Annual and
Sustainability
Report 2021
Gränges is a global leader in aluminium engineering,
manufacturing and innovation.
Gränges 125 years
Gränges of today is a young company with a long history. In 2021, it was exactly 125 years since
Gränges was founded. Gränges’ history is a story of constant development and transformation.
During its long history, Gränges has developed and adapted based on society’s changing needs, and
has been associated with railways, mining, shipping operations, ore exports, car safety – and not the
least aluminium. At the beginning of the twentieth century, Gränges was the highest valued company
at the Stockholm Stock Exchange, in the middle of the century Gränges was the world’s largest ore
supplier and towards the end of the century the company was a subsidiary of the Electrolux Group.
Today, Gränges is an aluminium technology company that drives the development of lighter, smarter
and more sustainable aluminium products and solutions. The common factors throughout the years
have been adaptation and innovation; to adapt the business to new conditions and to constantly
create new innovations that drive development further.
Read more about Gränges’ history on pages 141–142 and on the website, www.granges.com.
>> ANNIVERSARY BOOK ABOUT GRÄNGES’ HISTORY
Gränges’ long and exciting history is described in the book “Gränges – since 1896”,
which was published as part of the 125
th
anniversary celebration of Gränges in 2021.
The book is written by the business journalist and author Ronald Fageräll and
published by Förlaget Näringslivshistoria.
GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
ABOUT GRÄNGES
01 2021 in brief
03 CEO statement
05 This is Gränges
07 Gränges’ products
08 Business model
09 A strong posit ion in the value chain
10 Global trends
12 M a r k e t s
14 Gränges Eurasia
16 Gränges Americas
18 Strategy
21 Innovation for profitable growth
23 Operational excellence through
continuous improvement
27 Long-term targets
SUSTAINABILITY
29 A strong commitment to sustainabil ity
30 Sustainability framework and
2025 targets
31 Climate strategy
33 Sustainable innovation and sales
35 Responsible and sustainable sourcing
38 Resource-ecient operations
41 Diverse and high-performing teams
43 Ethical business practices
44 REASONS TO INVEST IN GRÄNGES
45 THE SHARE AND OWNERS
47 RISK MANAGEMENT
53 BOARD OF DIRECTORS’ REPORT
58 CORPORATE GOVERNANCE REPORT
FINANCIAL STATEMENTS
70 Financial statements content
71 Consolidated financial statements
75 Notes to the consolidated
financial statements
101 Alternative performance measures
102 Definitions
103 Five-year summary
104 Parent company financial statements
108 Notes to the parent company
financial statements
113 Proposed appropriation of retained earnings
114 Auditor’s report
118 SUSTAINABILITY NOTES
134 GRI CONTENT INDEX
1 4 0 G L O S S A R Y
141 GRÄNGES 125 YEARS
143 ANNUAL GENERAL MEETING 2022
CONTENTS
To develop lighter, smarter
and more sustainable
aluminium products and
solutions.
PURPOSE
Gränges’ formal annual report according to the Swedish Annual
Accounts Act comprises pages 47–113. The statutory sustainability
report according to the Swedish Annual Accounts Act is found on
pages 29–43, 55 and 118–138.
GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
2021 in brief
>> KEY EVENTS
Strong recovery: Gränges developed new ways of working
with suppliers and customers to create value during the
continuing pandemic. Despite dramatic swings in demand
and supply, sales volume in 2021 grew by almost 40 per cent
to 489 ktonnes, a new all-time-high record. Adjusted
operating profit rebounded to SEK 1,008 million (648),
also a record, mainly driven by improved sales volume.
A slowdown of demand from the automotive customers
due to continued shortage of semiconductors caused severe
supply chain problems for the customers, which had a neg-
ative eect on Gränges' sales volume. However, most of the
other markets showed a continued strong demand through-
out the year.
First full year with Gränges Konin, and integration
proceeded as planned. Good development in the business
unit Gränges Powder Metallurgy.
Continued ambitious investments in all regions.
First steps towards battery applications: Gränges
moved actively to support the green transition and the
electrification of the transportation industry.
Good progress in sustainability: Gränges upgraded its
sustainability targets and issued a Sustainability-Linked Bond.
125-year celebration: Gränges celebrated its 125
th
anniversary.
