2006 Full-year Results & 2007 Outlook Frank Gad, Chief Executive Officer March-April 2007

2006 Full-year Results & 2007 Outlook

Frank Gad, Chief Executive Officer

March-April 2007

22006 Full-Year & 2007 Outlook – March-April 2007 / SP Group

AGENDA

1. SP Group – an overview

2. 2006 highlights

3. Group financial highlights 2006

4. Business areas – results & outlook

5. Group strategy

6. Financial objectives

7. 2007 outlook Frank Gad (born 1960, M. Sc.)

Career:

Nov. 2004: CEO, SP Group A/S

1999-2004: CEO, FLSmidth A/S

1996-99: President, Mærsk

Container Industri A/S

1985-99: Odense Steel Shipyard A/S,

latest as EVP


SP Group A/S

Injection moulding Polyurethane Vacuum Coating

SP Moulding A/S Tinby A/S

Ergomat A/S

Gibo Plast A/S Accoat A/S

TPI Polytechniek BV

SP Medical A/S

SP GROUP – AN OVERVIEW

• Manufacturer of moulded plastic components and coatings

• Supplier of customer specified solutions for manufacturing industries

• Increasing exports and increasing production in Poland and China

• Strong international niche positions – also within own brands


• Revenue in all 4 business areas exceeded expectations

• 20.1% growth outside Denmark • Higher efficiency and capacity utilisation

throughout the Group

• EBITDA margin at 8.9% (+2.2pp)

• 2 new manufacturing units in Poland; capacity expansion in China

• Sale/close-down of non-strategic assets

• Holstebro and Jyderup closed

• 3 properties sold during H2

• Acquisitions strengthen focus areas• 2006: Mattega AB (60%), Danfoss

Plastics, Ergomat LLC (22.6%) • 2007: 10% of TPI Polytechniek

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10

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60

70

80

2002* 2003* 2004 2005 2006

2006 HIGHLIGHTS

Results before tax & minorities DKKm

Operating profit (EBITDA) DKKm

+48,4%

-60

-50

-40

-30

-20

-10

0

10

20

30

40

2002* 2003* 2004 2005 2006

+99%


-15

-10

-5

0

5

10

15

2003 2004 2005 2006

GROWTH DRIVERS

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140

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180

2003 2004 2005 2006

Sales and marketing focus

Organic growth in %

25

30

35

40

45

2003 2004 2005 2006

International sales focus

Exports in % of total revenue

Medico focus Focus on own brands

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20

40

60

80

100

120

2003 2004 2005 2006

Ventilation concepts Ergonomic solutions

Revenue in DKKm Revenue in DKKm


121,2

462101

148,7

Polyurethane Vacuum formingCoatings Injection moulding

2006 RESULTS EXCEEDED EXPECTATIONS

DKKm 2006 2005 Change %

Revenue 825.4 742.5 +11

EBITDA 73.4 49.5 +48.4

Operating profit (EBIT) 36.0 19.1 +88.5

Profit before tax & minorities

20.7 10.4 +99

Assets in total 670.6 606.6 +10.6

Equity incl. minorities 167.1 134.2 +24.5

Net interest-bearing debt 337.3 327.9 +2.9

Cash flows, operations 37.5 36.6 +2.5

Cash flows, investments -67.5 -16.8 +301.8

Cash flows, financing 38.6 -31.7 n.a.

Revenue split 2006, DKKm

Initial guidance:

4-8% growth; DKK 10-15m profit before tax and minorities


SP Moulding manufactures injection moulded advanced plastic components for a wide range of industries.

SP Medical produces for customers in the medical appliance industry, including finished articles such as medical guide-wires. The production takes place in bacteria- and particle-free clean-rooms.

SP Moulding is the leading Danish manufacturer and among the largest in Scandinavia. SP Medical ranks 3-4 in Scandinavia.

Locations: Juelsminde, Stoholm, Karise, Sønderborg (Denmark), Suzhou (China) and Sieradz (Poland).

