEK 47 million (110), corresponding to an adjusted operating profit per tonne of 0.8 kSEK (2.0). Excluding the adjusted operating profit from Gränges Konin of SEK 31 million, it decreased to SEK 16 million (91), corresponding to an adjusted operating profit per tonne of 0.4 kSEK. The reduction in adjusted operating profit was primarily driven by significant inflationary cost pressure mainly related to energy, freight, and alloying elements, that could not be offset by price increases during the quarter. Changes in foreign exchange rates had a negative impact of SEK –8 million in the quarter. Items affecting comparability amounted to SEK –149 million mainly related to write-down of intangible assets within IT. For further information see Note 5.
For full year 2021, adjusted operating profit increased to SEK 446 million (176), and adjusted operating profit per tonne rose to 1.7 kSEK (1.1). Excluding Gränges Konin, adjusted operating profit increased to SEK 290 million. Adjusted operating margin amounted to 4.6 per cent (3.5). Operating profit amounted to SEK 280 million (121) and Return on capital employed was 6.8 per cent on a rolling 12-months basis.
Financial summary Q4 Jan–Dec
SEK million 2021 2020 2021 2020
Sales volume external, ktonnes 55.4 48.3 14.7% 236.6 131.5 79.9% Sales volume internal, ktonnes 3.6 7.1 –49.5% 26.9 22.5 19.7% Total sales volume, ktonnes 59.0 55.4 6.4% 263.5 154.0 71.1% Net sales, external 2,362 1,488 58.7% 8,627 4,262 102.4% Net sales, internal 164 231 –29.2% 1,021 775 31.7% Total net sales 2,526 1,720 46.9% 9,648 5,037 91.5% Adjusted operating profit 47 110 –57.0% 446 176 153.6% Operating profit –102 80 n/a 280 121 132.4% Adjusted operating margin, % 1.9 6.4 –4.5 ppt 4.6 3.5 1.1 ppt Adjusted operating profit per tonne, kSEK 0.8 2.0 –59.6% 1.7 1.1 48.2% Return on capital employed, % – – – 6.8 4.6 2.2 ppt
Adjusted operating profit
GRÄNGES AMERICAS
- Continued strong market conditions except in Automotive
- Sales volume negatively impacted by planned additional maintenance activities
- Significant margin pressure from increasing cost for energy, freight, and alloying elements
MARKET AND SALES
Gränges Americas experienced a continued strong demand from HVAC and Speciality packaging customers in the fourth quarter of 2021, while demand from Automotive customers slowed down due to the continued semiconductor shortage. In addition, the available production capacity was reduced by approximately 8 ktonnes in the fourth quarter due to extended planned maintenance of the Huntingdon rolling mill, which further limited sales volume in the quarter. The sales volume in the fourth quarter increased by 3.5 per cent to 56.9 ktonnes (54.9) and net sales increased by 51 per cent to SEK 2,485 million (1,650) compared to the same quarter previous year. Changes in foreign exchange rates had a positive effect on net sales of SEK 85 million.
For full year 2021, sales volume increased by 15 per cent to 252.4 ktonnes (219.1) compared to the full year 2020. Net sales increased to SEK 9,488 million (6,748).
OPERATING PROFIT
The adjusted operating profit for the fourth quarter 2021 decreased to SEK 73 million (108), corresponding to an adjusted operating profit per tonne of 1.3 kSEK (2.0). The reduction in adjusted operating profit was primarily driven by significant inflationary cost pressure mainly related to energy, freight, and alloying elements, that could not be fully offset by price increases and higher sales volume during the quarter. Net changes in foreign exchange rates had a negative impact of SEK –3 million in the quarter. Items affecting comparability amounted to SEK 36 million in the quarter mainly related to insurance compensation for the fire in Newport earlier in the year. For further information see Note 5.
For full year 2021, adjusted operating profit increased to SEK 655 million (503), and adjusted operating profit per tonne rose to 2.6 kSEK (2.3). Adjusted operating margin amounted to 6.9 per cent (7.5). Operating profit amounted to SEK 691 million (498) and Return on capital employed was 16.9 per cent on a rolling 12-months basis.
Sales volume
ktonnes
Adjusted operating profit
Adjusted operating profit per tonne
| Q4 | Jan–Dec | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||
| 56.9 | 54.9 | 3.5% | 252.4 | 219.1 | 15.2% | |
| – | – | – | – | – | – | |
| 56.9 | 54.9 | 3.5% | 252.4 | 219.1 | 15.2% | |
| 2,498 | 1,652 | 51.2% | 9,502 | 6 725 | 41.3% | |
| –13 | –3 | n/a | –14 | 24 | n/a | |
| 2,485 | 1,650 | 50.7% | 9,488 | 6,748 | 40.6% | |
| 73 | 108 | –32.2% | 655 | 503 | 30.2% | |
| 109 | 103 | 5.9% | 691 | 498 | 38.7% | |
| 2.9 | 6.5 | –3.6 ppt | 6.9 | 7,5 | –0.6 ppt | |
| 1.3 | 2.0 | –34.5% | 2.6 | 2.3 | 13.2% | |
| – | – | – | 16.9 | 11.8 | 5.1 ppt | |
SIGNIFICANT EVENTS DURING THE PERIOD
Jörgen Rosengren assumed his position as President and CEO Jörgen Rosengren assumed his position as President and CEO
of Gränges on 1 October 2021.
Changes in Group Management
In November, Torbjörn Sternsjö, previously President Europe, moved into a new role with a focus on global business development projects. Jörgen Rosengren, Gränges' CEO, is Interim President Europe until a successor has been recruited.
Gränges Finspång achieved ASI Chain of Custody certification
In November, Gränges Finspång successfully achieved Gränges' first certification according to the Aluminium Stewardship Initiative Chain of Custody Standard. In conjunction with the ASI CoC Standard certification, Gränges Finspång also achieved a full ASI Performance Standard certification, updated from a provisional status due to the COVID-19 situation. Read more on page 6.
Gränges achieved EcoVadis Platinum – ranked top 1 per cent in global sustainability rating
In November, Gränges was awarded a Platinum rating from EcoVadis, the largest independent provider of business sustainability ratings. Platinum is the highest rating awarded by EcoVadis and it places Gränges among the leading 1 per cent of companies assessed in its industry globally. Read more on page 6.