New President and CEO: Jörgen Rosengren assumed his
position as President and CEO of Gränges on 1 October
2021.
>> PERFORMANCE SUMMARY
Financial summary 2021 2020 Change
Sales volume, ktonnes 488.9 350.6 39%
Net sales, SEK million 18,130 11,008 65%
Adjusted operating profit
1) 2)
,
SEK million 1,008 648 56%
Adjusted operating margin, % 5.6 5.9 –0.3 ppt
Adjusted operating profit per tonne,
kSEK 2.1 1.8 0.2
Operating profit, SEK million 833 584 43%
Operating margin, % 4.6 5.3 –0.7 ppt
Profit for the year, SEK million 595 363 64%
Earnings per share basic 5.60 4.21 1.39
Earnings per share diluted 5.58 4.21 1.37
Cash flow before financing activities,
SEK million 62 –322 n/a
Equity/assets, % 44.0 43.7 0.2 ppt
Net debt, SEK million 3,643 3,292 351
Return on capital employed, % 10.0 8 .1 1.9 ppt
Sustainability summary
3)
2021 2020 Change
Total Recordable Rate
4)
6.5 5.5 1.0
Carbon emissions intensity
(scope 1+2), tonnes CO
2
e/tonne 0.88 0.83 6%
Carbon emissions intensity
(scope 3), tonnes CO
2
e/tonne 8.4 9.6 –12%
Sourced aluminium scrap, % 28.5 22.5 6 ppt
1) Adjusted for items affecting comparability. Read more on page 87.
2) Read more about alternative performance measures on page 101.
3) 2020 excludes Gränges Konin and Gränges Powder Metallurgy.
4) Number of recordable accidents per million hours worked. Read more on page 130.
1 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
• Sales volume increased by 39 per cent to 488.9 ktonnes
(350.6). Net sales increased to SEK 18,130 million
(11,008).
• Adjusted operating profit
1)2)
amounted to SEK 1,008
million (648) and adjusted operating profit per tonne was
2.1 kSEK (1.8).
• Profit for the period amounted to SEK 595 million (363)
and includes items aecting comparability of SEK –175
million (–64).
• Adjusted cash flow before financing activities was
SEK 607 million (1,180), representing a cash conversion
of 60 per cent.
• Carbon emissions intensity amounted to 0.88 tonnes
CO
2
e/tonne for scope 1+2 and 8.4 tonnes CO
2
e/tonne for
scope 3. Excluding Gränges Konin and Gränges Powder
Metallurgy, scope 1+2 intensity was reduced by 11 per
cent to 0.73 (0.83) and scope 3 by 3 per cent to 9.3 (9.6).
Total carbon emissions intensity (scope 1+2+3) has now
been reduced by 19 per cent vs. baseline 2017
3)
.
19 20 211817
0
1
2
4
3
SEK million kSEK
Adjusted operating profit
Adjusted operating profit per tonne
0
250
500
1,000
750
Adjusted operating profit
1) 2)
Adjusted cash flow before
financing
2)
19 20 211817
%
0
50
100
200
150
SEK million
Adjusted cash flow before financing
Cash conversion
0
300
600
1,200
900
0
200
100
400
300
500
19 20 211817
ktonnes
North and South America
EuropeAsia Pacific
Sales volume Carbon emissions intensity
4)
Sourced aluminium scrap
4)
1) Adjusted for items affecting comparability. Read more on page 87,
Note 14.
2) Read more about alternative performance measures on page 101.
3) Baseline 2017 recalculated to include Gränges Konin.
4) 2017–2020 exclude Gränges Konin and Gränges Powder Metallurgy.
0
10
5
15
25
20
30
%
Aluminium scrap of total
sourced metal inputs
19 20 211817
>> PERFORMANCE
0
5
10
15
19 20 211817
Own operations and purchased
energy (scope 1+2)
Sourced metal inputs (scope 3)
Tonnes CO
2
e/tonne
• The share of sourced aluminium scrap increased to
28.5 per cent, which corresponds to 25.0 (22.5) excluding
Gränges Konin and Gränges Powder Metallurgy.
• Total Recordable Rate increased to 6.5, which
corresponds to 6.9 (5.5) excluding Gränges Konin
and Gränges Powder Metallurgy.