INJECTION MOULDING (1)

Technical plastics

Mass Production Medico Medico 2K and 3K moulding


INJECTION MOULDING (2)

2006:

• 15.9% growth; 10.8% organic growth

• Margin improvement due to higher efficiency and capacity utilisation

• Strong performance by SP Medical; integration of Accoat Medical early 2007

• Acquisition of Danfoss Plastics; 35 machines to Denmark and Poland

• Production set-up in Poland established for both SP Medical and SP Moulding

• Earnings affected by expansion outside Denmark and integration efforts

Outlook for 2007:

• Continuing growth; improved earnings

• Declining negative impact from Polish start-ups and integration efforts

DKK mio. 2006 2005

Revenue 462.0 398.6

EBITDA 27.2 18.9

Operating profit (EBIT) 9.0 1.6

Result 0.6 -2.5

Employees (average) 494 463


3 activities: Tinby A/S, Ergomat A/S and TPI Polytechniek BV

Locations: Søndersø (DK), Zdunska Wola (POL), Vught and MK Teuge (NL), Cleveland (US), Montreal (CAN), Zeil am Main (DE), Helsingborg (SE)

Tinby is one of the leading supplier in Northern Europe of moulded products in solid foamed and flexible polyurethane (PUR). Global market leader within hard rollers. Rollers Solid foamed

PUR

TPI Polytechniek produces and sells light-foamed ventilation equipment for industrial buildings and poultry and pig houses. Market leader in the EU.

POLYURETHANE (1)

Ergomat produces and sells ergonomic solutions under own brands: Primarily mats (Ergomat), chairs (ErgoPerfect), tables, and DuraStripe striping tape. Market leader in the EU. Mats DuraStripe


POLYURETHANE (2)

2006: • Overall: 1.5% organic growth • TPI: 17% growth, driven by Eastern

Europe and the Middle East

• Ergomat: Modest growth at 10%

• Tinby: Declining revenue; progresses made in the wind mill industry

• Overall EBIT margin up to 15.7% due to better product mix and elimination of loss-making activity in Poland

• Acquisitions of 60% in Mattega AB and 22.6% in Ergomat LLC

Outlook for 2007:

• Higher revenue overall

• Higher earnings overall

DKK mio. 2006 2005

Revenue 148.7 156.6

EBITDA 30.4 24.7


Result 14.0 10.9



Gibo Plast develops and manufactures thermo-formed plastic products in different materials and colours. The products are mainly used in refrigerators and freezers, caravans as well as within transportation, medical equipment, lighting industries, wind turbines etc.

Market leader in Denmark and Scandinavia, among the 10 biggest suppliers in the EU as regards traditional vacuum forming. Strong position within the new High-pressure and Twinsheet technologies.

Location: Skjern (DK).

Vacuum forming CNC milling High pressure Twinsheet

VACUUM FORMING (1)


VACUUM FORMING (2)

2006:

• Revenue slightly better than expected

• 14% drop in sales to the refrigerator and freezer sector; 2 major customers closed production in Denmark in Q4

• 10% growth in sales to other segments: transportation equipment, the medico industry, big parts for wind turbines

• Stable earnings due to centralization of production in Skjern during 2005

• Sales efforts strengthened significantly; objective of doubling export sales

Outlook for 2007:

• Revenue down due to shortfall of revenue to refrigerator/freezer sector

• Positive earnings, but at a lower level than in 2006

DKK mio. 2006 2005

Revenue 101.0 104.2

EBITDA 8.4 8.7


Result 2.5 3.4



Accoat develops and manufactures high-build corrosion protection, non-stick and low-friction coatings in Teflon, PTFE and other refined materials for a wide range of industries. Accoat engages in coating of both industrial products and production equipment.

Within industrial teflon coating Accoat is among the 5 biggest suppliers in the EU. Manufacturing of medical guidewires and other finished articles has been transferred to SP Medical early 2007.

Location: Kvistgaard (DK).

