Gränges (AO) | Buy | Pre CMD view and fire update

研报英文原文证据摘录

Gränges (AO) | Buy | Pre CMD view and fire update

we do not expect

management to revise its financial targets, as the weaker profitability mainly reflects temporarily elevated capital employed following

recent expansion investments.

Limited fire earnings impact likely

The fire in an electrical cabinet at Gränges resulted in a shutdown of the hot rolling mill. The damage to the equipment itself is limited,

but long lead times for new control system hardware from ABB/Siemens make the restart process complex, and it will probably take

between 3 and 6 months before the facility is up and running.

Gränges has sufficient hot-rolled inventory to continue cold rolling operations through the remainder of Q2, limiting the short-term

impact. The larger impact is expected in Q3–Q4, depending on the restart and ramp-up pace.

Gränges is also working on outsourcing its need for hot rolling capacity and expects compensation through business interruption

insurance. At the same time, profitability in Shandong is relatively low, so the overall impact should remain limited.

Table 1:Financial targets and outcome 2025

Area Financial target 2025 performance Assessment

Sales growth / Average yearly Operating profit increased 2.7% YoY, Gränges met the long-term growth target on a rolling 3-year basis,

Profit growth operating profit growth but the 3-year CAGR reached 20% supported by market share gains and productivity improvements.

>10%

Capital structure Net debt between 1–2x Net debt / EBITDA was 1.6x Target achieved. Strong operating cash flow and lower capex after

EBITDA completing the expansion program improved leverage.

Profitability ROCE >15% ROCE was 10.8% Target not achieved. Profitability declined by 1.1%, mainly due to higher