Strengthened European team and simplified organization
In December, Gränges strengthened the European team and simplified the organization by decentralizing responsibility. Specifically, the corporate functions for Innovation, IT/Digitalization, Human Resources, Process Engineering & Operational Development and Legal were integrated into Gränges Europe. The changes led to restructuring costs of SEK 200 million in the fourth quarter, of which SEK 160 million was a non-cash writedown of intangible assets, mainly within IT. The changes generate annual cost savings of SEK 40 million from January 2022. After the changes, Gränges' Group Management consists of CEO, CFO, SVP Sustainability, President Europe, President Americas and President Asia.
SIGNIFICANT EVENTS AFTER THE PERIOD Gränges Shanghai achieved ASI Chain of Custody certification
In January 2022, Gränges Shanghai successfully achieved certification against the Aluminium Stewardship Initiative Chain of Custody (CoC) Standard. This was Gränges' second CoC Standard certification and an important step in the company's sustainability agenda and commitment to develop sustainable aluminium products and solutions. Read more on page 6.
No other 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 known shareholders in Gränges was 10,970 on 31 December 2021, according to Euroclear.
Largest shareholders in Gränges at 31 December 2021¹
| Number of | Share of capital | |
|---|---|---|
| Shareholder | shares | and votes % |
| Fourth Sw. National Pension Fund | 9,864,534 | 9.3 |
| AFA Insurance | 6,643,492 | 6.2 |
| Swedbank Robur Funds | 5,203,611 | 4.9 |
| Handelsbanken Funds | 4,754,272 | 4.5 |
| Dimensional Fund Advisors | 4,352,258 | 4.1 |
| Allianz Global Investors | 3,482,939 | 3.3 |
| Vanguard | 3,323,992 | 3.1 |
| T. Rowe Price | 3,078,748 | 2.9 |
| Columbia Threadneedle | 2,482,719 | 2.3 |
| Norges Bank | 2,211,360 | 2.1 |
| Total 10 largest shareholders | 45,397,925 | 42.7 |
| Other | 60,910,693 | 57.3 |
| Total | 106,308,618 | 100 |
¹ Source: Modular Finance.
OTHER
Annual General Meeting 2022
Gränges' 2022 Annual General Meeting will be held on Wednesday 4 May 2022 at 16.00 CEST at IVA Conference Center (Wallenbergsalen), Grev Turegatan 16, Stockholm. Shareholders who wish to have a matter considered at the Annual General Meeting should normally submit such requests seven weeks before the meeting at the latest.
Annual and Sustainability Report 2021
Gränges' Annual and Sustainability Report for 2021 is expected to be published on 17 March 2022 on the company's website. A printed version of the report can be ordered at [email protected].
Dividend
The Board of Directors proposes a dividend of SEK 2.25 (1.10) per share for the 2021 fiscal year, in total SEK 239 million (117). The proposed dividend corresponds to 40 per cent (32) of the profit for the year 2021. The record date for the dividend will be communicated in conjunction with the notice to the Annual General Meeting.
RISKS AND UNCERTAINTY FACTORS
As a 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 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 39–44 in Gränges' 2020 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.
Stockholm, 27 January 2022
Jörgen Rosengren Chief Executive Officer
This year-end 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] Tel: +46 8 459 59 00
Gunilla Björksiöö, IR Coordinator E-mail: [email protected] Tel: +46 701 49 95 63
This information is information that Gränges AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, on Thursday 27 January 2022 at 07.30 CET.
Webcasted telephone conference
CEO Jörgen Rosengren and CFO Oskar Hellström will present Gränges' year-end report for January–December 2021 at a webcasted conference call at 10.00 CET, Thursday 27 January, 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
| 17 March, 2022 | Annual Report 2021 |
|---|---|
| 21 April, 2022 | Interim Report, January–March 2022 |
| 4 May, 2022 | Annual General Meeting 2022 |
| 15 July, 2022 | Half-year Report 2022 |
CONSOLIDATED INCOME STATEMENT (CONDENSED)
| SEK million | Note | Oct–Dec 2021 |
Oct–Dec 2020 |
Jan–Dec 2021 |
Jan–Dec 2020 |
|---|---|---|---|---|---|
| Net sales | 2 | 4,857 | 3,149 | 18,130 | 11,008 |
| Cost of materials | 5 | –3,523 | –1,9832 | –12,4431 | –6,7782 |
| Payroll and other operating expenses | –1,035 | –856 | –4,016 | –3,059 | |
| Depreciation, amortization and impairment charges | –161 | –148 | –678 | –553 | |
