- Sales volume increased by 85.7 per cent to 131.4 ktonnes (70.8) and net sales to SEK 4,609 million (2,221). Excluding acquisitions sales volume increased by 51.3 per cent to 107.1 ktonnes and net sales was SEK 3,876 million.
- Adjusted operating profit increased to SEK 309 million (42) and adjusted operating profit per tonne was 2.4 kSEK (0.6). Excluding acquisitions, adjusted operating profit increased to SEK 261 million.
- Profit for the period increased to SEK 226 million (1) and includes no items affecting comparability (–5).
- Diluted earnings per share increased to SEK 2.12 (0.01).
- Cash flow before financing activities adjusted for expansion investments and acquisitions was SEK 334 million (238).
- Net debt decreased to SEK 3,532 million at 30 June 2021 (SEK 3,690 million at 31 March 2021), corresponding to 2.0 times adjusted EBITDA[1,2] (2.4 times at 31 March 2021).
First half-year 2021
- Sales volume increased by 60.7 per cent to 258.1 ktonnes (160.7) and net sales to SEK 8,651 million (5,284). Excluding acquisitions sales volume increased by 30.6 per cent to 209.9 ktonnes and net sales was SEK 7,240 million.
- Adjusted operating profit increased to SEK 651 million (252) and adjusted operating profit per tonne was 2.5 kSEK (1.6). Excluding acquisitions, adjusted operating profit increased to SEK 554 million.
- Profit for the period increased to SEK 465 million (133) and includes items affecting comparability of SEK –16 million (–11).
- Diluted earnings per share increased to SEK 4.36 (1.56).
- Cash flow before financing activities adjusted for expansion investments and acquisitions was SEK 279 million (568).
 Includes adjusted EBITDA for acquisitions as a part of Gränges Group for 12 months, see alternative performance measures page 24 for further information.
 Adjusted for items affecting comparability, see Note 5 for further information.
Comments by Gränges’ CEO Johan Menckel:
Strong cash generation and important steps taken for continued profitable growth
Continued strong market demand
The strong market demand that we experienced in the first quarter continued in the second quarter of 2021. The sales volume in the second quarter reached 131.4 ktonnes, which is the highest sales volume in an individual quarter so far. This represents a 4 per cent growth over the first quarter 2021 and an 86 per cent growth over the second quarter last year that was heavily impacted by the COVID-19 pandemic. Excluding the acquired sales volume from Gränges Konin, the second quarter sales volume was up 51 per cent compared with the same period last year.
The adjusted operating profit increased to SEK 309 million largely driven by the higher sales volume supported by continued good productivity which mitigated the increased inflationary pressure experienced for certain cost items. Gränges Konin contributed to the operating profit with SEK 48 million while exchange rate fluctuations had a negative impact on adjusted operating profit of SEK 36 million. Further, the adjusted operating profit includes costs of SEK 10 million related to a fire in a rolling mill in Newport and SEK 7 million related to the repayment of COVID-19 linked government grants in Sweden. We continue to manage working capital well and the cash generation was strong in the quarter. The cash flow before financing, adjusted for expansion investments and acquisitions, amounted to SEK 334 million. As a consequence of this, the net debt to EBITDA ratio is at the end of the second quarter back into the target range at 2.0 times.
The market development in the second quarter was particularly strong in the Automotive business, where the recovery of the light vehicle production contributed to a 75 per cent increase in sales volume compared to last year. The semiconductor shortage currently experienced in the automotive industry had a negative impact on the sales with a slowdown towards the end of the quarter. For the HVAC business we continued to see a positive development with a 51 per cent year over year growth while sales of Speciality packaging material increased by 29 per cent in the period.
Milestone reached for Finspång expansion
In the beginning of June, our operations in Finspång completed an important milestone in the ongoing capacity expansion and logistics improvement project by successfully rolling the first coil in the new cold rolling mill. Once the project is completed in the second half of 2022, the site will have a significantly better production flow which will enable both lower production costs and an improved environmental footprint. This investment will add an additional capacity of 20 ktonnes that will be available for continued growth in materials for automotive heat exchangers and other niche applications.
Increased focus on battery applications
Gränges works actively to support the green transition and the electrification of the transportation industry creates additional opportunities for Gränges also outside of the current product portfolio. For instance, rolled aluminium is used to produce both the cathode and the cell casing for Lithium-ion batteries and the demand for these materials is expected to increase significantly over the coming years. With its global footprint of aluminium rolling mills, Gränges has capabilities to serve emerging battery value chains in all geographical regions with high quality aluminium materials for battery applications. To capture the growth in battery market, we have made a decision to invest SEK 100 million over two years to add capabilities for commercial production of initially 10 ktonnes of cathode foil in the production sites in Shanghai and Finspång.
Although the COVID-19 pandemic is still ongoing, the market demand is generally anticipated to remain on a healthy level in the coming quarter. Still, the slowdown in sales to the automotive industry towards the end of the second quarter is expected to continue into the third quarter. As a consequence, Gränges currently expects the sales volume in the third quarter to be lower than in the second quarter by a low to mid-single digit percentage. Increased costs for strategic projects will have a negative impact on profitability when comparing the third quarter to the second quarter.
Looking further ahead, I strongly believe that we will be able to capitalize on the strong global platform we have established for Gränges. With a strong commitment to sustainability, innovation, digitalization, and continuous improvement, Gränges is well positioned to continue to deliver sustainable and profitable growth for the years to come.
From a personal perspective I am very grateful for having been a part of Gränges’ 125 years history and it is with great pride that I now hand over to Jörgen Rosengren who will start as the 20th CEO of Gränges in October this year. Most of all I’m proud of all my colleagues throughout the organization who has done a fantastic job in developing the company to what it is today.
Johan Menckel, CEO
Webcasted telephone conference
CEO Johan Menckel and CFO Oskar Hellström will present Gränges’ half-year report 2021 at a webcasted conference call at 10.00 CEST, Friday 16 July, 2021.
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.