lindab group presentation Lindab Group Investor Day 14 ... · lindab | group presentation Agenda 12.30-12.45 Trading update David Brodetsky 12.45-13.30 Market outlook –VTT/Euroconstruct

lindab | group presentation

Lindab Group

Investor Day

14 June, 2010


WELCOME


Today’s speakers

3

BA Ventilation

Anders Thulin

BA Building Systems

Venant Krier

BA Building Components

Peter Andsberg

CEO

David Brodetsky

CFO

Nils-Johan Andersson

VTT/Euroconstruct

Pekka Pajakkala


Agenda

12.30-12.45 Trading update David Brodetsky

12.45-13.30 Market outlook –VTT/Euroconstruct Pekka Pajakkala

13.30-14.00 Introduction to the strategy revision David Brodetsky

14.00-14.40 BA Ventilation Anders Thulin

14.40-14.55 Coffee break

14.55-15.35 BA Building Systems Venant Krier

15.35-16.15 BA Building Components Peter Andsberg

16.15-16.30 Financials Nils-Johan Andersson

16.30-17.00 Summary and Q&A David Brodetsky

17.00- Mingel with drinks

4


TRADING UPDATE – Q2


Lindab Group

Seasonally adjusted sales trend by month

6

Building Components and

Building Systems strongly

affected by harsh winter

Clear catch-up effect since

middle of March

Swedish market stands out from

a positive perspective

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

Jan

Feb

Mar

Ap

r

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

2009 2010

Monthly Sales

Seasonally and calendar adjusted

Monthly sales Average sales Q4


BA Ventilation


7

Overall stabilisation in demand

Positive signs in Sweden and

some in France

Slightly down in UK and still

tough conditions in Denmark

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

Jan

Feb

Mar

Apr

Ma

y

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

Ma

y

2009 2010

Monthly Sales




BA Building Systems


8

Several building projects

delayed due to harsh weather

conditions

Some improvement in new

orders since March

Orders in Russia are improving

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

Jan

Fe

b

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

2009 2010

Monthly Sales

Seasonally adjusted





9

Strongly affected by the harsh winter weather, especially in CEE/CIS

Strong catch-up from mid-March

Encouraging signs in the residential market

Continued good development in Sweden while the Danish market remains weak 0

500

1 000

1 500

2 000

2 500

3 000

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

2009 2010

Monthly Sales




Lindab Group

Trading update – Market outlook

10

Sales development supports previous market outlook

Non-Residential (80% of sales)

– Stabilising in most markets

Residential (20% of sales)

– Some improvement, particularly in Sweden

We expect 2010 to remain challenging

– Recovery in Lindab’s main segment non-residential construction is expected in the 2nd half of 2011

– Recovery of the residential segment is expected in 2010


Lindab Group

Steel price development

Increases in steel demand worldwide, especially in Asia and in South America, one

exception being construction in Europe

Raw material cost increases (iron ore, coke etc) in combination with increasing

worldwide demand is pushing steel prices upwards

The general outlook is for heavy price increases in Q3 2010

Lindab will increase prices in Q3 to compensate

11

Source; SBB NE & CRU DE

HDG €/ton

0100

200300400500

600700800

9001000

Jan

09

Feb

09

Mar

09

Ap

r 0

9

May

09

Jun

e 0

9

July

09

Au

g 0

9

Sep

t 0

9

Oct

09

No

v 0

9

Dec

09

Jan

10

Feb

10

Mar

10

Ap

r 1

0

Jun

10

Jul 1

0

Au

g 1

0

Sep

t 1

0


EUROPEAN CONSTRUCTION MARKET


Guest Speaker – Pekka Pajakkala, VTT

13

VTT

State-owned Finnish research organisation with 2,900 employees

The Finnish member organisation of Euroconstruct

Pekka Pajakkala

Vice President for VTT’s business solution Real Estate and

Construction

Regular speaker at Euroconstruct’s conferences and responsible for

the non-residential section at next conference (June 25)

Building market outlook in Europe

Nordic Countries

Western Europe

CEE+CIS

Pekka Pajakkala

14.6.2010

VTT

Finland

Pekka Pajakkala, 14.6.2010 2

CONTENTS OF THE PRESENTATION

Building market outlook in Europe

Nordic, WE, CEE, CIS/RUS

S, FIN, DK, N, GER, UK, P, RUS

1. VTT in brief

2. Economic Outlook

3. Total construction market

4. Residential market

5. Non residential market

6. Summary and conclusions


VTT in brief

Personnel 2.935 (1.1.2010)

Turnover 276 M€ (budget for 2010) of which 1/3 comes from state budget for strategic research