| Items affecting comparability | 5 | –159 | 4 | –159 | –33 |
| Operating profit | –21 | 167 | 833 | 584 | |
| Profit or loss from joint ventures | 4 | 1 | 1 | 2 | 2 |
| Finance income and costs | –25 | –36 | –92 | –132 | |
| Profit before tax | –46 | 131 | 743 | 454 | |
| Income tax | 6 | 23 | –25 | –147 | –91 |
| Profit for the period | –23 | 106 | 595 | 363 | |
| Profit for the period attributable to | |||||
| – owners of the parent company | –23 | 106 | 595 | 363 | |
| – non-controlling interests | 0 | 0 | 0 | 0 | |
| Earnings per share | |||||
| Earnings per share basic, SEK | –0.21 | 1.19 | 5.60 | 4.21 | |
| Earnings per share diluted, SEK | –0.21 | 1.19 | 5.58 | 4.21 |
1 Includes items affecting comparability of SEK –16 million, see Note 5 for further information.
2 Includes items affecting comparability of SEK –31 million, see Note 5 for further information.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (CONDENSED)
| SEK million | Oct–Dec 2021 |
Oct–Dec 2020 |
Jan–Dec 2021 |
Jan–Dec 2020 |
|---|---|---|---|---|
| Profit for the period | –23 | 106 | 595 | 363 |
| Items not to be reclassified to profit/loss in subsequent periods | ||||
| Remeasurement of pensions after tax | –4 | 19 | 17 | 1 |
| Items to be reclassified to profit/loss in subsequent periods | ||||
| Change in hedging reserve after tax | 27 | 93 | –88 | 61 |
| Translation effects | 186 | –384 | 466 | –463 |
| Comprehensive Income for the period | 187 | –165 | 990 | –37 |
| Comprehensive income for the period attributable to |
||||
| – owners of the parent company | 187 | –165 | 990 | –37 |
| – non-controlling interests | 0 | 0 | 0 | 0 |
CONSOLIDATED BALANCE SHEET (CONDENSED)
| SEK million | Note | 31 Dec 2021 | 31 Dec 2020 |
|---|---|---|---|
| ASSETS | |||
| Intangible assets | 1,407 | 1,510 | |
| Property, plant and equipment | 6,724 | 6,066 | |
| Deferred tax assets | 55 | 20 | |
| Investments in joint ventures | 4 | 16 | 13 |
| Other non-current receivables | 3 | 122 | 24 |
| Non-current assets | 8,323 | 7,633 | |
| Inventories | 3,933 | 2,398 | |
| Receivables | 3 | 2,696 | 2,021 |
| Interest-bearing receivables | 3 | 5 | 128 |
| Cash and cash equivalents | 809 | 1,473 | |
| Current assets | 7,444 | 6,020 | |
| TOTAL ASSETS | 15,767 | 13,652 | |
| EQUITY AND LIABILITIES | |||
| Share capital | 142 | 142 | |
| Retained earnings | 6,789 | 5,828 | |
| Equity | 6,932 | 5,970 | |
| Interest-bearing liabilities | 3 | 2,414 | 2,351 |
| Provisions and other non-current liabilities | 3 | 882 | 718 |
| Non-current liabilities | 3,297 | 3,068 | |
| Interest-bearing liabilities | 3 | 1,694 | 2,184 |
| Provisions and other current liabilities | 3 | 3,844 | 2,429 |
| Current liabilities | 5,539 | 4,614 | |
| TOTAL EQUITY AND LIABILITIES | 15,767 | 13,652 |
CONSOLIDATED CHANGES IN EQUITY (CONDENSED)
| SEK million | 31 Dec 2021 | 31 Dec 2020 |
|---|---|---|
| Opening balance | 5,968 | 4,314 |
| Profit for the period | 595 | 363 |
| Other comprehensive income for the period | 395 | –401 |
| Total comprehensive income for the period | 990 | –37 |
| Dividend | –117 | – |
| Share swap | 88 | –193 |
| Option premium | – | 8 |
| Issue in kind | – | 215 |
| Rights issue | – | 1,662 |
| Total transactions with owners | –29 | 1,691 |
| Equity attributable to owners of the parent company | 6,930 | 5,968 |
| Equity attributable to non-controlling interests | 2 | 2 |
| Closing balance | 6,932 | 5,970 |
CONSOLIDATED STATEMENT OF CASH FLOWS (CONDENSED)
| SEK million | Note | Oct–Dec 2021 |
Oct–Dec 2020 |
Jan–Dec 2021 |
Jan–Dec 2020 |
|---|---|---|---|---|---|
| Operating profit | –21 | 167 | 833 | 584 | |
| Depreciation, amortization and impairment charges | 161 | 148 | 678 | 553 | |
| Other non-cash items | 5 | 199 | 20 | 215 | 45 |
| Change in working capital etc. | 319 | 12 | –623 | 290 | |
| Income taxes paid | –28 | –29 | –116 | –59 | |
| Cash flow from operating activities | 630 | 318 | 988 | 1,414 | |
| Acquisitions | 7 | –12 | –1,196 | –90 | –1,196 |
| Investments in property, plant, equipment and | |||||
| intangible assets | –325 | –205 | –836 | –557 | |
| Divestments | – | 17 | – | 17 | |
| Other capital transactions | – | 49 | – | – | |
| Cash flow from investing activities | –338 | –1,335 | –926 | –1,736 | |
| Cash flow before financing activities | 292 | –1,017 | 62 | –322 | |
| Dividend | – | – | –117 | – | |
| Share swaps | – | –193 | – | –193 | |
| Option premium | – | 8 | – | 8 | |
| Rights issue | – | 1,662 | – | 1,662 | |
| Interest paid and received | –20 | –37 | –82 | –142 | |
| New loans | 2,417 | 3,196 | 6,466 | 5,785 | |
| Repayment of loans | –2,976 | –3,008 | –7,061 | –5,970 | |
| Cash flow from financing activities | –580 | 1,628 | –793 | 1,149 | |
| Cash flow for the period | –288 | 611 | –732 | 827 | |
| Cash and cash equivalents at beginning of period | 1,074 | 923 | 1,473 | 747 | |
| Cash flow for the period | –288 | 611 | –732 | 827 | |
| Exchange rate differences in cash and cash equivalents |
22 | –60 | 67 | –101 | |
| Cash and cash equivalents at end of period | 809 | 1,473 | 809 | 1,473 |
PARENT COMPANY INCOME STATEMENT (CONDENSED)
| SEK million | Oct–Dec 2021 |
Oct–Dec 2020 |
Jan–Dec 2021 |
Jan–Dec 2020 |
|---|---|---|---|---|
| Net sales | 52 | 38 | 142 | 169 |
| Payroll and other operating expenses | –102 | –78 | –253 | –249 |
| Depreciation, amortization and impairment charges | –2 | –5 | –8 | –21 |
| Operating profit/loss | –51 | –45 | –119 | –101 |
| Dividends from subsidiaries | 0 | 194 | 0 | 194 |
| Finance income and costs | 14 | –15 | 41 | –13 |
| Profit/loss after financial items | –37 | 134 | –78 | 80 |
| Appropriations | 0 | 30 | 0 | 30 |
| Income tax | 5 | 3 | 15 | 12 |
| Profit/loss for the period | –32 | 167 | –63 | 122 |
PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME (CONDENSED)
| SEK million | Oct–Dec 2021 |
Oct–Dec 2020 |
Jan–Dec 2021 |
Jan–Dec 2020 |
|---|---|---|---|---|
| Profit for the period | –32 | 167 | –63 | 122 |
| Items to be reclassified to profit/loss in subsequent periods | ||||
| Change in hedging reserve after tax | – | 42 | – | 1 |
| Comprehensive income for the period attributable to owners of the parent company |
–32 | 209 | –63 | 123 |
PARENT COMPANY BALANCE SHEET (CONDENSED)
| SEK million | 31 Dec 2021 | 31 Dec 2020 |
|---|---|---|
| ASSETS | ||
| Intangible assets | 0 | 33 |
| Property, plant and equipment | 2 | 170 |
| Shares in Group companies | 2,906 | 2,891 |
| Deferred tax assets | 47 | 27 |
| Receivables from Group companies | 2,659 | 1,579 |
| Other non-current receivables | 105 | 5 |
| Non-current assets | 5,718 | 4,706 |
| Receivables from Group companies | 649 | 870 |
| Other receivables | 129 | 248 |
| Cash and cash equivalents | 446 | 736 |
| Current assets | 1,224 | 1,853 |
| TOTAL ASSETS | 6,942 | 6,559 |
| EQUITY AND LIABILITIES | ||
| Restricted equity | 142 | 151 |
| Non-restricted equity | 3,279 | 3,362 |
| Equity | 3,422 | 3,513 |
| Interest-bearing liabilities | 1,095 | 698 |
| Provisions and other non-current liabilities | 34 | 32 |
| Non-current liabilities | 1,129 | 730 |
| Liabilities to Group companies | 696 | 262 |
| Interest-bearing liabilities | 1,474 | 1,865 |
| Provisions and other current liabilities | 221 | 189 |
| Current liabilities | 2,391 | 2,316 |
| TOTAL EQUITY AND LIABILITIES | 6,942 | 6,559 |
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) 2020. 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 2021 or later have not had any material impact on this financial report.
