Capital Market Day
Stockholm, 29/05/2009
The Nolato Group in brief
Founded in 1938 in Torekov, Sweden
Listed in 1984
Sales SEK 2,824 million
Operating income (EBITA) SEK 240 million
ROCE 18.4%
Employees (year average) 4,531
Nolato Medical 22% of sales
Nolato Telecom 44% of sales
Nolato Industrial 34% of sales
History
Financial highlights 2008
Business areas
The future Nolato Medical – Global expansion and acquisitions
Nolato Telecom – Broadened customer offering
Nolato Industrial – Greater market share
Flexible and effective solutions for the development and production of polymer product systems
Business mission
“Nolato is a high-tech developer and
manufacturer of polymer product systems
for leading customers in specific market
areas.”
“With in-depth expertise in materials and processes, early
involvement in customer projects, advanced project
management and detailed knowledge of each customer’s
specific requirements, Nolato is a long-term, experienced
and innovative partner.”
A business concept which adds value
Customers Developed
solution
Nolato
Market Application Specification Development Project management Construction/design Production Logistics Function Cost-effectiveness Flexibility
Asia 69% Europe 31%
Production/Technology/Sales Technology/Sales
Nolato – close to its customers
Employees 31/03/2009 (year average) 3,370
One Group – three business areas
Nolato Telecom
Nolato Medical
Production/Technology/Sales Technology/Sales
Nolato Medical in brief
A leading development and production partner for
medical technology and pharmaceuticals customers.
The current situation:
Strong market position in the Nordic region
Growth, with excellent profitability
Customers:
Astra Tech, Boston Scientific, Coloplast, Gambro, Novo Nordisk, Nycomed, etc.
The future:
Internationalisation via outsourcing and acquisitions in Europe and North America
Sales
SEK millions Q1 2009 Q1 2008 2008
Sales 178 147 632
Operating income (EBITA) 24 21 89
EBITA margin, % 13.5 14.3 14.1
Nolato Telecom in brief
A global developer and manufacturer of system products for mobile phone and telecom base station customers.
The current situation:
Strong position with selected customers
All mobile phone-related production in Asia
Unique expertise within project management
Customers:
Ericsson, Huawei, Motorola, Nokia, Nokia Siemens, RIM and Sony Ericsson, etc.
The future:
Organic growth with existing and new customers through a broader offering
37%
Sales
Production/Technology/Sales
SEK millions Q1 2009 Q1 2008 2008
Sales 226 284 1,243
Operating income (EBITA) 0 25 114
Four operational areas
EMI shielding
Converting
Mobile phones
Nolato Industrial in brief
A leading developer and manufacturer of products and product systems for customers in the automotive industry, white goods, gardening/forestry,
furniture and other selected industrial segments.
The current situation:
Strong position in Scandinavia and Central Europe
Following industry market trends
Customers:
Electrolux, Haldex, IKEA, Ifö, Lear, Lindab, MCT Brattberg, Volvo, etc.
The future:
Focus on market shares, efficiency and cash flow
34% Sales SEK millions Q1 2009 Q1 2008 2008 Sales 206 260 950 Operating income (EBITA) – 1 19 55 EBITA margin, % –0.5 7.3 5.8 Production/ Technology/ Sales
Cutting-edge technology
and flexible production
Environmental
Policy
Information
Policy
Quality
Policy
Stable set of values
Nolato’s Basic Principles
Code of
Conduct
The rights of individuals
Respecting human
rights
Respecting our
employees
Not discriminating
Good working
environment
People The environment
Sustainable development
Efficient use of natural
resources
Limiting waste
Constant
improvements
Open information
Honest business deals
Complying with laws
No bribes
No illegal
collaboration
Ethics
Nolato’s strengths create success
Advanced, leading technology
in three customer segments
- Expertise in polymers since 1938
Expertise in development and design
Flexible and effective production capacity
Skilled project management
Expertise in applications adds value
Effective adaptation in a changing world
Strong financial position
Financial trends
and position