Offices in: Silicon Valley, Brussels, St. Petersburg, Shanghai,

Soeul and Tokyo

Focus areas of research

Applied materials

Bio- and chemical processes

Energy

Information and communication

technologies

Industrial systems management

Microtechnologies and electronics

Services and the built

environment

Business research

Customer sectors Biotechnology, pharmaceutical

and food industries

Electronics

Energy

ICT

Real estate and construction

Machines and vehicles

Services and logistics

Forest industry

Process industry and

environment


International Economy


GNP Growth % Source: IMF 04 2010


Red = strong growth

Blue = weak growth


Data until Q2 2010


-50

-40

-30

-20

-10

0

10

20

30

40

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

Industrial

Service

Consumer

Construction

Confidence Indicators (EU27)

Balances,

May 2010

Source: Eurostat


Consumer

Construction


The European construction market


1,2

2,52,0

3,12,7

0,7

-4,0

0,7

1,62,0

0,9

2,0 1,7

3,7

2,3

-8,4

-2,2

1,6

2,5

-3,0

-10,0

-8,0

-6,0

-4,0

-2,0

0,0

2,0

4,0

6,0

2003 2004 2005 2006 2007 2008 2009* 2010* 2011* 2012*

GDP

Construction

Growth of GDP and Construction in Europe, %

Euroconstruct 11/2009 * forecast


GDP and total building output in Europe



The residential market


0,0

500,0

1 000,0

1 500,0

2 000,0

2 500,0

3 000,0

1 2 3 4 5 6 7

year

Housing starts in Europe

1000 dwellings

Series1

2006 2007 2008 2009 2010 2011 2012

Source: EUROCONSTRUCT Nov. 2009


GDP and New Building Construction output in Europe

Source: Euroconstruct November 2009


Value of Residential building output in Sweden

€ BILL, fixed 2008 prices



The non-residential market



LAG IS 1½ years,

but there is another, longer lag before

vacancy rates fall and building of

new spaces starts

EMPLOYMENT GROWTH IS CRUCIAL FOR NEW NON

RESIDENTIAL


INDUSTRIAL PRODUCTION: Manufacturing industry EUROPE


-3 %

-9 %

-13 %-14 %

-18 %-19 %

5 %

-14 %

-25 %

-20 %

-15 %

-10 %

-5 %

0 %

5 %

10 %

Education

Health Miscellaneous Storage Agricultural Commercial Offices Industrial

New Non-residential Market: 2009%-change compered to previuos year






60

70

80

90

100

110

120

130

2002 2004 2006 2008 2010* 2012*

Commercial

Offices

New Commercial and Office Building in EuropeVolume Index 2002 = 100


60

70

80

90

100

110

120

130

140

150

2002 2004 2006 2008 2010* 2012*

Industrial

Storage

New Industrial and Storage Building in EuropeVolume Index 2002 = 100

90

100

110

120

130

140

150

160

170

2002 2004 2006 2008 2010* 2012*

Buildings for Education

Buildings for Health

New Institutional Building in EuropeVolume Index 2000 = 100


Value of New Non-Residential Construction

50

60

70

80

90

100

110

120

130

140

150

Sweden

Denmark

Germany

United Kingdom

volume index 1991=100



Value of New Non-Residential Construction

50

100

150

200

250

300

350

400

450

Norway

Poland

volume index 1991=100



0

10

20

30

40

50

60

Industrial Agricultural Commercial

+Offices

Education Health care Others

2000 2001 2002 2003 2004

2005 2006 2007 2008

Non-residential Building in Russia including new and reconstructed non-residential buildings in 2008, total 135 mill. cubic meters

million cubic meters

Source: Federal State Statistics Service

Education

7 %

Health

care

4 %

Others

19 %Industrial

26 %

Agricultural

11 %

Commercial 38 %


Summary and conclusions

economy

Economic growth will be slow during next years, typical after financial crisis

high unemployment and slow employment growth

Financial crisis continues as debt crisis (PIIGS-countries)

uncertainty in investment decisions, projects will be postponed

cuttings in public sector spending, low investment possibilities

Interest rates will be on low level for further 1,5…2 years

positive factor for residential building, in some amount also for non-residential

Consumer confidence is on a rather good level

good for building activity as well as services and industries



building construction

Building total

Construction confidence is on low level compared to other industries

Both new residential and new non-residential boomed after 2005 and caused oversupply, unsold dwellings, high vacancy rates and falling capital values and rents