Operating segments
Following recent years' successful growth initiatives that have resulted in a larger production footprint and a more diverse product portfolio Gränges sees an opportunity to further increase efficiency and transparency by grouping the different businesses based on production technology and end-customer markets. As of the first quarter of 2021 Gränges established two business areas: Gränges Eurasia and Gränges Americas. Gränges Eurasia includes the three rolling mills with direct chill casting and hot rolling technology in Finspång, Sweden, Konin, Poland, and Shanghai, China, as well as the newly established Gränges Powder Metallurgy business unit in Saint-Avold, France. The largest end-customer market for Gränges Eurasia is heat exchanger material for the automotive industry. Gränges Americas includes the three rolling mills in Huntingdon, Salisbury, and Newport with continuous casting technology. The largest end-customer markets for Gränges Americas are heat exchanger material for the HVAC industry and speciality packaging material. Gränges Americas also serves as a distributor of heat exchanger material for the automotive industry from Gränges Eurasia on the North and South American market. Gränges Eurasia is headed by the CEO and Gränges Americas is headed by the Regional President for the Americas region.
The grouping of the businesses into two business areas, Gränges Eurasia and Gränges Americas, is considered to constitute the Group's operating segments and is consistent with the internal reporting submitted to the highest executive decision maker, which consists of the CEO. Group functions and other items that cannot be allocated to Gränges Eurasia or Gränges Americas are reported in Other and eliminations. The segment reporting presents volume, net sales, adjusted operating profit, operating profit, capital employed and return on capital employed for each segment. Financial items and taxes are reported and followed up for the Group as a whole. No detailed breakdown is presented for number of employees or items in the balance sheet, in addition to capital employed. Capital employed does not include any tax items or accrued interest per business area.
The interim information on pages 2–18 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. The tables below show Gränges' net sales by geographical region and by business area divided by type of revenue.
| SEK million | Oct–Dec 2021 |
Oct–Dec 2020 |
Jan–Dec 2021 |
Jan–Dec 2020 |
|---|---|---|---|---|
| Net sales by region | ||||
| Asia Pacific | 907 | 669 | 3,187 | 2,268 |
| Europe | 1,385 | 774 | 5,052 | 1,875 |
| North and South America | 2,558 | 1,702 | 9,820 | 6,848 |
| Total revenue from contracts with customers | 4,850 | 3,145 | 18,059 | 10,991 |
| Other revenue | 7 | 4 | 71 | 17 |
| Net sales | 4,857 | 3,149 | 18,130 | 11,008 |
| SEK million | Oct–Dec 2021 |
Oct–Dec 2020 |
Jan–Dec 2021 |
Jan–Dec 2020 |
|---|---|---|---|---|
| Net sales by business area | ||||
| Gränges Eurasia | ||||
| Fabrication revenue | 892 | 1,003 | 3,861 | 2,642 |
| Raw material and other revenue | 1,630 | 717 | 5,773 | 2,395 |
| Revenue from contracts with customers | 2,522 | 1,720 | 9,633 | 5,037 |
| Other revenue | 4 | – | 15 | – |
| Total net sales Gränges Eurasia | 2,526 | 1,720 | 9,648 | 5,037 |
| Gränges Americas | ||||
| Fabrication revenue | 746 | 683 | 3,182 | 2,855 |
| Raw material and other revenue | 1,736 | 967 | 6,251 | 3,893 |
| Revenue from contracts with customers | 2,482 | 1,650 | 9,432 | 6,748 |
| Other revenue | 4 | – | 56 | – |
| Total net sales Gränges Americas | 2,485 | 1,650 | 9,488 | 6,748 |
| Other and eliminations | ||||
| Fabrication revenue | –87 | –144 | –588 | –512 |
| Raw material and other revenue | –67 | –80 | –419 | –282 |
| Revenue from contracts with customers | –153 | –224 | –1,007 | –794 |
| Other revenue | – | 4 | – | 17 |
| Total net sales other and eliminations | –153 | –220 | –1,007 | –778 |
| Total fabrication revenue | 1,551 | 1,541 | 6,454 | 4,985 |
| Total raw material and other revenue | 3,299 | 1,604 | 11,604 | 6,006 |
| Total revenue from contracts with customers | 4,850 | 3,145 | 18,059 | 10,991 |
| Total other revenue | 7 | 4 | 71 | 17 |
| Total net sales | 4,857 | 3,149 | 18,130 | 11,008 |
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 | 31 Dec 2021 | 31 Dec 2020 |
|---|---|---|
| Non-current assets | 105 | 6 |
| Current assets | 134 | 249 |
| Non-current liabilities | 1 | – |
| Current liabilities | 249 | 138 |
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 December 31 2021, the amount of outstanding term loans was USD 150 million and SEK 200 million. Gränges' revolving credit facilities amounted to SEK 2,000 million and were unutilized as per December 31 2021. Financing from banks and institutions also includes working capital loans of CNY 50 million. The commercial paper program was increased from SEK 1,500 million to SEK 2,000 million during the fourth quarter 2021. The amount of outstanding commercial papers was SEK 1,200 million.
The loan facilities are subject to covenants, which are Net Debt/EBITDA and Interest coverage ratio.
| SEK million | Year | ||||
|---|---|---|---|---|---|
| Limit/Program amount |
< 1 | 1–2 | > 2 | Total | |
| Term loans | |||||
| SEK | – | – | 200 | 200 | |
| USD | 226 | 226 | 905 | 1,357 | |
| Bonds in MTN programme | 3,000 | – | 300 | 600 | 900 |
| Commercial papers | 2,000 | 1,200 | – | – | 1,200 |
| Revolving Credit Facilities | 2,000 | – | – | – | – |
| Lease liabilities | 44 | 36 | 156 | 236 | |
| Other interest-bearing liabilities | 224 | – | –8 | 216 | |
| Total interest-bearing liabilities | 1,694 | 562 | 1,852 | 4,109 |
Interest-bearing liabilities are measured at amortized cost and the carrying amount as of 31 December 2021 was SEK 4,109 million (SEK 4,535 million as of 31 December 2020). The fair value of interest-bearing liabilities amounted to SEK 4,117 million as of 31 December 2021 (SEK 4,547 million as of 31 December 2020). 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 2020 Annual Report. During the period there have been no significant transactions with related parties.