0 2 4 6 8 10 2005 2006 2007 2008 R12 0 10 20 30 40 50 60 2005 2006 2007 2008 R12 0 4 8 12 16 20 24 2005 2006 2007 2008 R12 0 50 100 150 200 250 300 2005 2006 2007 2008 R12
Financial trends
EBITA margin* % Equity/assets ratio % % SEK millions*Excluding non-recurring items **Excluding acquisitions and disposals
ROCE* Cash flow after inv**
Q1 12 months
2009 2008 R12 2008
Net sales, SEK millions 606 690 2,740 2,824
Operating income (EBITA), SEK millions 16 59 197 240
EBITA margin, % 2.6 8.6 7.2 8.5
Income after financial items, SEK millions 6 53 169 216
Net income, SEK millions 4 41 141 178
Cash flow after investments, excl. acquisitions and disposals, SEK
millions 56 47 305 296
Earnings per share, SEK 0.15 1.56 5.36 6.77
Adjusted earnings per share, SEK 0.23 1.63 5.59 6.99
Equity/assets ratio, % 54 46 - 50
Net debt, SEK millions 28 265 - 95
Return on capital employed (rolling 12 months), % 14.7 16.7 - 18.4
Sales and earnings per quarter
SEK millions SEK millions
Sales
Equity/assets ratio 54%
Net debt SEK 28 million
Credit agreements entered into
– 2009: SEK 750 million
– 2010: SEK 350 million
– All covenants met
Strong financial position
0 50 100 150 200 250 300 350 2004 2005 2006 2007 2008 Net debt
Nolato
Medical
Leading development and production partner for customers within the
fields of medical technology and pharmaceuticals.
Current position:
Strong market position in the Nordic countries Stable growth and profitabilityCustomers:
Astra Tech, Boston Scientific, Coloplast, Gambro, Novo Nordisk, Nycomed, etc.Outlook:
Internationalisation through outsourcing and acquisitions in Europe and North America More advanced product systems and more customer product developmentNolato
Medical
in brief
22%SEK millions 2008 2007 2006 2005 2004 Net sales 632 526 244 184 137 Total growth 20% 116% 33% 34% 34% Organic growth 15% 23% 23% 25% 26% EBITA 92 76 36 42 25 440 Production/Technology/Sales Technology/Sales
70 years of
experience
History in brief
1938
Nolato was founded in Torekov, Sweden
1957
First Medical customer
1997
Formation of Medical organisation (Torekov)
1999
Medical site Lomma –
Technology
2004
Acquisition of Kaltoplast –
Technology
2004
Medical site Hungary –
Geographic
2006
Acquisition of Medical Rubber –
Technology
2007
Acquisition of Cerbo Group –
Technology
2007
Medical site Kristianstad –
Technology
2008
Medical site China –
Geographic
Two
businesses
Pharmaceutical packaging
– Large global players and contract packagers
– Off-the-shelf products/customer specific – Increased product polarisation
– Standard low cost – High end
– Bulky products (geographical limitations)
25
Medical devices
– Customer-specific products
– Long-term customer relationships – Long product lifecycles
– Simple to complex products/systems – Increased focus on product design
Pharmaceutical packaging Medical devices
Disposal products for diabetics
Condition: The product is aimed largely at older people with limited fine motor skills and impaired vision.
Our task: We are an outsourcing partner for a customer. We injection-mould, pad-print and deliver products on trays in large volumes.
Urisheath
Condition: Urisheaths are used as an aid for incontinence. Normally they are made of latex and the packaging announces sickness.
Our task: To find the right material and develop a method for producing the urisheaths in order to fulfil the high requirements and to be able to use a more attractive packaging.
AstraZenecaNebunette inhaler
Condition: The product is used by children and older people to allow them to inhale asthma medication in more than one breath.
Our task: Injection moulding of components in plastic, TPE and silicone. Overall responsibility for assembly, packaging and final check of the finished product.
Face mask in TPE, inhalation valve made of polysulphone, inhalation/exhalation membrane made of silicone, “fish” made of TPE.
Ergonomic design
Condition: New patented packaging solution developed by Nolato in close cooperation with patient organisations.
Our task: Approximately 10% of all people have decreased hand functionality, and therefore have problems opening child-safe packaging. We have developed a packaging optimised for easy opening.