• The Board of Directors proposes a dividend of
SEK 2.25 (1.10) per share, corresponding to 40 per cent
(32) of the profit for the year.
2 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
A year of recovery and investment for the future
A commitment to close cooperation with customers and suppliers. Fast action in the face of dramatic swings
in demand, supply chain challenges, and cost increases. Innovation. Teamwork. A good contribution from
Gränges Konin. All these things helped to make 2021 a year of strong recovery as well as record volumes
and profit, despite a challenging environment. In sustainability, we made good progress against our very
ambitious targets. We also kept investing in capacity, operational improvement, and future growth.
We’re proud of these achievements, but we’re not content. We have taken action to increase growth
and profitability during 2022. In parallel, we’re making a plan for the future.
Recovery to record volumes
In 2021, the market for our products recovered after the sharp
decline caused by the COVID-19 pandemic in 2020. It’s true that
demand from automotive customers was weaker toward the end
of the year, as a result of the global shortage of semiconductors
and other components. Nevertheless, strong demand from other
customers, the additional volume contributed by Gränges Konin,
and increased production capacity boosted full-year sales volume
to 489 ktonnes. That is our highest sales volume ever, and almost
40 per cent more than in 2020. Our net sales and operating profit
also reached all-time-high levels. This represents a return to our
long-term trend of profitable growth. Since our introduction on the
stock market in 2014, sales volume has tripled, and operating
profit has more than doubled.
Gränges Konin: good contribution, high hopes
2021 was also the first full year for Gränges Konin as a member of
the Gränges Group. It was a very intense and productive first year.
As with any acquisition, it brought with it some new challenges
and a lot of hard work for everyone involved, but also new oppor-
tunities. Thanks to good teamwork, the first phase of the integra-
tion is now complete. Both the team in Gränges Konin and every-
one else in Gränges have learned a lot during this year, and the
learning has gone in both directions.
The acquisition of Gränges Konin contributed significantly to
volume and profit already during 2021. Looking ahead, we’re
certain that this latest addition to our Group creates large oppor-
tunities to grow our European market share and increase produc-
tivity for many years to come.
Investment for the future
During the year, we have continued our very ambitious investment
in capacity, operational improvement and future growth.
To meet the continuously increasing demand from North Ameri-
can customers, we decided to invest USD 33 million in a new recy-
cling and casting centre. The project is progressing well. When
complete, it will improve our productivity and capacity utilization,
reduce our carbon footprint, and lower our cost. And we have soon
fully recovered from the unfortunate mill fire before the summer,
giving increased rolling capacity from 2022 and on.
Gränges Finspång completed an important milestone in its on -
going capacity expansion and logistics improvement programme by
successfully rolling the first coil in the new mill, and the automated
logistics solution already shows good promise. The programme will
significantly improve production flow, reduce cost and improve our
environmental footprint. The large expansion programme in Konin
is nearing its completion, and both the new recycling and casting
centre and rolling mill are ramping up as planned. Together, these
two programmes will increase our total capacity in Europe by
almost 30 per cent with full effect from 2023.
“In sustainability, we made good progress
against our very ambitious targets. We also kept
investing in capacity, operational improvement,
and future growth.”
Jörgen Rosengren, President and CEO
3 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Even more important for the future are the large efforts to
develop customer relations, technology, and manufacturing
capabilities for the fast-growing market for electric vehicles and
batteries. The first commercial deliveries to battery customers
are taking place in 2022, albeit at low volumes. It is encouraging
to see a very strong interest from global customers in our capa-
bilities in this area. These investments help build a solid platform
for future growth.
A strong commitment to sustainability
Sustainability is a strong driver and enabler of Gränges’ long-term
competitiveness and value creation. We are committed to devel-
oping lighter, smarter, and more sustainable aluminium products
and solutions to our customers. Since 2016 we are a signatory to
and support the principles of the UN Global Compact and we are
also committed to helping fulfil the 2030 Agenda and Sustainable
Development Goals.
We made good progress against ambitious targets in 2021.
In fact, we even upgraded the targets during the year to reflect
a stronger sustainability performance than anticipated. We also
want to meet the increased interest and expectations from cus-
tomers and other stakeholders. Highlights of our sustainability
work during the year include reducing our total carbon emissions,
increasing our aluminium recycling, emitting our first Sustain-
ability-Linked Bond, and having more products with third-party
verified sustainability information.