NOTE 5 ITEMS AFFECTING COMPARABILITY
| SEK million | Financial statement line | Oct–Dec 2021 |
Oct–Dec 2020 |
Jan–Dec 2021 |
Jan–Dec 2020 |
|---|---|---|---|---|---|
| Write-down of intangible assets | Items affecting comparability | –158 | – | –158 | – |
| Restructuring costs | Items affecting comparability | –42 | 11 | –42 | –14 |
| Insurance compensation | Items affecting comparability | 40 | – | 40 | – |
| Realisation of fair value inventory step-up | Cost of materials | ||||
| on acquired business | – | –31 | –16 | –31 | |
| M&A costs | Items affecting comparability | – | –6 | – | –19 |
| Items affecting comparability | –159 | –27 | –175 | –64 |
Gränges has during the fourth quarter decided to simplify its organization by decentralizing the responsibility for innovation, digitalization and continuous improvement. The decentralization of digitalization has led to that certain investments in group-wide IT systems are no longer relevant, and these have been written down by SEK 138 million. Remaining write-down of SEK 19 million refers to other intangible assets. The simplified organization has also led to restructuring to a cost of SEK 42 million in the fourth quarter. None of the items affect the cash flow.
In the second quarter 2021, a fire occurred in one of the rolling mills in the Newport facility in US. The event is covered by property damage and interruption insurance with a deductible of SEK 10 million. Insurance compensation, less deductible, corresponding to the costs for the fire have been reported as part of adjusted operating profit. Insurance compensation in addition to cost coverage and deductible, amounting to SEK 40 million, is handled as an item affecting comparability. The insurance claim has not been settled yet and additional compensation may be obtained.
In the fourth quarter previous year Gränges acquired Aluminium Konin. The costs for the acquisition amounted to SEK 19 million and were reported as an item affecting comparability in 2020. All of Aluminium Konin's assets were valued at fair value by Gränges, as was the inventory. Upon sale of the acquired inventory, the difference between fair value and book value was realized. The amount was reported in the financial statement line cost of materials and deemed to be an item affecting comparability. The item amounted to SEK 16 million for the first quarter 2021 and the corresponding amount for 2020 was SEK 31 million. For further information on the acquisition, see Note 7.
Restructuring costs for the full year 2020 refer to the organizational changes in Gränges' Swedish and US operations.
NOTE 6 TAX
Gränges' Chinese subsidiary has for tax purpose received a pre-qualification as a High and New-Technology Enterprise for the three-year period 2019 to 2021. The pre-qualification means that the company preliminarily pays 15 per cent in corporate income tax instead of the ordinary tax of 25 per cent for the period. In order to finally obtain the lower tax rate, the company must meet special requirements established by the authorities in China for each one of the three years. Gränges currently considers it to be more likely than not that the special requirements will be met for the financial year 2021 and therefore applies a tax rate of 15 per cent for the Chinese subsidiary.
NOTE 7 ACQUISITIONS
Aluminium Konin
In the fourth quarter 2020 Gränges acquired Aluminium Konin, a Polish flat rolled aluminium producer. The acquired business was consolidated from November 2020. The preliminary purchase price allocation was updated during the first quarter 2021 with SEK 3 million (PLN 1 million). Additional update of SEK 12 million (PLN 5 million) has been done during the fourth quarter 2021, the adjustment has increased the purchase price and net identifiable assets and liabilities. No further adjustments are expected, and the purchase price allocation is determined as below.
| Intangible assets Property, plant and equipment Other non-current receivables Inventories |
138 624 15 |
335 1,514 |
|---|---|---|
| 35 | ||
| 242 | 586 | |
| Other current receivables | 159 | 388 |
| Cash and cash equivalents | 24 | 57 |
| Interest-bearing liabilities | 507 | 1,231 |
| Provision and other liabilities | 290 | 704 |
| Net identifiable assets and liabilities | 406 | 981 |
| Goodwill | 204 | 495 |
| Purchase price | 611 | 1,476 |
| Issue in kind of new issued shares in Gränges | 90 | 215 |
| Paid cash for the acquisition | 521 | 1,261 |
| Purchase price | 611 | 1,476 |
| Less issue in kind of new issued shares in Gränges | –90 | –215 |
| Less cash and cash equivalents in acquired operation | –24 | –57 |
| Effect on the Group's cash and cash equivalents | –497 | –1,204 |
GETEK
In 2020 it was announced that Gränges would acquire the remaining 49 per cent of the shares in GETEK GmbH as well as the business DISPAL®. GETEK was until 1 October 2020 jointly owned by Gränges (51 per cent) and Erbslöh (49 per cent) and classified as a joint operation. Gränges has recognized its direct right to jointly owned assets, liabilities, revenues and expenses in the financial statements since 2017. The acquisition of the remaining 49 per cent shares in GETEK was done 1 October 2020 and the operation has been consolidated in full since then. The DISPAL® business was acquired 1 January 2021 and is included from 2021.
The preliminary acquisition balance presented at 31 December 2020 was updated during the first quarter 2021 due to updated fair value valuations of the net assets and adjustment of the purchase price. No further updates have been done during 2021 and the purchase price allocation is determined as below.
