Year-end report January-December 2016

02 Feb 2017 | GROUP RELEASE, Regulatory - MAR

Solid performance in fourth quarter concluded a record year

Fourth quarter 2016

  • Sales volume increased to 84.7 ktonnes (38.9) and net sales was SEK 2,546 million (1,252). Excluding the acquired business in US, sales volume increased by 12.3%.Adjusted operating profit increased by 47.6% to SEK 171 million (116), corresponding to an adjusted operating margin of 6.7% (9.2). Excluding the acquired business, adjusted operating profit rose 15.2% to SEK 133 million.
  • Operating profit amounted to SEK 162 million (128), including items affecting comparability of SEK –9 million related to the US acquisition.
  • Profit for the period increased to SEK 101 million (83).
  • Diluted earnings per share rose to SEK 1.35 (1.11).
  • Cash flow before financing activities decreased to SEK 104 million (159).

January-September 2016

  • The acquisition of Noranda’s rolled aluminium business   in the US has been consolidated into Gränges’ accounts as of 22 August 2016.
  • Sales volume increased to 239.1 ktonnes (163.9) and net sales was SEK 7,207 million (5,494). Excluding the acquired business, sales volume increased by 7.6%.
  • Adjusted operating profit increased by 27.0% to SEK 687 million (541), corresponding to an adjusted operating margin of 9.5% (9.8). Excluding the acquired business, adjusted operating profit rose 10.9% to SEK 600 million.
  • Operating profit amounted to SEK 559 million (538).
  • Profit for the period rose to SEK 498 million (379).
  • Diluted earnings per share increased to SEK 6.64 (5.07).
  • At 31 December 2016, the equity to assets ratio amounted to 37.0% (56.8%) and net debt corresponded to 2.1 (0.4) times adjusted EBITDA.
  • The Board of Directors proposes a dividend of 2.40 SEK per share (2.00), corresponding to 36% (39%) of profit for the year.

Comments from CEO Johan Menckel:

The fourth quarter was another strong quarter for Gränges, and overall 2016 was a new record year for the company. Sales volume increased 118% in the fourth quarter. Excluding the acquisition, sales volume increased 12%, driven by continued strong demand for heat exchanger materials in Asia and the Americas. Adjusted operating profit increased to SEK 171 million (116) in the fourth quarter. Excluding the acquisition, adjusted operating profit rose to SEK 133 million.

Increased sales volume in Americas and Asia

During the fourth quarter, we continued to experience strong demand growth in Asia, on the back of a positive trend for light vehicles in China. The tax incentive on smaller vehicles, which is being phased out from 2017, has continued to have a positive effect. Further, stricter regulations on maximum loads have contributed to an increase in demand for new commercial vehicles in China. In all, sales volume increased 18% in Asia in the fourth quarter. In Europe, sales of heat exchanger materials were somewhat weaker in the fourth quarter compared to the same period previous year. This is primarily due to strong sales to some of our larger customers during the fourth quarter previous year. In the Americas, demand remained strong. For the recently acquired business in the US, sales volume increased 8% in the fourth quarter. Demand for stationary heat exchanger material remained high during the final months of the year, which seasonally tend to be the weakest of the year.

Delivered on financial targets

Looking at the overall picture for 2016, we have delivered on our targets. We successfully completed a major acquisition in the US, gaining the platform in the region we have sought for. Meanwhile, we are increasing sales volume and generating improved profitability elsewhere in the Group. We ended the year with solid financials. The return on capital employed was 17.5% in 2016, well within target range. We have a robus long-term funding and net debt is down to 2.1 times EBITDA. In view of this, our Board of Directors proposes a dividend of SEK 2.40 per share, which represents an increase of 20% over previous year.


The market for automotive heat exchanger material is expected to continue to grow in 2017. According to IHS, global production of light vehicles is projected to grow by 1% for the full year 2017, of which an increase of 3% is expected in the first quarter. 

Gränges expects above market growth in Asia and Americas in the first quarter. In Europe, sales of heat exchanger materials are expected to grow in line with the market, while sales of non-heat exchanger materials are forecast to be lower. Overall, growth is expected to be above market rate in the first quarter.

For the recently acquired business in the US, sales volumes are expected to remain unchanged in the first quarter compared to first quarter last year. 

We will continue to work according to our strategic plan in 2017. This entails increased focus on our customer offering, innovation and sustainability, and to ensure that we have the capacity and capability in our plants to meet customer demand. This is work that supports our customers, employees and shareholders. We are optimistic about 2017, and are determined to continue to grow with sustainable profitability in the years ahead.

Johan Menckel, CEO Gränges

Webcasted conference call

Investors, analysts and media are invited to a webcasted conference call on Thursday 2 February, 2017, at 10.00 CET. CEO Johan Menckel and CFO Oskar Hellström will present the report.

The webcast will be available on . To participate in the conference call, please call +46 856642661 (Sweden), +44 2031940544 (United Kingdom) or +1 8552692604 (USA). Call a few minutes before the conference call begins. 

A presentation will be available on the Company’s web site before the webcast begins.

For additional information, please contact:

Pernilla Grennfelt, SVP Communications and Investor Relations
Telephone +46 (0) 702 90 99 55

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 2 February 2017 at 07.30 CET.

About Gränges

Gränges is a leading global supplier of rolled aluminium products for heat exchanger applications and other niche markets. In materials for brazed heat exchangers Gränges is the global leader with a market share of approximately 20%. The company develops, produces and markets advanced materials that enhance efficiency in the customer manufacturing process and the performance of the final products; brazed heat exchangers. The company’s geographical markets are Europe, Asia and the Americas. Its production facilities are located in Sweden, China and the United States, and have a combined annual capacity of 400,000 metric tonnes. Gränges has some 1,500 employees and net sales of more than SEK 10 billion. The share is listed on Nasdaq Stockholm. More information on Gränges is available at