I’m also very proud that Gränges achieved a Platinum rating from
the independent sustainability rating company EcoVadis, which
placed us among the leading 1 per cent of companies assessed
globally in our industry. Further, Gränges Finspång achieved
Gränges’ first certification against the Aluminium Stewardship
Initiative (ASI) Chain of Custody Standard, closely followed by
Gränges Shanghai in the beginning of 2022. This means that we
can now offer customers verified sustainability credentials
demonstrating that our products are responsibly sourced and
produced. We write about these actions and many more in more
detail in the sustainability section of this report.
Volume and margin pressure required fast action
The financial performance during the second half of 2021 was not
satisfactory. There were two main reasons for this: a sharp decline
of automotive volume, and dramatic cost increases in energy,
freight, alloying elements and other items. Our focus during the
end of 2021 was therefore on securing volumes, price increases
and cost productivity. These activities were largely successful:
we have found volumes in new segments, and we have agreed with
most customers on significant price increases and surcharges.
We hope that by these actions we can secure a good start to 2022.
“The large investments made in the last few years are now beginning to
bear fruit and will contribute fully from 2023. The timing is good, as the
market outlook especially in the Americas and in Europe is favorable.”
Jörgen Rosengren, President and CEO
A growth plan in the making
In parallel, we have also started to develop plans for the future.
The large investments made in the last few years are now begin-
ning
to bear fruit and will contribute fully from 2023. The timing
is good, as the market outlook especially in the Americas and in
Europe is favorable. Gränges also has a global footprint, strong
technical capabilities, solid long-term customer relations, indus-
try leading sustainability performance, and a strong team. That
puts us in an excellent position to take advantage of three domi-
nant trends in our industry: the regionalization of supply chains,
the electric vehicle revolution, and customer demands for more
sustainable solutions.
We are committed to making 2022 a year of growth and improved
profitability. We will also present a new plan for Gränges. In it,
we’re planning to use our strengths and the promising market
trends to restore our return on capital employed to its target range
of 15–20 per cent. We’re planning for profitable and sustainable
growth. And we intend to build an even stronger and more sustain-
able company for the future.
I would like to take this opportunity to thank all of my 2,600
colleagues for an outstanding effort in 2021.
Jörgen Rosengren
President and CEO
4 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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ABOUT GRÄNGES
With customized product development, production capacity, sales
offices and technical support globally, Gränges provides a solid
platform to meet customers’ complex needs and new trends in an
efficient and sustainable way. This also creates the foundation for
Gränges’ continued expansion.
Gränges develops new products, materials, and solutions in
close cooperation with its customers. Gränges’ product develop-
ers and technicians offer advanced technical support and a wide
range of services to customers to optimize the interaction between
Gränges’ products and the customers’ machinery, processes and
applications. Gränges’ validation capabilities enhance customers’
competitiveness by saving time and cost for new product develop-
ment and market introduction.
Materials and technology leadership
Gränges develops and produces advanced materials that enhance
the efficiency in the customer’s manufacturing processes, as well
as the performance of their products. Gränges offers rolled alumin-
ium products for thermal management systems, speciality packag-
ing and other niche markets, and offers a comprehensive range of
clad and unclad rolled aluminium products used for applications
with a high degree of functionality and performance.
Depending on the specific needs of a given application, Gränges
chooses the right alloys, manufacturing parameters and layering
for each product. This variety provides virtually unlimited possibil-
ities for customized solutions based on carefully selected alloy
combinations, delivery conditions, cladding thickness and geome-
tries. Leading-edge technology and true industrial craftsmanship
ensure materials with consistent quality.
This is Gränges
Gränges is an aluminium technology company that drives the development of lighter, smarter, and more
sustainable aluminium products and solutions. The company oers advanced materials that enhance eciency
in the customers’ manufacturing process and the performance of the final products. Gränges’ innovative
engineering has transformed the industry for more than 125 years, and the company holds leading positions
in rolled products for thermal management systems, speciality packaging and selected niche applications.