| Purchase price allocation GETEK | EUR million | SEK million |
|---|---|---|
| Non-current assets | 6.5 | 66 |
| Current assets, excluding cash | 2.7 | 27 |
| Cash and cash equivalents | 0.1 | 1 |
| Non-current liabilities | 1.0 | 10 |
| Current liabilities | 1.0 | 11 |
| Net identifiable assets and liabilities | 7.2 | 73 |
| Goodwill | 5.3 | 52 |
| Purchase price | 12.5 | 124 |
| Initial investment in joint operation | 4.6 | 44 |
| Paid cash | 8.0 | 80 |
| Purchase price | 12.6 | 124 |
| Less initial investment in joint operation | –4.6 | –44 |
| Effect on the Group's cash and cash equivalents | –8.0 | –80 |
CONSOLIDATED QUARTERLY DATA
| 2021 | 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
| Sales volume, ktonnes | 112.3 | 118.5 | 131.4 | 126.7 | 103.3 | 86.7 | 70.8 | 89.9 | |
| Income statement | |||||||||
| Net sales | 4,857 | 4,621 | 4,609 | 4,043 | 3,149 | 2,575 | 2,221 | 3,063 | |
| Adjusted EBITDA1 | 299 | 420 | 468 | 499 | 342 | 332 | 182 | 345 | |
| Adjusted operating profit1 | 139 | 219 | 309 | 342 | 193 | 203 | 42 | 210 | |
| Operating profit | –21 | 219 | 309 | 326 | 167 | 177 | 37 | 204 | |
| Profit for the period | –23 | 153 | 226 | 239 | 106 | 124 | 1 | 133 | |
| Adjusted EBITDA margin, % | 6.2 | 9.1 | 10.2 | 12.3 | 10.9 | 12.9 | 8.2 | 11.3 | |
| Adjusted operating margin, % | 2.9 | 4.7 | 6.7 | 8.5 | 6.1 | 7.9 | 1.9 | 6.9 | |
| Adjusted operating profit per tonne, kSEK | 1.2 | 1.8 | 2.4 | 2.7 | 1.9 | 2.3 | 0.6 | 2.3 | |
| Operating margin, % | –0.4 | 4.7 | 6.7 | 8.1 | 5.3 | 6.9 | 1.7 | 6.6 | |
| Net margin, % | –0.5 | 3.3 | 4.9 | 5.9 | 3.4 | 4.8 | 0.0 | 4.3 | |
| Balance sheet | |||||||||
| Non-current assets | 8,323 | 8,099 | 8,003 | 8,062 | 7,633 | 5,825 | 6,047 | 6,491 | |
| Current assets | 7,444 | 7,399 | 6,810 | 6,009 | 6,020 | 4,330 | 4,156 | 5,121 | |
| Equity | 6,932 | 6,745 | 6,546 | 6,424 | 5,970 | 4,442 | 4,374 | 4,663 | |
| Non-current liabilities | 3,297 | 3,425 | 2,761 | 2,780 | 3,068 | 2,905 | 3,719 | 3,910 | |
| Current liabilities | 5,539 | 5,327 | 5,505 | 4,867 | 4,614 | 2,808 | 2,109 | 3,038 | |
| Cash flow | |||||||||
| Operating activities | 630 | –34 | 395 | –3 | 318 | 426 | 283 | 387 | |
| Investing activities | –338 | –186 | –156 | –247 | –1,335 | –78 | –117 | –207 | |
| Before financing activities | 292 | –220 | 239 | –250 | –1,017 | 348 | 166 | 181 | |
| Financing activities | –580 | 263 | 169 | –646 | 1,628 | –391 | –312 | 225 | |
| Cash flow for the period | –288 | 43 | 409 | –896 | 611 | –43 | –146 | 406 | |
| Capital structure | |||||||||
| Net debt | 3,643 | 3,810 | 3,532 | 3,690 | 3,292 | 2,812 | 3,247 | 3,559 | |
| Equity to assets, % | 44.0 | 43.5 | 44.2 | 45.7 | 43.7 | 43.7 | 42.9 | 40.2 | |
| Data per share, SEK2 | |||||||||
| Earnings per share basic | –0.21 | 1.44 | 2.12 | 2.25 | 1.19 | 1.45 | 0.01 | 1.56 | |
| Earnings per share diluted | –0.21 | 1.44 | 2.12 | 2.24 | 1.19 | 1.45 | 0.01 | 1.56 | |
| Equity | 65.09 | 63.26 | 61.40 | 60.25 | 66.49 | 52.15 | 51.36 | 54.75 | |
| Cash flow from operating activities | 5.91 | –0.32 | 3.71 | –0.03 | 3.54 | 5.00 | 3.32 | 4.55 | |
| Share price at the end of the period | 106.10 | 105.50 | 118.90 | 113.50 | 100.20 | 71.06 | 65.39 | 43.62 | |
| Weighted outstanding ordinary shares, basic in thousands |
106,308.6 | 106,308.6 | 106,308.6 | 106,308.6 | 89,742.0 | 85,177.3 | 85,177.3 | 85,177.3 | |
| Weighted outstanding ordinary shares, | |||||||||
| diluted in thousands | 106,498.1 | 106,615.3 | 106,623.1 | 106,620.7 | 89,789.3 | 85,177.3 | 85,177.3 | 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
| 2021 | 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||
| Sales volume by region, ktonnes | |||||||||
| Asia Pacific | 19.6 | 17.5 | 21.4 | 23.2 | 20.9 | 16.8 | 15.1 | 16.7 | |
| Europe | 34.1 | 34.7 | 37.7 | 37.1 | 25.7 | 10.3 | 8.6 | 13.7 | |
| North and South America | 58.6 | 66.3 | 72.3 | 66.5 | 56.7 | 59.6 | 47.1 | 59.5 | |
| Total | 112.3 | 118.5 | 131.4 | 126.7 | 103.3 | 86.7 | 70.8 | 89.9 | |
| Sales volume by end-customer, ktonnes | |||||||||
| Automotive | 42.7 | 44.3 | 51.4 | 55.3 | 46.8 | 35.3 | 25.2 | 38.7 | |
| HVAC | 22.1 | 27.1 | 30.4 | 26.1 | 19.4 | 22.4 | 20.2 | 24.3 | |
| Speciality packaging | 21.0 | 22.7 | 22.8 | 19.1 | 18.2 | 18.1 | 13.7 | 14.4 | |
| Other niches | 26.5 | 24.4 | 26.8 | 26.2 | 18.8 | 10.9 | 11.6 | 12.5 | |
| Total | 112.3 | 118.5 | 131.4 | 126.7 | 103.3 | 86.7 | 70.8 | 89.9 | |
| Net sales by region, SEK million | |||||||||
| Asia Pacific | 907 | 697 | 801 | 781 | 669 | 526 | 486 | 587 | |
| Europe | 1,389 | 1,259 | 1,274 | 1,145 | 778 | 331 | 310 | 473 | |
| North and South America | 2,561 | 2,664 | 2,534 | 2,117 | 1,702 | 1,717 | 1,425 | 2,004 | |
| Total | 4,857 | 4,621 | 4,609 | 4,043 | 3,149 | 2,575 | 2,221 | 3,063 | |
| Employees | |||||||||
| Average number of employees | 2,682 | 2,664 | 2,645 | 2,602 | 2,297 | 1,629 | 1,489 | 1,751 |
| End market | Automotive | HVAC Speciality packaging |
Other niches | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ktonnes | Q4 2021 | Q4 2020 | Q4 2021 | Q4 2020 | Q4 2021 | Q4 2020 | Q4 2021 | Q4 2020 | Q4 2021 | Q4 2020 |
