Gränges is an aluminium technology company who 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.
I’m very proud that we have achieved good progress on our sustainability priorities and that we can now further raise our ambitions. In light of customers’ increased interest in using sustainable materials, I’m proud that we intend to have third-party verified sustainability information available for all our products by 2025. We have recently started to offer customers verified product carbon footprint certificates for products produced at the Finspång site, and the focus will now be to expand such certificates to cover all remaining products
I would like to highlight our new quantitative emission reduction target for sourced metal inputs (scope 3), which shows our holistic strategy to reduce climate impact along the aluminium value chain. It complements our existing climate target for own operations and purchased energy (scope 1+2). As our products’ carbon footprint mainly originates from sourced primary aluminium, we will collaborate with our suppliers to expand sourcing of low-carbon primary aluminium as well as recycled aluminium. I’m also positive that we have upgraded our recycling target to at least 30 per cent, which confirms our focus on circularity and resource efficiency
We are very pleased that we have managed to recruit Jörgen Rosengren. Jörgen has for nine years been CEO in a company which under his leadership has added significant value to the shareholders through profitable organic growth and a number of successful acquisitions. Jörgen’s experience and personal qualities as well as his commercial drive and technical competence make him very suitable to lead Gränges’ continued development.
After an eventful, developing and stimulating time in Bufab, I very much look forward to taking on new challenges and opportunities together with the management at Gränges, from October at the latest. Gränges has great future potential and good opportunities to contribute to the transition to a more sustainable and circular economy.
This investment is the third major US investment we make since 2017. It underscores our commitment to growing our business with our customers and the markets we serve and strengthens our platform for continued profitable growth. It also supports our high sustainability ambitions by improving both energy and carbon intensity. We take pride in being a trusted partner to our customers for continued growth and innovation.
The progress on our sustainability priorities over the last years demonstrates the strength of our structured way of working when integrating sustainability aspects across our operations and value chain. I’m very satisfied that we have intensified the development of a broader and more sustainable offering, as our customers are increasingly recognizing the importance of using sustainable materials. Having verified sustainability information available on a product level enables customers to evaluate the climate impact along their value chain and increase their sustainability performance based on a fact-based approach. We continuously develop sustainable offerings that create tangible business and sustainability benefits and value for our customers.
We have created a new position in Gränges’ Group Management with a global responsibility for sustainability, a very important strategic area for Gränges. By including the SVP Sustainability in Group Management, we broaden management’s competence and focus further to meet the increased interest and demand from our customers and other stakeholders. I am convinced that Sofia will continue to contribute in a very good way to Gränges’ strategic development and long-term competitiveness. I would also like to take the opportunity to thank Camilla for her strong commitment as well as valuable and good efforts and wish her good luck
We are very happy to be able to propose Martina Buchhauser as a new member of the Board of Gränges. With her vast and extensive experience from the global automotive industry, most recently from companies with a focus on electrification, and since, she in addition has been working actively with matters related to sustainability in the supply chain, we are convinced that she will make a strong contribution to Gränges’ continued development and profitable growth.
Achieving this ASI certification is an important milestone in our ambitious sustainability agenda and an important achievement in our work to constantly develop a broader and more sustainable customer offering. The certification verifies that our aluminium products are produced responsibly and sustainably and provides assurance to our customers and other business partners that we are committed to meeting their increased sustainability requirements and demand for sustainable aluminium. This is a first step towards being able to offer ASI certified aluminium.
We constantly develop and broaden our sustainable customer offering and work to create financial and operational value throughout the life-cycle of aluminium. The ASI is a very important industry initiative which enables us to promote and drive responsible and sustainable practices along the aluminium value chain. We now have certifications in place for two of our sites, and we will continue to achieve certification for our other sites.
After 18 years within Gränges, of which the last 8 years as CEO, Johan has chosen to take on another position. Johan is an appreciated leader who has made a powerful contribution to Gränges’ development to a strong position. We want to thank him for his good achievements and look forward to further cooperation until 1 August, and also wish Johan good luck in his new role.
After a long, eventful and very stimulating period, it has been a difficult decision to make, but I am also looking forward to moving on to new challenges in a new position. Gränges is a fantastic company with great future potential. I will continue to lead the organization with a strong commitment until 1 August.