31
Growth
Increased volume dependent on ageing population combined with lifestyle diseases
Cost pressure in healthcare systems
Increased cost for healthcare in combination with fewer
blockbuster patents creates cost pressure, leading to generic drugs and home care
Increased internationalisation
Higher development and registration costs lead to greater need for global sales and increased interest in LCC production
More design and shorter product lifecycles
The products approach the patients, which increases the need for design and product updates
Earlier and greater involvement in customer
development
Demands for more and faster product launches increases the need for intensified partnership with strong suppliers
Increased need for global production
Our customers would like to have suppliers who can support them with production on different continents
More system supplies
Our customers demand more assemblies and system supplies in order to allocate more resources to their core competence
More professional procurement
Increased outsourcing and cost pressure increases focus on professional procurement. Reduction of supplier base, global suppliers, etc.
Development
Idea Full-scale production
R & D Product development – early involvement for optimisation of production process Mechanical design/ Design for Assembly Materials laboratory Project engineers (product, moulds, process, quality) Sourcing/ purchasing Global supplier network (e.g. components/ products and moulds)
In-house tool shop with the Nolato patented Rapid Tooling technology
Moulding of plastics and technical rubber (1, 2 and 3k)
Extrusion, injection blow moulding, Dipping
Punching and rotary die cutting
Decoration (printing, painting, plating, IMD, IML, IMF, DD)
Assembly processes
Testing
Logistics
Project Volume supply
Injection moulding plastic and rubber
Specialists in polymer materials: Plastics, TPE, silicone 2K and 3K.
Dipping
Highly-automated process
Extensive knowledge of materials
Extremely high precision in dipping of catheter balloons Extrusion
Medical hoses and tubing manufactured in clean rooms Plastics, TPE, silicone
Pharmaceutical packaging
Primary packaging, standard and customer range
Added value
Automation, assembly, box building Decoration (DD-hard coating, IMD) Mould design, F1
Suitable logistics solutions
Nolato Medical
Strategy
Organic growth
Offer a complete polymer solution Establish new customers in Europe and US with focus on a limited number of customers Participate in and contribute to customer developmentprojects
Outsourcing
Being experts in outsourcing Forward integrationAcquisitions
Nolato Medical’s
strengths
50+ years of experience in Medical
Customer focus – the will to understand
High-tech development and leading technology in
three market segments
Efficient and flexible production capacity
Competent project management putting high
demands on our customers
Dealing effectively with adaptation changes
in the market place
Cutting-edge medical quality and mentality
One Group – three business areas
Nolato Telecom
Nolato Medical
Business areas for balanced operations
Technology Products Product cycle Customer potential Success factors Market Market growth Driving forcesNolato Medical Nolato Telecom Nolato Industrial Basic technology Polymer materials Polymer materials Polymer materials
Market Continental/global Global National/cont./global
Market
characteristics “Safety” “Attractive” “Functional”
Market growth
Driving forces Demography, quality of life, home care
GDP, communication Automotive and industrial production
Number of
customers Just right Few Many
Product cycle Long Short Long/medium
Product Components, systems
and consumables Components and systems Components and systems Our success factors Medical understanding Quality & safety
technology Customer preferences Technology/project mgmt. Production flexibility Cost-effectiveness Productivity Cost-effectiveness
Nolato Medical is growing rapidly
and is on the brink of globalisation.
With the acquisition of the
Kristianstad factory, Nolato became
an established supplier of
telecommunications products.
Listing.
For fifty years, exclusively Swedish
industrial customers.
2009 1984 1997 1938An evolving group
Nolato
Medical
The current situation Strong growth
Strong market position in the Nordic region Broad technology base
Strategy Profitable growth – Organic – Outsourcing – Acquisitions Expertise in project
management and design Trends
Consolidation begun “Premier League”: None
Global/continental presence Additional outsourcing
Nolato
Telecom
The current situation Excellent customer relationships Competitive production structure Develops advanced subsystems Trends
Design and cosmetic effects Combining multiple materials The delivery route:
– Volume suppliers
– “Benchmarking” suppliers
– Development and technology suppliers Environmental aspects Strategy Organic growth “Best in class” Vertical integration “Nolato ImageTech”
Nolato
Industrial
The current situation
Strong position in the Nordic region and with selected customers in Europe Highly-automated lean production Strong customer relationships
Healthy cash flow Trends
Sharper focus on:
– weight and environment
– smart, cost-effective solutions
Further price pressure
Growing difference between the automotive industry and other industries
Strategy
Win market shares
Lead the way in terms of technology
Acquisition of:
– New customer segment – New technology
