Gränges’ year-end report January–December 2020

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Strong fourth quarter concluded a challenging yet productive year

Fourth quarter 2020

  • The acquisition of Aluminium Konin has been completed and is consolidated from November.
  • Sales volume increased by 32.6 per cent to 103.3 ktonnes (77.9). Net sales increased to SEK 3,149 million (2,682). Excluding acquisitions sales volume increased by 13.9 per cent and net sales was SEK 2,761 million.
  • Adjusted operating profit increased to SEK 193 million (144) and adjusted operating profit per tonne was 1.9 kSEK (1.9). Excluding acquisitions, adjusted operating profit increased to SEK 177 million.
  • Profit for the period increased to SEK 106 million (47) and includes items affecting comparability of SEK –27 million (–30).
  • Basic and diluted earnings per share increased to SEK 1.19 (0.56).1)
  • Adjusted cash flow before financing activities was SEK 232 million (191).
  • A rights issue has been completed and proceeds of SEK 1,701 million before transaction costs was received.

January–December 2020

  • Sales volume increased by 0.9 per cent to 350.6 ktonnes (347.3). Net sales decreased to SEK 11,008 million (11,978). Excluding acquisitions sales volume decreased by 3.2 per cent and net sales was SEK 10,620 million.
  • Adjusted operating profit was SEK 648 million (866) and adjusted operating profit per tonne was 1.8 kSEK (2.5). Excluding acquisitions, adjusted operating profit was SEK 632 million.
  • Profit for the period amounted to SEK 363 million (600) and includes items affecting comparability of SEK –64 million (–30).
  • Basic and diluted earnings per share amounted to SEK 4.21 (7.05).1)
  • Adjusted cash flow before financing activities was SEK 1,180 million (1,048), representing a cash conversion of 182 per cent.
  • Net debt decreased to SEK 3,292 million at 31 December 2020 (SEK 3,465 million at 31 December 2019), corresponding to 2.2 times adjusted EBITDA2)3) (2.6 times at 31 December 2019).
  • The Board of Directors proposes a dividend of SEK 1.10 (–) per share, corresponding to 32 per cent (–) of the profit for the year.

1) Weighted outstanding ordinary shares have been adjusted to reflect dilution effect from rights issue in December 2020.
2) Includes adjusted EBITDA for acquisitions as a part of Gränges Group for 12 months, see Note 7 for further information.
3) Adjusted for items affecting comparability, see Note 5 for further information.

Comments by Gränges’ CEO Johan Menckel:

The acquisition of Aluminium Konin and the rights issue create a solid foundation for growth

Improved market conditions
We experienced a continued market recovery in the fourth quarter of 2020. The sales volume in the fourth quarter exceeded 100 ktonnes for the first time in an individual quarter and reached 103.3 ktonnes, which represents a 33 per cent growth over the same period last year. Excluding the acquired sales volume from Aluminium Konin, the fourth quarter sales volume was up 14 per cent compared with the same period last year and 2 per cent compared to the sales volume in the third quarter. The adjusted operating profit increased to SEK 193 million largely driven by the higher sales volume. Aluminium Konin contributed to the operating profit with SEK 17 million while exchange rate fluctuations had a negative impact on adjusted operating profit of SEK 11 million. The cash generation continued to be strong in the fourth quarter and the cash flow before financing, adjusted for expansion investments and acquisitions, amounted to SEK 232 million.

Market conditions in the fourth quarter were particularly strong for the HVAC business, where the unusually long and warm season together with a market share increase contributed to a 24 per cent increase in sales volume compared to last year. For the automotive business we continued to experience a recovery in the fourth quarter recording a sales volume growth of 4 per cent over prior year and 16 per cent over the third quarter, excluding acquired growth from Aluminium Konin. The signs of recovery were strongest in Americas, where sales to automotive customers increased by 8 per cent over prior year, followed by Europe and Asia with a growth of 5 and 2 per cent respectively. Sales in Americas and Europe was positively impacted by restocking at customer level.

Aluminium Konin acquisition completed
In the beginning of November we completed the acquisition of Aluminium Konin, now renamed Gränges Konin. The acquisition strengthens our product offering and presence in Europe and contributes with strong positions in new attractive niche markets. Gränges Konin also adds new capabilities and capacity to expand the offering for future transportation solutions, such as electric vehicles. Following the completion of the acquisition we have worked closely with our new colleagues in Poland to integrate Konin into Gränges and I am very pleased with the development I have seen so far. Subsequent to the Konin acquisition we undertook a new share issue of SEK 1.7 billion, with preferential rights for existing shareholders, to finance the acquisition and future growth investments in line with our strategy. The interest to participate in the rights issue was very high and resulted in an over subscription of approximately 51 per cent. It is very positive for Gränges with this strong support from both current and new shareholders.