Through this change, we get a well-composed management for Gränges’ operations in Europe with strengthened competence in strategically important areas. We strengthen key competences to broaden our sustainable customer offering and optimize the product mix in the European market with the aim to create a stronger position on growing markets and strengthen our presence in Europe. I am convinced that Torbjörn, Fredrik, Piotr and Jörgen will continue to contribute positively to Gränges’ sustainable profitable growth
The new management in the operations in Europe will have a strong focus on continuing to develop the operations and make use of the overall competence and capacity of the European organization and enable synergies. The knowledge, competence and technically advanced operations in Finspång, Konin and St Avold will further strengthen and broaden our offering to both existing and new customers and markets. By continuing to drive the development of sustainable customer offerings and enabling a successful integration of Gränges’ operations in Europe, we increase our competitiveness
The acquisition is a good strategic fit for Gränges and complements our business and geographic presence. Together we are creating a strong platform for product mix optimization and sustainable profitable growth. Aluminium Konin contributes with technically advanced operations, strategically located in Central Europe, and strengthens Gränges’ product offering for new niche markets and enables a broader offering of solutions for future vehicles. The acquisition will sharpen our competitive strength and create a stronger position in growing markets to further drive the development of sustainable customer offerings
It is positive and valuable to get the seller of Aluminium Konin as shareholder and we look forward to finalize this strategically important acquisition and start to work together with our new colleagues in Poland.
The new business unit Gränges Powder Metallurgy creates a strategically important platform for growth within new materials technology on the fast-growing market for powder materials and additive manufacturing
GETEK and Dispal® adds new capabilities and capacity to expand Gränges’ offering of advanced aluminium materials within current and new customer segments. The acquisition will provide Gränges with capabilities for and give access to the fast-growing market for additive manufacturing powder materials. It is a good strategic fit for Gränges and enhances our platform for sustainable profitable growth.
The collaboration reinforces our climate strategy and focus to collaborate along the value chain to reduce climate impact. Gränges is committed to reducing our climate impact from a life-cycle perspective, and thereby enhancing our sustainability performance. One of the key priorities in our climate strategy is to collaborate along the value chain and increase sourcing and use of recycled aluminium and low-carbon primary aluminium since such materials significantly reduce our products’ carbon footprint.
We see a clear trend that customers are increasingly interested in sustainable and circular materials, and that the demand for sustainability information on material and component level increases. We work proactively with a strong commitment to continually develop our sustainable customer offerings to meet and exceed our customers’ expectations.
Aluminium Konin contributes with technically advanced operations, strategically located in Central Europe. The acquisition is a good strategic fit and complements our business and geographic presence. Together we are creating a strong platform for product mix optimization and sustainable profitable growth. Aluminium Konin strengthens Gränges’ product offering for new niche markets and enables a broader offering of solutions for future vehicles. The acquisition will sharpen our competitive strength and create a stronger position in growing markets to further drive the development of sustainable customer offerings.
With an even stronger position in growing markets and a broader offering of solutions for future vehicles and other applications, Gränges will be able to further drive the development of sustainable customer offerings. With Gränges’ successful track record of acquisitions and ability to minimize environmental impact of its operations, we are confident that Gränges will continue to create long-term profitable growth. Since the listing of the share in 2014, Gränges has more than doubled its sales volume and profit and generated growth above industry average, driven by technically advanced products, innovation, successful acquisitions and a strong sustainability commitment.
Achieving this ASI certification is an important milestone in our sustainability commitment and ambitious sustainability agenda and it is a great recognition for our sustainability efforts. The certification verifies that our aluminium products are produced responsibly and sustainably and it is a first step towards being able to offer certified aluminium products to our customers. It also provides assurance to our customers and other stakeholders that we are committed to meet the increased sustainability requirements. We now intend to achieve certification for our other facilities, to promote responsible production and sourcing practices in the aluminium industry.
How we plan and run our business today has a profound impact on the future. We must continuously challenge ourselves to develop sustainable offerings that create tangible business and sustainability benefits for our customers. Through the light-weighting properties and the recyclability of aluminium, our products promote a circular approach and enable customers and end-users to achieve significant savings in energy consumption and greenhouse gas emissions. The goals also make sense from a business point of view as sustainability measures can increase our financial top and bottom-line. Gränges’ new long-term targets demonstrate our commitment to sustainability and our strong focus on integrating sustainability into everything we do.
Quality is of great importance at our Huntingdon facility as we are expanding capacity and will be serving the automotive industry. This award signals our commitment to the highest standards and ensures our customers can rely on delivery of high-quality products
By streamlining and expanding the facility in Finspång, we create opportunities for a clear improvement of operating results in our European operations. We also take important steps forward in our sustainability efforts by reducing transports and converting from diesel to electric forklifts.
We see very good growth for advanced materials for heat exchangers in Europe in the coming years as more consumers are demanding electric and hybrid cars. The fact that we will have a more efficient facility, with better logistics flows, improves our competitiveness while providing opportunity for growth.
By establishing an MTN program Gränges enters the Swedish bond market. The main purpose of the forthcoming issue is to refinance parts of the existing debt, to diversify the debt structure and to support Gränges long-term strategy.
This is a good opportunity for us to upgrade and use the assets we already own, and address an attractive market niche which has been mainly served through imports. We expect the investment to make a positive contribution to earnings in 2019 and beyond.
This investment builds on our foil strategy as we invest to once again serve our light gauge foil customers and their growth plans. It is great news not only for our future customers, but also for the local community in the Newport area.