| Asia Pacific | 16.0 | 18.3 | 0.6 | 0.6 | – | – | 3.0 | 1.9 | 19.6 | 20.9 |
| Europe | 15.3 | 15.2 | 0.1 | 0.1 | 4.7 | 3.3 | 14.0 | 7.1 | 34.1 | 25.7 |
| North and South America | 11.4 | 13.3 | 21.4 | 18.7 | 16.3 | 14.9 | 9.5 | 9.7 | 58.6 | 56.7 |
| Total | 42.7 | 46.8 | 22.1 | 19.4 | 21.0 | 18.2 | 26.5 | 18.8 | 112.3 | 103.3 |
CONSOLIDATED 12-MONTHS ROLLING DATA
| SEK million | Jan 2021 – Dec 2021 |
Oct 2020 – Sep 2021 |
Jul 2020 – Jun 2021 |
Apr 2020 – Mar 2021 |
Jan 2020 – Dec 2020 |
Oct 2019 – Sep 2020 |
Jul 2019– Jun 2020 |
Apr 2019 – Mar 2020 |
|---|---|---|---|---|---|---|---|---|
| Sales volume, ktonnes | 488.9 | 479.9 | 448.1 | 387.5 | 350.6 | 325.2 | 324.3 | 346.4 |
| Income statement | ||||||||
| Net sales | 18,130 | 16,421 | 14,375 | 11,987 | 11,008 | 10,541 | 10,964 | 11,932 |
| Adjusted EBITDA1 | 1,686 | 1,729 | 1,641 | 1,355 | 1,201 | 1,129 | 1,101 | 1,289 |
| Adjusted operating profit1 | 1,008 | 1,063 | 1,048 | 780 | 648 | 599 | 586 | 801 |
| Operating profit | 833 | 1,020 | 979 | 707 | 584 | 532 | 545 | 765 |
| Adjusted EBITDA margin, % | 9.3 | 10.5 | 11.4 | 11.3 | 10.9 | 10.7 | 10.0 | 10.8 |
| Adjusted operating margin, % | 5.6 | 6.5 | 7.3 | 6.5 | 5.9 | 5.7 | 5.3 | 6.7 |
| Adjusted operating profit per tonne, kSEK | 2.1 | 2.2 | 2.3 | 2.0 | 1.8 | 1.8 | 1.8 | 2.3 |
| Operating margin, % | 4.6 | 6.2 | 6.8 | 5.9 | 5.3 | 5.0 | 5.0 | 6.4 |
| Capital structure and return indicators | ||||||||
| Capital employed | 10,117 | 9,453 | 8,866 | 8,495 | 8,028 | 7,773 | 7,849 | 7,782 |
| Return on capital employed, % | 10.0 | 11.2 | 11.8 | 9.2 | 8.1 | 7.7 | 7.5 | 10.3 |
| Equity | 6,521 | 6,024 | 5,550 | 5,174 | 4,752 | 4,435 | 4,362 | 4,333 |
1 Adjusted for items affecting comparability, see Note 5 for further information.
2 Includes adjusted EBITDA for acquisitions as a part of Gränges Group for 12 months, see alternative performance measures for further information.
Return on equity, % 9.1 12.0 12.5 9.1 7.6 6.9 8.7 12.7 Net debt / Adjusted EBITDA2 2.2 2.2 2.0 2.4 2.2 2.5 2.9 2.8
FINANCIALS PER BUSINESS AREA
| Oct–Dec 2021 | Oct–Dec 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK million | Gränges Eurasia |
Gränges Americas |
Other and eliminations |
Total | Gränges Eurasia |
Gränges Americas |
Other and eliminations |
Total | |
| Sales volume external, ktonnes | 55.4 | 56.9 | – | 112.3 | 48.3 | 54.9 | – | 103.3 | |
| Sales volume internal, ktonnes | 3.6 | – | –3.6 | 0 | 7.1 | – | –7.1 | 0 | |
| Total sales volume | 59.0 | 56.9 | –3.6 | 112.3 | 55.4 | 54.9 | –7.1 | 103.3 | |
| Income statement | |||||||||
| Net sales, external | 2,362 | 2,498 | –2 | 4,857 | 1,488 | 1,652 | 9 | 3,149 | |
| Net sales, internal | 164 | –13 | –151 | 0 | 231 | –3 | –229 | 0 | |
| Total net sales | 2,526 | 2,485 | –153 | 4,857 | 1,720 | 1,650 | –220 | 3,149 | |
| Adjusted operating profit1 | 47 | 73 | 18 | 139 | 110 | 108 | –24 | 193 | |
| Operating profit | –102 | 109 | –28 | –21 | 80 | 103 | –16 | 167 | |
| Adjusted operating margin, % | 1.9 | 2.9 | n/a | 2.9 | 6.4 | 6.5 | n/a | 6.1 | |
| Adjusted operating profit per tonne, kSEK | 0.8 | 1.3 | n/a | 1.2 | 2.0 | 2.0 | n/a | 1.9 | |
| Capital structure and return indicators | |||||||||
| Capital employed2 | 6,815 | 4,076 | –316 | 10,574 | 5,911 | 3,555 | –203 | 9,262 | |
| Return on capital employed, %3 | 6.8 | 16.9 | n/a | 10.0 | 4.6 | 11.8 | n/a | 8.1 |
| Jan–Dec 2021 | Jan–Dec 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK million | Gränges Eurasia |
Gränges Americas |
Other and eliminations |
Total | Gränges Eurasia |
Gränges Americas |
Other and eliminations |
Total | |
| Sales volume external, ktonnes | 236.6 | 252.4 | – | 488.9 | 131.5 | 219.4 | – | 350.6 | |
| Sales volume internal, ktonnes | 26.9 | – | –26.9 | 0 | 22.5 | – | –22.8 | 0 | |
| Total sales volume | 263.5 | 252.4 | –26.9 | 488.9 | 154.0 | 219.4 | –22.8 | 350.6 | |
| Income statement Net sales, external |
8,627 | 9,502 | – | 18,130 | 4,262 | 6,725 | 21 | 11,008 | |
| Net sales, internal | 1,021 | –14 | –1,007 | 0 | 775 | 24 | –799 | 0 | |
| Total net sales | 9,648 | 9,488 | –1,007 | 18,130 | 5,037 | 6,748 | –778 | 11,008 | |
| Adjusted operating profit1 | 446 | 655 | –92 | 1,008 | 176 | 503 | –30 | 648 | |
| Operating profit | 280 | 691 | –138 | 833 | 121 | 498 | –35 | 584 | |
| Adjusted operating margin, % | 4.6 | 6.9 | n/a | 5.6 | 3.5 | 7.5 | n/a | 5.9 | |
| Adjusted operating profit per tonne, kSEK | 1.7 | 2.6 | n/a | 2.1 | 1.1 | 2.3 | n/a | 1.8 |
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 Eurasia | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||||||||
| SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||
| Sales volume external, ktonnes | 55.4 | 54.8 | 62.4 | 64.0 | 48.3 | 27.7 | 24.1 | 31.4 | ||||
| Sales volume internal, ktonnes | 3.6 | 6.1 | 8.0 | 9.2 | 7.1 | 4.1 | 3.9 | 7.3 | ||||
| Total sales volume, ktonnes | 59.0 | 60.9 | 70.4 | 73.2 | 55.4 | 31.8 | 28.0 | 38.8 | ||||
| Income statement | ||||||||||||
| Net sales, external | 2,362 | 2,054 | 2,184 | 2,028 | 1,488 | 882 | 806 | 1,085 | ||||
| Net sales, internal | 164 | 248 | 298 | 311 | 231 | 137 | 137 | 270 | ||||