Gränges Americas
Production technology
• Continuous casting
• Cold rolling
Key end-markets
1)
• HVAC
2)
(41%)
• Speciality packaging (26%)
Gränges Eurasia
Production technology
• Direct chill casting
+ hot rolling
• Cold rolling
• Gas atomization
3)
• Spray forming
3)
Key end-markets
1)
• Automotive (64%)
• Other niches (27%)
1)
Percentage refers to end-customer market share of total business area
sales volume 2021.
2) HVAC = Heating, Ventilation and Air Conditioning system including heat
exchangers.
3) Production technology at Gränges Powder Metallurgy’s plant in
Saint-Avold, France.
>> A NEW BUSINESS AREA STRUCTURE
Sustainability and resource efficiency
Sustainability is a part of Gränges’ core business and strategy and
is integrated across the operations through a structured approach
and framework. Gränges has a strong commitment to minimize
the environmental impact of its operations, uphold ethical busi-
ness practices, and provide a safe and good working environment.
The strategic priority is to develop sustainable aluminium prod-
ucts and solutions which have a low carbon impact, are circular
and resource-efficient and are responsibly sourced and produced.
Two new business areas
Following recent years’ larger production footprint and a more
diverse product portfolio, Gränges decided to further increase
efficiency and transparency by grouping the different businesses
based on production technology and end-customer markets. As of
2021 Gränges is grouped into two business areas: Gränges Eurasia
and Gränges Americas.
Gränges 2021 in numbers
• Sales volume 489 ktonnes
• Net sales SEK 18 billion
• Employees 2,600
• Total annual production capacity 570 ktonnes
• Adjusted operating profit SEK 1,008 million
5 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Franklin
Salisbury
Newport
Huntingdon
Finspång
Shanghai
Seoul
Stockholm
(Head oce)
Velbert
Saint-Avold
Konin
Tokyo
Pune
GLOBAL PRESENCE
Asia Pacific
Gränges has a leading position in rolled
products for brazed aluminium heat
exchangers in Asia Pacific. China is the main
market and other key markets include India,
Thailand, South Korea and Japan. In 2021, the auto-
motive business accounted for 85 per cent (86)
of Gränges’ sales in Asia Pacific.
Europe
Gränges has a strong position in rolled products for brazed alu-
minium heat exchangers in Europe. The Czech Republic, Sweden,
Germany and Poland are the largest markets. In 2021, the auto-
motive business accounted for 51 per cent (74) of Gränges’ sales
in Europe. The acquisition of Gränges Konin in 2020 has created
a significantly larger and more diversified presence for Gränges
in Europe, and reduced dependency on the automotive market
and global accounts.
North and South America
Gränges has a leading position in rolled aluminium products for
HVAC and is the second largest supplier of rolled aluminium for
brazed heat exchangers to the automotive industry. The company
also has leading positions in niche markets such as transformers
and food packaging. Main markets are the US and Mexico. In 2021,
HVAC & other business accounted for 80 per cent (81) of Gränges’
sales in North and South America, and the automotive business
accounted for 20 per cent (19).
Sales markets
Sales oces and technical support
Production sites
Research and innovation centres
Gränges has production facilities
and conducts sales in three regions:
Asia Pacific, Europe, North and
South America.
North and
South America, 54%
Asia Pacific, 17%
Europe, 29%
Sales volume per region
6 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Gränges’ products are used inside some of the world’s most demanding applications.
The properties of the products, such as for example low weight and recyclability,
support the transition to a more sustainable economy.
Gränges’ product areas
HVAC
Heat exchangers
• Evaporators
• Condensers
• Radiators
• Microchannel heat
exchangers
OTHER NICHES
Wind turbines
• Oil coolers
Transformers
• Conductor strip
• Cable wrap
AUTOMOTIVE
Heat exchangers
• Radiators
• Low temperature radiators
• Heaters
• Condensers
• Evaporators
• Oil coolers
• Chillers
SPECIALITY PACKAGING
• Converter foil
• Pharmaceutical foil
• Confectionery foil
• Lidding foil
• Closures (food and beverages)
• Containers (food)
• Charge-Air-Coolers
• Battery cooling plates
• Electronics cooling plates
• Battery cathode foil
Other
• Structural applications
• Heat shields
Copyright © Volvo Car Corporation
7 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Business model
Strong customer relationships
Gränges’ long-term customer relationships are characterized by
customer-driven development and close collaboration, with a
strong focus to meet the customers’ needs for reliable, sustainable
and high-quality products. Business relationships are typically
long-term, and a majority of the customers have been with
Gränges for more than ten years.