“hangover”, which lasts for many years

Stimulation ends 2010..2011, no money for new, if would be needed

Bottom in 2010, but small growth 2011 (1-1,5 %), some better 2012 (2-3 %)

Residential building

Many categories exist, overheating and price bubble in many countries but reasonable development in others

residential outlook varies country by country, risk for fast rising dwelling prices in some countries

Ahead in cycle compared to non-residential, better outlook until 2012



new non-residential

Bottom will be reached 2011, but growth will be slow for 1-3 years

Commercial and offices

Basic trend is upwards, share of services increase further

Offices boomed more strongly than commercial,

can be seen in vacancies and rents as well as in new projects

Both stay on low level until 2012

Industrial and storages

Basic trend is downward in industry, but upward in storages

Huge free capacity in industry, logistic improvement needs storages

Institutional building, health and educational

Have been contracyclical, but decreasing volumes until 2012 (both)



CEE

CEE countries have small building stock compared to WE and Nordic

Huge need to build more dwellings and non-residential space

huge potential

foreign investors may be skeptic until 2012

CEE members in Euroconstruct are quite optimistic, but

- no experience in how long the overcapacity of spaces will last

- quality of statistical base may vary

- not easy to make forecasts


VTT creates business

from technology


STRATEGY REVISION


Lindab Group

Financial Performance 2001-2009

15

2001 to 2008: Doubling sales and more than tripling EBIT margins

Strong impact of the recession

5 160 5 235 5 302 5 4776 214

7 609

9 2809 840

7 0193,6%4,0% 3,5%

7,0%

9,0%

11,7%

14,1%

11,8%

3,6%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

2 000

4 000

6 000

8 000

10 000

12 000

2001 2002 2003 2004 2005 2006 2007 2008 2009

EBIT Margin

MSEK EBIT Margin (%)


Competition

Some consolidation by the international players but still a fragmented market

with mostly national or regional players

Competition has exited some markets

Customers

Some consolidation among customers, but still very fragmented

Lindab is well placed to serve both local installers and multinationals

Product offering & development

Lindab remains at the forefront in simplifying construction in our segments

Product, such as “Click” innovations, smart tools

Services, such as software tool16

Lindab GroupLast strategic review in 2001 - What has changed since?


Lindab solutions are well placed

1. Lindab Building Systems uses less steel per m² than

traditional steel construction

2. Steel raingutter systems versus plastic

3. Round air duct systems are tighter and more energy

efficient than rectangular

17

Lindab GroupWhat has changed? – Increased environmental awareness

Steel in buildings – well placed from an environmental, quality and

cost perspective


Lindab Group

Lindab 2010 versus 2001 – Geographic presence

18

Sales per region 2008 (2009)/2001

Nordic countries

39% (42) / 57%

Western Europe

28% (32) / 22%

Central and

Eastern Europe

incl CIS

30% (21) / 13%

Other markets

3% (5) / 8%


19

Lindab GroupWhat has changed? Lindab 2010 versus Lindab 2001


Lindab Group

Much has changed - strong fundamentals remain

20

Excellent starting point

• Fantastic brand

• Unique market positions

• Premium products (high quality)

• High service performance

• The team; the talent; the Entrepreneurial spirit


This is how we analysed our businesses

21

Ability to win

Mark

et

att

racti

ve

ness

Low

High

Low High

Drive towards leadership

or reduce focus

Improve portfolio and

business model

structurally and/ or

organically

Manage for cashFocus on the attractive

parts of the portfolioExercise leadership; Optimize

value and manage for cash

Extend and protect leadership

position; Drive to full potential

profit and growth

(Ma

rket gro

wth

, siz

e,

pro

fita

bili

ty,

Com

pe

titive

ness, E

ntr

y b

arr

iers

)


22

Lindab Group

The strategy revision – “Outside in”

Project from November 2009 to April 2010

Approximately 1000 customer interviews conducted

Approximately 50 management interviews conducted

Approximately 50 competitors and expert interviews conducted

Lindab

current

strategy

and facts

Customer

interviews

Competitor

interviews

Resource

analysis

Mgmt plans

and

interviews

Strategic analysis and assessment

Expert

interviews

Market

trends and

research


Lindab Group - Strong sales growth previous cycleCompound organic growth 2001 to 2008 5.4%