Full year 2020
Despite challenging market conditions following the COVID-19 pandemic, 2020 has been a productive year in many ways with a continued focus on expansion and growth as well as cost reductions and efficiency improvements in all regions. During the year we have completed the acquisition of Gränges Konin and entered into the market for aluminium powder for additive manufacturing through the establishment of Gränges Powder Metallurgy. In addition, the new production capacity in our Huntingdon plant was successfully ramped up during the year. We also continued to execute on Gränges’ ambitious sustainability framework and targets and I’m very satisfied to see continued good progress on many of our sustainability priorities for 2020. This demonstrates the strength of our structured way of working when integrating sustainability aspects across our operations and value chain. For the full year 2020, sales volume including acquisitions increased by 1 per cent to 351 ktonnes and the adjusted operating profit decreased to SEK 648 million.

On the positive side, cash generation was very strong in the year with a cash conversion of 182 per cent and adjusted cash flow before financing of SEK 1,180 million. The strong cash flow contributed to that the rights issue to finance the acquisition of Aluminium Konin could be reduced in size compared with what was originally communicated. We ended the year with a net debt equivalent to 2.2 times EBITDA.

In view of the financial results, and our outlook into account, the Board of Directors proposes that the dividend for 2020 will be 1.10 SEK per share.

Strategy 2025
During 2020 we have further developed our strategy and identified four focus areas for growth. Gränges’ competence, capabilities, and global footprint serve as a good foundation to capture growth opportunities, organically as well as by acquisitions, within Thermal management, Electrified transportation, New rolled products niches and New materials technology. The realization of the updated growth strategy is supported by an increased focus on Sustainability, Innovation, Digitalization and Continuous improvement. An increased focus on these business drivers, together with our strong company culture and committed employees, will further strengthen Gränges’ profitability and competitiveness and ensure realization of the updated strategy.

Although the COVID-19 pandemic continues to impact several of Gränges’ end-markets, the recovery is currently expected to continue going into 2021. For the first quarter 2021 the research firm IHS currently assumes that the global light vehicle production will increase by 17 per cent year over year. For the first quarter 2021, Gränges currently expects an organic increase in sales volume, excluding Gränges Konin, by low-double digits compared with last year. This includes a low-double digit growth for the Automotive and a mid-single digit growth for the HVAC and Other business. Gränges Konin is operating at close to full capacity and is under current market conditions expected to contribute with a sales volume of about 24 ktonnes in the first quarter. The development of foreign exchange rates is expected to have a negative impact on profitability in the first quarter. 

Leaving 2020 behind and looking further ahead, I conclude that we in the last few years have established a strong platform through organic growth, expansion investments and acquisitions. With a strong commitment to sustainability, innovation, digitalization and continuous improvement, Gränges is well positioned to deliver sustainable and profitable growth for the coming years.

Johan Menckel, CEO


Webcasted telephone conference
CEO Johan Menckel and CFO Oskar Hellström will present Gränges’ year-end report for January–December 2020 at a webcasted conference call at 10.00 CET, Thursday 28 January, 2021. The webcast is available on 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.

For additional information, please contact:
Johan Dufvenmark, VP Group Treasury & Investor Relations
Telephone: +46 705 97 43 75

The information in this report is such that Gränges must disclose pursuant to the EU Market Abuse Regulation and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the contact person set out above, on Thursday 28 January, 2021 at 07.30 CET.

About Gränges
Gränges is a leading global supplier of rolled aluminium products for heat exchanger applications, speciality packaging and niche markets. In materials for brazed heat exchangers Gränges is the global leader with a market share of approximately 20 per cent. The company develops, produces and markets advanced materials that enhance efficiency in the customers’ manufacturing process and the performance of the final products. The company’s geographical markets are Europe, Asia and the Americas with production facilities in all three regions and a total annual capacity of 560,000 metric tonnes. Gränges has 2,400 employees and net sales of SEK 13.5 billion. The share is listed on Nasdaq Stockholm. More information on Gränges is available at