Our focus is on continuing to develop Gränges as a leading niche player in the aluminium industry. Since 2014, we have delivered our financial and operational targets, which has created value for our shareholders. An important milestone was the major acquisition we made in the United States in 2016, establishing our own production facilities in the region while at the same time broadening our product portfolio.
We have seen a good start in 2018 with strong customer demand in all markets. In the US, however, we are limited by the fact that we do not have enough capacity to meet the demand of our customers. The ongoing expansion of the plant in Huntingdon is proceeding according to plan and means that we, during the second half of 2019, will be able to increase production by up to 40 ktonnes annually.
We are currently investigating the conditions for resuming production at our facility in Newport, Arkansas, to manufacture light gauge aluminium foil for different types of consumer applications. This would be an ideal opportunity for us to upgrade and use the assets we already own, and at the same time address an attractive niche market that was previously largely supplied via imports.
The electric vehicles market is expected to grow sharply over the next decade. For Gränges, there are new business opportunities in materials for brazed heat exchangers. Our strong position in the market for heat exchangers makes us an excellent partner both for our current customers and for new players entering this growth market.
India is an important, fast-growing market that will have an impact on the global automotive landscape. As the global leader, Gränges has a significant role to play in developing new advanced materials that will allow for reduced environmental impact in the future, and helping the customers to meet the new requirements.
We’re strengthening our organisation in Finspång. Jörgen Abrahamsson, who has solid experience and knowledge about our production operations, will get a permanent role as President Europe, while Fredrik Spens as Deputy President Gränges Europe will focus on strengthening and developing our business.
The primary purpose of the program is to take a first step into the Swedish debt capital market. Commercial papers are a complement to Gränges other funding, and will help optimise the capital structure as Gränges implements its strategy.
The expansion in Huntingdon marks the next step in our strategic growth plan for the North American market. Gränges has built a strong reputation in the aluminium rolling industry, and this expansion allows us to further support our customers’ growth.
The investment represents a long-term commitment to our customers, employees and shareholders as we grow in support of our strategic markets.
The Gränges facility is a vital part of the Carroll County community and I’d like to thank Gränges for committing to create new jobs in Huntingdon and bringing us closer to making TN the No. 1 location in the Southeast for high quality jobs.
The agreement with Mitsubishi Aluminum marks a start for a long-term partnership in North America. We will leverage our strengths and together capture opportunities in the market for advanced aluminium products to mainly the automotive industry, for brazed heat exchangers but also for other products.
We remain focused on growing our presence in automotive heat exchanger materials in North America. We see many synergies with Gränges, most importantly, absolute focus on research and innovation to meet the growing demands of our automotive customers. We are excited and look forward to a long-term partnership with Gränges.
Through the investment, we secure competence and the supply chain within advanced spray-forming technology, well suited for the next generation of materials for heat exchangers. We expect to see very good opportunities for continued development of our customer offering built on this technology.
In short, the year has begun well for us. Sales volumes increased 5.7% in the first quarter, driven by continued robust performance primarily in Europe and the Americas. This compares to growth of just 1% for the period in our underlying markets, according to IHS forecasts. Adjusted operating profit was SEK 155 million, which is in line with the first quarter previous year. Higher volumes and positive currency effects have offset lower conversion prices, a change in geographical mix in terms of production costs, as well as the price lag on aluminium premiums.
We have a unique position in our industry. Through innovation and expansion, we believe that we will grow faster than the market in the coming years. Indeed, our goal is to be the market leader in all geographical regions by 2020, with growth driving strong and sustainable profitability.
India will continue to be one of our most important growth markets for a foreseeable future. Light Weight Heat Exchangers that increase fuel economy and contribute to lower greenhouse gas emissions are central areas when looking forward. As a market leader, Gränges have an important role when it comes to developing new, advanced materials that allows for reduced environmental impact.
We continued to improve profits during the third quarter, despite lower sales volume compared with previous year. In Europe and North America demand continued to be good while the weaker automotive market in China resulted in a negative development in Asia as a whole. Adjusted operating profit improved by 6.2 percent to SEK 112 million, corresponding to a margin of 8.8 percent. Favourable exchange rates continued to make a positive contribution to profits while the downturn in the aluminium premium meant an unfavourable price lag between the premiums we pay and the premiums we receive.
We must become sharper. We have a growth strategy and to be able to grow the business in a global market, we must ensure that we are competitive in all areas.
Our business control will now be clearer and we can take greater advantage of our internal competencies. Through increased focus on customer-related technical development, we strengthen our customer offering, while our strategic research will be a priority area. We will be better adapted to our market and our customers.
I am pleased to present another strong quarter for Gränges. During the second quarter of 2015 adjusted operating profit rose by 21% to SEK 158 million compared to the same quarter last year. This is our best quarterly result so far. Favorable foreign exchange rates continue to affect us positively.