23

5 160 5 235 5 302 5 4776 214

7 609

9 2809 840

7 019

0

2 000

4 000

6 000

8 000

10 000

12 000

2001 2002 2003 2004 2005 2006 2007 2008 2009

Strategy has been successful

Ambition to grow at a faster pace

Take account of trends

Take account of our strongholds – what makes Lindab unique

Correct underperforming areas


Business Area Ventilation

24


BA Ventilation

Business area Ventilation is a ventilation specialist providing to an efficient and healthy

environment for property users and owners

Leading supplier of ventilation products

Global leader in round air duct work manufacturing machines

25

Segment –

percentage of salesDivisions –

percentage of sales

Region –

percentage of sales

Non-residential 90% Air Duct Systems 88%

Residential 10%Comfort 12%

Western Europe 43%

Nordic 44%

Other 8%

CEE/CIS 5%

*2005-2009


BA Ventilation

Product groups

26

Machinery/Spiro• World leading supplier of round duct

work machinery, second brand for

pressed fittings, selling to local

manufacturers

• Acts as a door-opener for additional

Lindab Ventilation products

Air & Water• Modularized ceiling diffuser range

• Simple and standardized adaption

• Simplified distribution

• Cooling, heating and ventilation in

one unit with optimized air flow

pattern.

Acoustics• Silencer with aerodynamic shape.

• Energy and space efficient

Air Ducts Comfort

Software• Software to simplify design

and secure end user result

Lindab – Ducts and fittings• Ventilation specialist selling to

installers all material needed for a

ventilation installation

• One stop shopping with optimised

customer service


BA Ventilation

Environmental trend

27

• Kyoto protocol

• EU Energy Performance of Buildings Directive

• National law and building directives

• End customers demand: Environmental friendly buildings

Energy efficient

ventilation

Energy efficient and

healthy buildings


BA Ventilation

European footprint

28

Clear market leader in the

Nordic countries

Strong position in many

Western European

markets

CEE/CIS well established

in main markets

Two major Supply Chain

Centre covers Europe

Major Production facility

Local Production Facility

Branches & Dealers

Branches


BA Ventilation

Production units

Grevie production facility is a highly automised pressed fitting production

Karlovarska is a production facility focusing on more labour intensive production

29

Grevie, Sweden Karlovarska, Czech Republic


BA Ventilation

Financial performance 2006-2009

Grew steadily up to 2008

As a result of the financial crisis sales declined during 2009

Initially lost market shares but have adjusted price structure

Main cost reduction activities implemented before or during Q1 2010

10,5% EBIT margin in a peak market – room for improvement

30


BA Ventilation

Sales mix

31

A stable sales mix over a full business cycle

Today a market leader on European scale for Circular fittings and Circular specials

Rectangular sales supports a round revolution

Lindab sales by product group 2003–2009

15%

28%

9%

23%

7%

11%

5%

2%Circular Ducts

Circular Fittings

Circular Special

Ventilation products

Rectangular systems

Comfort

Machines

Other BAV

Traded goods


BA Ventilation

Customers

32

1. A strong culture for high service levels,

reliability and availability, and high quality

2. Deep and longstanding relationships with

installers

A broad distribution network that

enables partnering with local

installers

3. Historically a strong and dedicated

partner to the ventilation installers

professionals

Competitive cost position (relative

to total offering)

Cost efficient, specifically in fittings

Customer surveys highlights 3 success factors that contributes to

our uniqueness in terms of value proposition:

What is the most important criteria when

purchasing ventilation products?

0

20

40

60

80

100%

Denmark

Deliveryaccuracy/reliability ofsupply

Fair price

Product quality

Other

Service/technicalsupport

Energy efficiency

UK



Fair price

Energy efficiencySupplier loyalty

Product quality

Sweden

Delivery accuracy/

reliability of

supply

Product quality

Fair price

Supplier loyalty

Other

Energy efficiency


Germany


Fair price

Product quality

Other

Share of respondents

Service/technical support


BA Ventilation

Point of departure

Machines and Circular Fittings are most

profitable

Have not harmonized traded goods

portfolio across countries, strong potential

Have a very strong position in European

scale circular fittings and specials

Performance affected of economics of

scale and costs associated with

expanding in new countries

Significant potential for Comfort and some

potential for ADS with energy efficient

trend

*Per adjusted EBIT-margin (average 2005-2009)

Product group Ranking per

EBIT-margin*

Machines >15%

Circular fittings >15%

Traded goods >10%

Circular special 5-10%

Circular ducts <5%

Comfort <5%

Rectangular systems <5%


BA Ventilation

Journey ahead – focus areas

Need to excel both as cost leading manufacturer and as professional distributor

Circular fittings is our core business

Potential to bundle ducts and comfort

Comfort needs larger scale

34

Mark

et

att

racti

ve

ness

Low

High Drive towards leadership

or reduce focus




(Ma

rket gro

wth

, siz

e,

pro

fita

bili

ty,

Com

pe

titive

ness, E

ntr

y b

arr

iers

)