Strong experience and expertise
Gränges’ many years of specialization in developing and manufac-
turing advanced rolled aluminium products have resulted in
significant experience and expertise in material characteristics
and manufacturing processes. The company collaborates globally
to share best practice, valuable knowledge, and experience.
A strong commitment to sustainability
By managing its business in a sustainable and responsible way,
Gränges works to strengthen its long-term competitiveness and
create financial and operational value throughout the life-cycle of
aluminium. Sustainable business value is achieved by integrating
sustainability into the company’s core business and strategy.
Technical leadership
Innovation is a part of Gränges' core business and strategy and is
integrated across the operations. Gränges’ advanced aluminium
products are the result of a long-term commitment to research
and innovation as well as close collaboration with customers.
Gränges has world-leading expertise in metallurgy and under-
standing of the production process, particularly in the develop-
ment of alloys, hot rolling of clad materials, thermo- mechanical
processing, and slitting. Product developers and engineers work
closely with customers to optimize the interface between the
materials and the customers’ production processes.
Specialized and lean manufacturing
Gränges’ production facilities are optimized according to lean
principles. Production is demand-driven, and the company
emphasizes continuous improvement to increase productivity,
process stability and efficiency, while reducing operational waste.
Gränges’ own concept for lean manufacturing, Gränges Produc-
tion System (GPS), is implemented in all production plants.
Proven revenue model
Gränges generates revenue by selling advanced materials manu-
factured for specific customers and applications under long-term
contracts. Pricing is based on the added value that Gränges pro-
vides in terms of material properties and product complexity. The
cost of aluminium, which is the primary input material, is passed
on to customers. If there is a time lapse between the price terms
for purchased and sold aluminium, Gränges applies financial
hedging to minimize the impact on the result from the raw mate-
rial component.
Gränges supports its customers with research and innovation, product development and technical support
throughout the product’s life-cycle. Material properties and design, which are Gränges’ core competences,
contribute to the eciency and sustainability performance of customers’ products and processes.
>> ALUMINIUM – THE GREEN METAL
• Light and strong
• Energy saving and infinitely recyclable
• Corrosion resistant and durable
• Versatile and can be used in dierent applications
• Impermeable to light and odours
Aluminium’s unique properties support the transition
towards a circular and sustainable economy. Gränges
works to leverage these unique properties to design
and manufacture sustainable products which have a
low-carbon impact, are circular and resource-
ecient
and are responsibly sourced and produced.
This can improve customers’ and end-users’ sustain-
ability performance from both an operational and
product perspective. The company’s products are for
example used to produce lightweight vehicles, ener-
gy-ecient buildings and resource-ecient packag-
ing which are all vital applications for the future.
8 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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PRIMARY ALUMINIUM PRODUCTION
Extraction, refining and smelting of primary aluminium:
Bauxite is extracted from mines and refined into pure
aluminium oxide, called alumina. Molten aluminium is
extracted from the alumina through an electrolytic pro-
cess called smelting. Gränges sources primary aluminium
through commodity traders and directly from smelters.
SEMI-FABRICATION
Re-melting and casting, rolling and slitting:
Gränges creates customized alloys by adding other
metals to the molten aluminium in a re-melting process.
The molten alloys are solidified into slabs in a casting
process, and the alloyed slabs are transformed into
coils and sheets in the rolling and slitting process.
Read more about the production process on page 23.
PRODUCT MANUFACTURING
Customers use the coils and sheets sourced from
Gränges to produce a range of products for improved
eciency and sustainability performance in dierent
applications, including automotive heat exchangers,
HVAC and speciality packaging.
PRODUCT USE
End-users use the applications containing Gränges’
materials. Key uses include vehicles, systems for heating,
ventilation and air-conditioning in buildings, speciality
packaging, as well as aluminium foil in food packaging.
Supply chainGränges’ operations
Customers and end-users
A strong position in the value chain
PRIMARY
ALUMINIUM
PRODUCTION
SEMI-FABRICATION
PRODUCT
MANUFACTURING
PRODUCT USE
ALUMINIUM
RECYCLING
Flat rolled aluminium coils for
automotive heat exchangers,
HVAC, speciality packaging, etc.