COATINGS (1)

Coating Coating Medico


COATINGS (2)

2006:

• 55% organic growth with growth accelerating during H2

• Strong revenue growth within chemical and pharmaceutical industries

• Transfer of wage-incentive activities from Denmark to Poland in 2006-07

• Investments in Kvistgaard factory

• Earnings significantly ahead of expectations following stronger focus on core competencies

Outlook for 2007: • Accoat Medical divested to SP Medical • Continuing growth in both revenue and

earnings in the coating activities

DKK mio. 2006 2005

Revenue 121.2 92.0

EBITDA 17.8 7.2


Result 6.5 -0.2



• Win market shares in Northern and Central Europe through increasing exports from Denmark and Poland

• Acquisitions, e.g. consolidation of main markets in Northern Europe

• Intensified marketing and stronger differentiation within processes, design and raw materials

• Intensified innovation and contribution to the customer’s product development; global sourcing of forms and tools

• Stronger engagement in growth industries and new customers

GROUP STRATEGY (1)


• Leverage the potential in the existing niche products

• Ergonomic workplaces and striping equipment

• Ventilation equipment • Guide-wires • Rollers

• Globalize products under own brands, i.e. Ergomat, DuraStripe, TPI etc.

• New niche products with control of trademarks and distribution

• Focus on medico through strengthening of competencies

STRATEGY (2)

Increasing investments in DKKm

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80

2002* 2003* 2004 2005 2006

Investments in property, plant and equipment


STRATEGY (3)

• Continuing adjustments and improved efficiency of production

• Automation of processes, LEAN roll out • ”Better, cheaper and faster”

• Expansion in Poland and China • Doubling of capacity in China

• Expansion of new Polish moulding factory and clean room production

• Ongoing transfer of work-intensive activities from Denmark to Poland

• Maximum utilisation of economies of scale, e.g. global sourcing

• Optimisation of supply chain and IT and control systems

• Increased flexibility and better education of the employees

19

667

7

99

6

687 Denmark

Germany

Sweden

Poland

Netherlands

China

North America

Distribution of employees by geography in 2006 (average)


OUTLOOK FOR 2007

• Growth in 3 business areas; Gibo Plast to offset shortfall of revenue

• Group revenue growth of 4-8% = revenue of DKK 860-890m

• Declining negative impact from Polish start-ups and integration costs related to Danfoss Plastics

• Group profit before tax and minorities is estimated at DKK 25-30m vs. DKK 20.6m in 2006

• Outlook is based on current raw material prices and exchange rates

• No changes in the Group’s activities are anticipated

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2002 2003 2004 2005 2006

Equity incl. minority interests DKKm

• Two share issues in 2006 = net proceeds of DKK 23.7m

• Equity ratio incl. minorities up 2.8pp to 24.9%

• Share capital DKK 200m

Stronger financial platform

+24,5%


LONG-TERM FINANCIAL OBJECTIVES

• Profit before tax and minorities = 5% of revenue within 3 years

• Group revenue in the range of DKK 1bn in 2009

• EBITDA margin to exceed 10%

• Lower net interest-bearing debt

• Increased cash flow from operations

• NIBD/EBITDA ratio at 3-4 in 2009 • 11.5 in 2004; 4.5 in 2006

• Equity ratio in the range of 20-35% is considered appropriate

• Competitive return to shareholders from rising share price

90

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170

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42.9% return in 2006

Share price development

Share price (DKK) Total index

Heading for the 5%

-8

-6

-4

-2

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2

4

6

8

2002* 2003* 2004 2005 2006 2007e

Profit before tax and minorities in % of revenue


FORWARD-LOOKING STATEMENTS

This presentation reflects management’s expectations of future events and financial results.

The statements as regards 2007 and the years to come are subject to certain uncertainties and actual results may therefore deviate

materially from the outlook and the financial objectives. Circumstances that could cause changes are among others - but

not exclusively – price changes in raw material and energies, changes in exchange rates, changes in the macro economic and

political conditions, changes in the customer’s demands and production ways and other circumstances on which we do not have

any influence.

This presentation is not a request for buying or selling shares in SP Group A/S.

Additional information:

CEO Frank Gad Phone: (+45) 7023 2379 E-mail: [email protected]

Subscribe to Stock Exchange Announcements at www.sp-group.dk

Documents

2006 Full-year Results & 2007 Outlook Frank Gad, Chief Executive Officer March-April 2007