Comfort

Distribution


business model structurally

and/ or organically

Machines

Local

manufacturing



profit and growth

Fittings

Ability to win


BA Ventilation

Vision

The Nr 1

Ventilation supplier and distributor

in Europe and Russia


BA VentilationDistributor and product supplier – two different business models

36

Supplier Distributor

Cost position / Scale in the

relevant reach/ geography

Regional vs. national vs. local

Purchasing

High/ sufficient product quality

Low-cost and high-quality

manufacturing

Standardization

Purchasing of raw material

Product development

Ability to buy products at low cost

Ability to offer customer a full

bundle

Customer understanding

E.g. optimal bundle, technical

competence, purchasing

decisions, how to influence etc.

Purchasing

Logistics

Key account management

Distribution/ transportation cost

Sales & Marketing

Purchasing goods

Key success

factors

Business

model

fundamentals

Key costs

Raw material

Direct production costs

Depreciation of production units

(including machines)


BA Ventilation

Strategy summary

37

Point of departure Refreshed strategy

Integrated manufacturer and

distributor of Ventilation products,

organic growth ambitions in

comfort

Establishing full infrastructure and

rolling out manufactured product

range in all new markets

Two distinct businesses

Supply (ADS and Comfort)

Distribution

Sales of fittings first priority in all

markets, regardless of own or 3rd

party distribution

Grow as a leader in Distribution

and Comfort

Synergies in logistics and

productivity will be facilitated

through focused production hubs

lindab | we simplify construction


Business Area Building Systems

39


BA Building Systems

40

BA Buildings Systems is specialised in tailor-made steel buildings

Seen as the No. 1 supplier on a pan European basis

Holds a leading position in production and warehousing units

Region – percentage of sales Segment – percentage of sales

CIS 22%

CEE 38%Offices 10%

Industrial warehousing 30%

Other 5% Industrial

production 35%Western Europe

40%Sports 5%

Commercial 15%

*2005-2009


Software for builder/dealers• Builder/dealer pricing and project management software

• Extranet for dealers with large knowledge pool

• Search engines for reference buildings selected amongst 50 000

BA Building Systems

Product solutions

41

Single storey• Mainly for production, warehousing, commercial, leisure

Multi storey• Mainly for offices and retail


BA Building Systems

European footprint

42

Focus markets represent

75% of sales

Regional sales offices

coordinate local sales

managers

Regional sales offices with

Engineering support in local

languages

Project data in local

languages, local approvals

on hand

Market share is low due to

very fragmented market (2-

4% depending on markets)

Sales office

Total number of dealers=350Focus markets

Kazachstan

Production unit


BA Building Systems

Production units

Luxembourg for Western Europe, Czech for CEE and Russia for CIS

43

Bucharest, Romania

Diekirch, Luxembourg Prerov, Czech Republic

Yaroslavl, Russia


BA Building Systems


Strong development during the last business cycle

Strong GDP growth

Strong position in CEE and competitive offer

Heavily affected by the financial crisis; New build and CEE

Managed a slight profit despite a steep sales drop due to significant cost programme

Has developed a flexibility to adjust to cycles, using leased people

in the peak, as well as subcontracting some engineering work44

1,546

1,9002,066

978

0

1,000

2,000

2006 2007 2008 2009

0%

5%

10%

15%

20%

25%

SEK M EBIT Margin (%)


BA Building Systems

Sales mix

Higher share (up to 50-60%) small to medium sized buildings in Western Europe

Key account mainly large buildings (>3000 sqm) from West to East (direct foreign

investments)

Higher share commerce and multistorey buildings sales in Western Europe

45

0

50

100

150

Building size

3000-4000

sqm

4000+ sqm

2000-3000sqm

0-1000 sqm

1000-2000

sqm

147

Product solution

Single StoryBuildings

Multi Story Buildings

Other

147

End-usage

Warehouses

Manufacturing

Other

Commerce

147

Region

Russia, CIS

South East

North East

Key Accounts

West

Central

147

Order intake

(€M, average 2005-2009)

CEE

West

Europe


BA Building Systems

Customers

46

1. Provides quality/ technical competence

Project pricing/speed

Strong brand name/ recognition

2. Seen as a good additional product to

the builder dealers’ offering

Revenue upside to low cost

Extra potential to bid for complex/

large projects

3. Strong partner - good at establishing

strong relationships




purchasing building systems/ solutions?