Gränges strives to be a positive contributor to the circular economy and is committed to improve the overall footprint of
the aluminium value chain. Collaboration and partnerships are important to resolve the global environmental challenges,
drive change where it has the highest impact and create value for the company’s stakeholders. Gränges therefore
participates actively in dierent industry forums and also collaborates with suppliers, customers and other business
partners to identify and capture opportunities to improve the footprint along the value chain.
ALUMINIUM RECYCLING
Collecting, sorting and recycling
of aluminium: Aluminium scrap is
collected and sorted. Ecient systems
are critical to help retain the value of
the alloy elements in the loop. Gränges
sources aluminium scrap from customers
and recycling companies and strives to
recirculate all scrap from its own
production process. Scrap from products
aer usage (end-of-life) is also sourced, which
is a clear positive contributor to a circular
aluminium value chain.
Internal
pre-consumer
scrap
External pre-
consumer scrap
Post-consumer
(EOL) scrap
9 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Opportunities and risks
• Increased growth for aluminium driven by
a global focus on a sustainable development.
• Reduced climate impact from raw materials
and supply chains are key to decarboniza-
tion.
• Increased focus on responsible supply
chains and traceability to verify
sustain ability claims.
• Increased demand for recycling and
circular business models.
• Sustainability is a key criteria for invest-
ments, financing, purchasing, and product
development.
Gränges’ actions
• Develop and commercialize sustainable
aluminium products and solutions.
• Maximize the sourcing of aluminium scrap
and low-carbon primary aluminium.
• Increase energy eciency and use of
re newable energy in own operations.
• Increase collaboration in the value chain,
both up- and downstream.
• Ensure responsible and sustainable sourcing.
Global trends
There are several global trends that impact Gränges' business. Gränges aims to capture the
business opportunities created by these trends to generate sustainable profitable growth,
manage risks and further strenghten the company's sustainability impact.
The sustainability landscape is evolving rapidly where decarbonization and
circular business models are key to a sustainable economy. It will require a
transition to more sustainable energy sources, new material technologies and
an increased degree of recycling. Sustainable materials which can improve
resource eciency are a key enabler of sustainable development.
Electrification is currently the most important trend impacting the transportation industry.
It is reshaping supply chains, vehicle designs and the automotive companies themselves. The
electrification is driven by the acknowledgement of the environmental benefits of electric
vehicles. Increasing demand for electric vehicle batteries drives demand for rolled aluminium
for lithium-ion battery cathode foil and casing. Moreover, thermal management of batteries
and other components is critical for the reliability and safety of electric vehicles, which is a
condition for acceptance by consumers.
Opportunities and risks
• Increased development of products and
applications for electrified transportation
solutions.
• Increased demand for batteries and rolled
aluminium used as battery cathode foil and
battery casing.
• Continued demand for light weighting of the
car body and structure.
• New value chains and players in the auto-
motive industry.
Gränges’ actions
• Strengthen capabilities to leverage the
technology shi and capture opportunities
from electrification of transportation.
• Leverage competence in the heat exchanger
value chain to strengthen and build new
business in the thermal management market.
• Leverage Gränges’ research and innovation
competence to create new business oppor-
tunities.
• Extend and broaden collaborations and
develop new types of partnerships.
Electrification
of transportation
Recource eciency
and sustainability
10 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Digitalization
and automation
Macro factors such as cyclical market conditions, trade policy and emission regula-
tions influence global companies such as Gränges. Presently the dominating megatrend
is the ongoing regionalization of supply chains, driven by trade regulations, demand for
more resilient and shorter supply chains, as well as sustainability. Regionalization is
having a direct impact on the competitive position of Gränges in the dierent markets.
Opportunities and risks
• Optimization of supply chain through
global presence in dierent regions.
• Economic and political development is
requiring stronger partnerships with
customers.
• Change in market conditions.
Gränges’ actions
• Leverage Gränges' global presence and
decentralized business ownership to meet
increasing regional demand, especially in
Europe and North America.
• Broaden sustainable product oerings and
solutions.
• Enter new niche markets and optimize
allocation of current capacities in dierent
regions.