| Total net sales | 2,526 | 2,301 | 2,482 | 2,339 | 1,720 | 1,019 | 943 | 1,355 | ||||
| Adjusted operating profit1 | 47 | 69 | 136 | 193 | 110 | 17 | –25 | 74 | ||||
| Operating profit | –102 | 69 | 136 | 177 | 80 | –8 | –25 | 74 | ||||
| Adjusted operating margin, % | 1.9 | 3.0 | 5.5 | 8.3 | 6.4 | 1.6 | –2.6 | 5.4 | ||||
| Adjusted operating profit per tonne, kSEK |
0.8 | 1.1 | 1.9 | 2.6 | 2.0 | 0.5 | –0.9 | 1.9 | ||||
| Capital structure and return indicators | ||||||||||||
| Capital employed2 | 6,815 | 6,840 | 6,647 | 6,483 | 5,911 | 3,237 | 3,179 | 3,338 | ||||
| Return on capital employed, %3 | 6.8 | 8.7 | 9.0 | 6.7 | 4.6 | 4.9 | 7.4 | 12.7 |
| Gränges Americas | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||||||
| SEK million | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||
| Sales volume external, ktonnes | 56.9 | 63.8 | 69.0 | 62.7 | 54.9 | 59.1 | 46.7 | 58.4 | ||
| Sales volume internal, ktonnes | – | – | – | – | – | – | – | – | ||
| Total sales volume, ktonnes | 56.9 | 63.8 | 69.0 | 62.7 | 54.9 | 59.1 | 46.7 | 58.4 | ||
| Income statement | ||||||||||
| Net sales, external | 2,498 | 2,567 | 2,425 | 2,012 | 1,652 | 1,688 | 1,411 | 1,974 | ||
| Net sales, internal | –13 | –5 | 1 | 3 | –3 | 16 | 10 | 1 | ||
| Total net sales | 2,485 | 2,562 | 2,426 | 2,015 | 1,650 | 1,704 | 1,420 | 1,974 | ||
| Adjusted operating profit1 | 73 | 172 | 219 | 191 | 108 | 156 | 89 | 150 | ||
| Operating profit | 109 | 172 | 219 | 191 | 103 | 156 | 89 | 150 | ||
| Adjusted operating margin, % | 2.9 | 6.7 | 9.0 | 9.5 | 6.5 | 9.2 | 6.3 | 7.6 | ||
| Adjusted operating profit per tonne, kSEK |
1.3 | 2.7 | 3.2 | 3.0 | 2.0 | 2.6 | 1.9 | 2.6 | ||
| Capital structure and return indicators | ||||||||||
| Capital employed2 | 4,076 | 4,066 | 3,761 | 3,895 | 3,555 | 3,989 | 4,441 | 4,898 | ||
| Return on capital employed, %3 | 16.9 | 17.9 | 17.2 | 13.1 | 11.8 | 9.8 | 8.1 | 9.3 |
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, 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 25.
| SEK million 2021 2020 2021 2020 Adjusted operating profit –21 167 833 584 Operating profit Items affecting comparability 159 27 175 64 Adjusted operating profit 139 193 1,008 648 Adjusted operating profit per tonne Adjusted operating profit 139 193 1,008 648 Sales volume, ktonnes 112.3 103.3 488.9 350.6 Adjusted operating profit per tonne, kSEK 1.2 1.9 2.1 1.8 Adjusted EBITDA Adjusted operating profit 139 193 1,008 648 Depreciation, amortization and impairment charges 161 148 678 553 Adjusted EBITDA 299 342 1,686 1,201 EBITDA for Aluminium Konin – 276 – 276 Adjusted EBITDA incl. Aluminium Konin as a part of Gränges Group for 12 months 299 618 1,686 1,477 Return on capital employed Total assets less cash and cash equivalents and interest–bearing receivables, rolling 12 months average – – 13,717 10,119 Non-interest-bearing liabilities, rolling 12 months average – – –3,948 –2,468 Pensions, rolling 12 months average – – 348 377 Capital employed – – 10,117 8,028 Adjusted operating profit – – 1,008 648 Return on capital employed, % – – 10.0 8.1 Net debt Cash and cash equivalents and interest–bearing receivables – – –814 –1,601 Interest-bearing liabilities – – 4,109 4,535 Pensions – – 348 358 Net debt – – 3,643 3,292 Equity to assets Equity – – 6,932 5,970 Total assets – – 15,767 13,652 Equity to assets, % – – 44.0 43.7 Adjusted cash flow before financing activities Cash flow before financing activities 292 –1,017 62 –322 Cash flow from expansion investments 159 102 456 306 Cash flow from acquisitions and other capital transactions 12 1,147 90 1,196 Adjusted cash flow before financing activities 463 232 607 1,180 Cash conversion 463 232 607 1,180 Adjusted cash flow before financing activities Adjusted operating profit 139 193 1,008 648 Cash conversion, % 334 120 60 182 |
Q4 | Jan–Dec | |
|---|---|---|---|
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.
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.
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.
Earnings per share Profit for the period divided by the total number of shares.
Equity to Assets Equity divided by total assets.
Items affecting comparability Non-recurring income and expenses.
ktonnes
Volume expressed in thousands of metric tonnes.
Net debt
Cash and cash equivalents and interest-bearing receivables minus interest-bearing liabilities, including pensions.
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.
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.
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 total annual production capacity amounts to 560 ktonnes. Gränges has 2,600 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 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 a clear strategy for growth targeting four areas: Thermal management, Electrified transportation, New rolled products niches and New materials technology. The implementation of the strategy is supported by a focus on sustainability, innovation, digitalization and continuous improvement. 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.