0

20

40

60

80

100%

Manufacturing

Product quality

Fair price

Lead time

Payment termsReferences

Warehouses

Product quality

Fair price

Payment terms

Lead time

Commercial

Product quality

Fair price

Lead time

Payment terms

Ability to customize

Sports/leisure

Product quality

Fair price

Lead time

References

Ability to customize

Share of respondents (%)


BA Building Systems

Point of departure

Larger buildings more profitable

Most competitive in larger buildings

Welded frame technology

Effect of scale

Less small competitors

2008 BA Systems record year & 2009

BA year not computed, as not representative

0

5

10

15

20%

0-1000 sqm

12%

>1000 sqm

18%

35% 36%Net std margin

# projects

Estimated EBIT margin (%)

by project size (average 2006-07)

298 358

>15%

<15%

EBIT margin,

average


BA Building Systems


First priority to focus on large buildings – continue industrialisation process

Evaluate opportunities within smaller buildings

48

Ability to win

Mark

et

att

racti

ve

ness

Low

High

Low High


or reduce focus


business model


organically






profit and growth

Parking

Multi storey

building

Heavy

structure

Logistics

Agriculture

Small

industrial

Car

showrooms

Super mkts

Sports

Large

industrial

(Ma

rket gro

wth

, siz

e,

pro

fita

bili

ty,

Com

pe

titive

ness, E

ntr

y b

arr

iers

)


BA Building Systems

Vision

The preferred supplier

of sustainable solutions for industrial buildings

in Europe, Russia and CIS


BA Building Systems

The roadmap –

our strategy

50

Growth

markets

Main

markets

Success

factors

Large industrial

buildings

Small sized

industrial buildings

Europe/Russia/CIS

Adjacent segments if

served with standardized

solution

• Manufacturing excellence• Continuous cost improvements• Direct sales• Dealer recruiting & performance

management

• More cost effective solution• Dealer recruiting & performance

management

CEE & CIS Western Europe & CEE


BA Building Systems

Strategy summary

51


Focus on serving dealers with

tailor made solutions in all

targeted markets and for a large

number of end-usage segments

Focus on Russia

Core large industrial buildings as

first priority

B/D management and

recruitment

Focus on direct sales in

Russia

Focus on costs and

industrialization

Adding a more cost competitive

smaller solution as second priority



Business Area Building Components

53



BA Components is specialised in developing and supplying sheet metal based products and

systems for construction.

Seen as the No. 1 supplier to small and middle size customers working both in the

residential and the non-residential

Holds a leading market position in Nordic region and CEE;

limited sales to Western Europe

54

Region – percentage of sales Segment – percentage of sales

Non-residential

56%

Residential 44%

*2005-2009

CEE/CIS

40%Nordic 54%

Western Europe 6%



Product groups

55

Coverline• Profiled sheet metal roof, wall

products ,sandwich panels and

accessories

• Top 3 in core markets

Construline• Lightweight construction solutions

made from steel

Doorline• A wide range of sectional industrial

and garage doors mainly for the

Nordic markets

Residential Non-residential

Rainline• The biggest steel rainwater

system producer in Europe

Topline• One of Europe's leading

suppliers of thin steel based

residential roofing products

Seamline• Wide range of sheet metal

based products and

accessories for traditional

standing seam roofing



European footprint

56

10 production facilities of

varying sizes strategically

located across Europe

combined with central

warehouses

38 shared branches across

Sweden, Norway and

Finland

Over 700 stockholding

building merchant branches

in the Nordics

Over 1500 distributors

primarily in CEE

Major Production facility

Local Production Facility

Dealers

Branches & Dealers

Rep offices



Main production unit

Geographically optimised, modern and well-invested production facilities

High automation production in high cost countries and less standardised

production locally57

Förslöv, Sweden

Budapest, Hungary

Jels, Denmark

Bucharest, Romania




Strong development up until 2008 mainly driven by strong demand in core markets and

strategic pricing

2009 market affected by the economic situation; falling demand and price pressure

Sales dropped with 27%

Early actions on costs58

2 4332 812 2 927

2 144

15,9% 16,0%

14,1%

6,3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0

1 000

2 000

3 000

4 000

5 000

6 000

2006 2007 2008 2009

Sales

SEK MEBIT Margin

(%)


0

10

20

30%

Industrial

8

Residential

17

EBIT, Average

2003-2009 (%)

-1 102009

EBIT (%)


Understanding where we are today - point of

departure

Residential offering represents ~50% of

sales and ~70% of our profits

Rainline main driver

Nordic the largest market

CEE generates highest margins

<10%

>15%

EBIT margin,

average


60

24,4%

24,3%

17,3%

9,4%

9,3%

15,5% Rainline

Coverline

Topline

Construline

Doorline

Seamline

Lindab average sales by product group 2003–2009

BA Building ComponentsSales mix - Small changes in the overall sales mix, our

products have been growing neck by neck

Sales mix has remained quite constant over the 2003-2009 period

Strategy has been focusing on selling steel components and solutions as

a full range supplier



Customers feedback; what makes us unique

61

1. A strong culture for high service levels,

reliable deliveries and availability

2. Deep and longstanding relationships

with installers

3. Seen as being the leader in quality

4. Premium price




purchasing building component products?

