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

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Presentation on theme: "2006 Full-year Results & 2007 Outlook Frank Gad, Chief Executive Officer March-April 2007."— Presentation transcript:

1 2006 Full-year Results & 2007 Outlook Frank Gad, Chief Executive Officer March-April 2007

2 Full-Year & 2007 Outlook – March-April 2007 / SP Group AGENDA 1. SP Group – an overview highlights 3. Group financial highlights Business areas – results & outlook 5. Group strategy 6. Financial objectives outlook Frank Gad (born 1960, M. Sc.) Career: Nov. 2004: CEO, SP Group A/S : CEO, FLSmidth A/S : President, Mærsk Container Industri A/S : Odense Steel Shipyard A/S, latest as EVP

3 Full-Year & 2007 Outlook – March-April 2007 / SP Group SP Group A/S Injection mouldingPolyurethaneVacuumCoating SP Moulding A/S Tinby A/S Ergomat A/S Gibo Plast A/SAccoat 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

4 Full-Year & 2007 Outlook – March-April 2007 / SP Group 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 2006 HIGHLIGHTS Results before tax & minorities DKKm Operating profit (EBITDA) DKKm +48,4% +99%

5 Full-Year & 2007 Outlook – March-April 2007 / SP Group GROWTH DRIVERS Sales and marketing focus Organic growth in % International sales focus Exports in % of total revenue Medico focusFocus on own brands Revenue in DKKm

6 Full-Year & 2007 Outlook – March-April 2007 / SP Group 2006 RESULTS EXCEEDED EXPECTATIONS DKKm Change % Revenue EBITDA Operating profit (EBIT) Profit before tax & minorities Assets in total Equity incl. minorities Net interest-bearing debt Cash flows, operations Cash flows, investments Cash flows, financing n.a. Revenue split 2006, DKKm Initial guidance: 4-8% growth; DKK 10-15m profit before tax and minorities

7 Full-Year & 2007 Outlook – March-April 2007 / SP Group 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 2K and 3K moulding

8 Full-Year & 2007 Outlook – March-April 2007 / SP Group 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 Revenue EBITDA Operating profit (EBIT) Result Employees (average)

9 Full-Year & 2007 Outlook – March-April 2007 / SP Group 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. RollersSolid 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. MatsDuraStripe

10 Full-Year & 2007 Outlook – March-April 2007 / SP Group 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 Revenue EBITDA Operating profit (EBIT) Result Employees (average)

11 Full-Year & 2007 Outlook – March-April 2007 / SP Group 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 formingCNC millingHigh pressureTwinsheet VACUUM FORMING (1)

12 Full-Year & 2007 Outlook – March-April 2007 / SP Group 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 Revenue EBITDA Operating profit (EBIT) Result Employees (average) 76

13 Full-Year & 2007 Outlook – March-April 2007 / SP Group 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 Location: Kvistgaard (DK). COATINGS (1) Coating Medico

14 Full-Year & 2007 Outlook – March-April 2007 / SP Group 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 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 Revenue EBITDA Operating profit (EBIT) Result Employees (average)

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

16 Full-Year & 2007 Outlook – March-April 2007 / SP Group 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 Investments in property, plant and equipment

17 Full-Year & 2007 Outlook – March-April 2007 / SP Group 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 Distribution of employees by geography in 2006 (average)

18 Full-Year & 2007 Outlook – March-April 2007 / SP Group OUTLOOK FOR 2007 Growth in 3 business areas; Gibo Plast to offset shortfall of revenue Group revenue growth of 4-8% = revenue of DKK m Declining negative impact from Polish start-ups and integration costs related to Danfoss Plastics Group profit before tax and minorities is estimated at DKK m 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 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%

19 Full-Year & 2007 Outlook – March-April 2007 / SP Group 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 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 42.9% return in 2006 Share price development Share price (DKK)Total index Heading for the 5% Profit before tax and minorities in % of revenue

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

21 Additional information: CEO Frank Gad Phone: (+45) Subscribe to Stock Exchange Announcements at


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