0

20

40

60

80

100%

Nordic

Other*

Service/technical support

Product quality

Fair price

Deliveryaccuracy/reliability

of supply

CEE

Other*Service/technical support

Product quality

Fair price

Delivery accuracy/reliability of supply

Percentage of respondents


BA Building ComponentsEstimated Lindab market share by country and product

group - big potential in core markets

Rainline market size; 5 Euro per capita in the Nordic countries and 1.5 Euro per

capita in CEE

Big potential for market growth for Rainline in CEE markets

62

ConstrulineToplineRainline CoverlineSeamlineMarket

share

Residential Non-residential

Nordics ~30% ~20% ~20% ~15% ~10%

CEE ~10% ~20% ~10% ~15% ~10%

http://images.google.com/imgres?imgurl=http://www.cslforum.org/images/flag_norway_me.jpg&imgrefurl=http://www.cslforum.org/about.htm&usg=__CfHMUhnwgCowr6MPcJNBgVrDYn8=&h=39&w=58&sz=2&hl=en&start=9&tbnid=-dt8YqzF3JP07M:&tbnh=39&tbnw=58&prev=/images?q=Norway+flag&imgsz=icon&gbv=2&hl=en




First priority to aggressively grow Rainline on large scale and create

supporting local strongholds for residential roofing

Focus our non-residential business on strong profitable local positions in

our select core markets63

Ability to win

Mark

et

att

racti

ve

ness

Low

High

Low High

Residential

roofing


or reduce focus


business model


organicallyRainline

Industrial

Roofing/walling




Partition

wallsDoorline



profit and growth

(Ma

rket gro

wth

, siz

e,

pro

fita

bili

ty,

Com

pe

titive

ness, E

ntr

y b

arr

iers

)



Vision

Become the European Nr 1 supplier in Rainline

and steel residential roofing

Become market leader for non-residential steel

roof and wall solutions in core markets



The roadmap –

our strategy

65

Growth

markets

Core

markets

Success

factors

Rainline and roofing

Nordics and CEE Nordics and CEE

CEE and focused efforts

in Russia and UK Nordics and CEE

Roofing and walling

• Strengthened relations with installers• Increased focus distribution• Marketing and communication

Residential Industrial

• Maintain low cost base• Strengthening product portfolio

Focus

products



Focus product - Rainline

Our aim:

To considerably strengthen Lindab Rainline

distribution

To develop and strengthen the Lindab

Rainline installer network

To agressively increase Lindab Rainline’s

sales and market share and as a spinoff

increase sales of the other products in the

residential offer

Introducing The Lindab “Rainline Center” Sales Concept CEE/CIS



Lindab Rainline Sales Concept CEE

1. Lindab Rainline Center

2. Lindab Rainline Express

3. Lindab Rainline Expert

Installers Loyalty

program



Lindab „Rainline Loyalty Program“

Our aim:

To create and maintain a database of

installers i.e. „key decision makers“

To provide an extra motivation to our

dealers to sell Lindab products

To provide an extra motivation to installers

to use Lindab

To have direct connection to installers



Strategy Summary

69


Focus on selling steel

components as a full range

supplier

Geographic through sequenced

approach (sales – warehouse –

manufacturing)

Clear and separate focus on

residential and industrial segments

Growth of Rainline first priority


position

Industrial products second priority

Cost-effectiveness with

selected growth

Supporting products and

product development



FINANCIALS


Lindab Group

Current market exposure

72

Sales per region 2009

Nordic countries

42%

WE, excl PIIGS

29%

CEE/CIS, Group A

14%

Other markets

5%

CEE/CIS, Group B

7%

PIIGS

3%


Lindab Group

Cost reduction focus

Cost saving in total SEK 600 m since Q4 2008, approximately 50% of savings is

permanent

Production capacity in place

Sales organisation footprint in place, limited cost reduction

Admin cost same level as 2005

73

MSEK 2005 2010

Production -836 -880 +5.2%

Sales and R&D -852 -999 +17.3%

Admin -521 -533 +2.3%

Total -2 209 -2 412 +9.2%

SEK/EUR

9.28

SEK/EUR

10.20


FINANCIAL TARGETS


Lindab Group

Financial targets

6% 8%

Geographic focus on higher growth regions, particularly Russia

Focus on our most competitive products

Starting from a low point

Our market is expected to grow at an average of 3-4% y-o-y.**

75

Growth (organic)

*Average organic growth excluding acquisitions 2001 - 2008

5.4% (total topline incl. acquisitions and currency 9.3%)

**Bain


Lindab Group

Financial targets

14% unchanged

Under good economic conditions

Strong operating leverage

Change product mix towards more profitable product groups

76

EBIT


Lindab Group

Financial targets

1.0 -1.4 0.8 -1.2 times

In line with levels over the past few years*

77

Gearing

*Excluding acquisitions


Lindab Group

Financial targets

40-50% of net profit unchanged

In line with levels in 2007 & 2008

78

Dividend

*However, Lindab’s long-term financial needs will always be taken into consideration


SUMMARY OF STRATEGY


Lindab Group

Previous strategy was sound – room to do better

80

Strong fundamentals – excellent starting point

Fantastic brand

Unique market positions

Premium products (high quality)

High service performance

Geographic focus – good balance stable/growth markets

The team; the talent; the Entrepreneurial spirit


Lindab Group

Growth will be supported by external trends

81

Some “catch up” effect

Eastern Europe returns to a growth trend

Russia/CIS is today <5% of our sales will grow strongly

Accelerating environmental trend


Lindab Group

Ventilation – Key strategic focus areas

82

Sales of fittings, own or

3rd party distribution

Grow as leader in

distribution

Comfort needs larger

scale

Two distinct businesses; supply and distribution

Mark

et

att

rac

tive

ne

ss

Low

High Drive towards leadership

or reduce focus




(Ma

rke

t gro

wth

, siz

e,

pro

fita

bili

ty,

Com

pe

titivene

ss,

En

try b

arr

iers

)

Comfort

Distribution


business model structurally

and/ or organically

Machines

Local

manufacturing



profit and growth

Fittings

Ability to win


Lindab Group

Building Systems – Key strategic focus areas

83

Focus on direct sales

in Russia to

complement Builder

dealer sales

Add a more cost

competitive smaller

building solution

Large industrial buildings main priority

Ability to win

Ma

rke

t a

ttra

cti

ve

ne

ss

Low

High

Low High


or reduce focus


business model


organically






profit and growth

Parking

Multi storey

building

Heavy

structure

Logistics

Agriculture

Small

industrial

Car

showrooms

Super mkts

Sports

Large

industrial

(Ma

rke

t g

row

th, s

ize

, p

rofi

tab

ility,

Co

mp

etitive

ne

ss, E

ntr

y b

arr

iers

)


Lindab Group

Building Components – Key strategic focus areas

84

Aggressive growth of

Residential/

Rainline

Strengthen non-

residential products in

core markets

Clear and separate focus on residential and non-residential

segments

Ability to win

Mark

et

att

rac

tiven

ess

Low

High

Low High

Residential

roofing


or reduce focus


business model


organicallyRainline

Industrial

Roofing/walling




Partition

walls

Doorline



profit and growth

(Ma

rket

gro

wth

, siz

e,

pro

fita

bili

ty,

Com

pe

titivene

ss,

En

try b

arr

iers

)


Lindab Group

Summary – Grow faster than before

85

Point of departure Refreshed strategy (3-5 years)

Each BA’s had a similar approach

to most of their markets

Rolling out the same product

groups in similar ways in all

markets

Focusing our efforts and investments

“where we make the most money ” and “in

largest growth potential segments”

Differentiated approach market by market

based on strengths

KEY FOCUS AREAS:

BAV: Fittings & Distribution. Grow

Comfort.

BABC: Residential (in particular

Rainline). Non-residential in Core

markets

BABS: Large buildings

Selective acquisitions to strengthen core

offerings


Lindab Group

New group vision

86

“The leader in

industrialised ventilation

and building solutions -

Europewide”

Lindab current Vision

1) Simplifying construction

2) Down to earth

3) Neatness and order

Lindab previous Vision Lindab new Vision

“To be the preferred

partner for building

professionals in our core

products Europewide”

Lindab will achieve its

vision through following

its core values


”Going for Gold”

Optimize

Growth

DeliverLindab culture


THANK YOU

Documents

lindab group presentation Lindab Group Investor Day 14 ... · lindab | group presentation Agenda 12.30-12.45 Trading update David Brodetsky 12.45-13.30 Market outlook –VTT/Euroconstruct