• Develop and create new business in thermal
management, electrified transportation,
new rolled products niches, and new
materials technology.
• Further develop medium to long-term plan
for capacity and capabilities to align with
future market conditions.
Opportunities and risks
• Enables more ecient operations, product
development and integrated supply chains.
• Enables new ways of interacting with
customers and other stakeholders.
• New value adding services as well as
dierentiation.
• Cyber threats are increasing rapidly.
The digital transformation has an impact on all parts of the value chain. The trans-
formation enables more ecient operations, faster development cycles, optimized
inventories, strengthened customer relationships and better use of resources.
It also changes the way companies go to market and interact with customers.
Gränges’ actions
• Upgrade and integrate IT-infrastructure
and plant equipment to enable smart
manufacturing and improved productivity.
• Apply advanced data analytics to optimize
for example production, sustainability and
quality.
• Ensure sharing of best practices and
valuable know-how across the
organization.
• Focus on cyber security as one of
Gränges’ top priority areas within
digitalization.
Economic and
political development
11 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Markets
Gränges is a leading global supplier of rolled aluminium products for thermal management systems,
speciality packaging and selected niche applications. In materials for brazed heat exchangers,
Gränges is the global leader with a market share of approximately 20 per cent.
Market characteristics
The market for rolled aluminium materials is characterized by
advanced technology, complex production processes, and
customer-driven development with long-term relationships.
Advanced technology and production processes
The market for rolled aluminium materials is relatively difficult to
enter. This is partly due to the capital-intensive nature of the industry
and the high level of competence and experience required to develop
and produce new and customized materials. These skills are also
critical to operate flexible and efficient production processes, and to
be able to guarantee a high degree of delivery performance in terms
of volume, time and quality. All this requires well-tuned manu-
facturing capabilities and processes refined over a long time, as
well as effective customer service and a global supply capacity.
Customer-driven development
Manufacturers are constantly facing new and increased demands
from customers for materials with lower weight, greater strength,
higher corrosion resistance and lower environmental impact. The
development of new materials, products and solutions is conducted
in close cooperation with customers, based on long-term relation-
ships. A core challenge is to meet the requirements of new applica-
tions and demands of end-customers, as well as trends that impact
the business. Gränges strives to be at the forefront of developing
adaptable and customized aluminium materials.
Competitors
The competition varies in size and strategic focus and differs
between regions and end-user markets. Competitors are primarily
major global aluminium companies such as Arconic, Novelis and
UACJ. In addition to the large global competitors there are local
competitors in the different regions.
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1) HVAC = Heating, Ventilation and Air Conditioning system including heat exchangers.
2) Source: IHS, January, 2022.
3) Source: AHRI, December, 2021.
END-CUSTOMER MARKETS
Gränges’ end-customers are found in the automotive, HVAC
1)
, and
speciality packaging industries as well as in other niche markets
such as transformers and wind turbines.
The automotive industry
The automotive industry includes all types of vehicles, from light
to heavy vehicles and both combustion engine, hybrid electric and
pure electric. Light vehicle production is an important driver of
Gränges’ sales of heat exchanger materials. An increasing share
of hybrid and electric vehicles is expected to further increase the
demand for Gränges’ heat exchanger materials.
As aluminium has multiple properties that are in demand in the
electric vehicle market (such as low weight), the demand for new
types of aluminium products, such as battery cathode foil, battery
casing and battery cooling plates, is expected to increase. This
provides good opportunities for Gränges to deliver new products
to a growing end-customer market in addition to the company’s
traditional products for heat exchanger applications. Gränges holds
a leading position in rolled aluminium materials for brazed heat
exchangers with an estimated global market share in the automo-
tive industry of around 20 per cent.
According to the international research firm IHS
2)
, global light
vehicle production showed a modest growth during 2021. The
recovery from the COVID-19 pandemic in the first half of the year was
offset by supply shortage of semiconductors in the second half of
the year.
The HVAC industry
The HVAC industry includes systems for heating, ventilation and
air conditioning in homes, commercial buildings and industrial
properties. Market growth is driven by consumer confidence,
the general activity within building and construction and energy
efficiency requirements. Demand for reduced energy consump-
tion, recyclability and restrictions on coolants is driving improved
design of HVAC products resulting in increased demand for
Gränges’ materials, in particular as a replacement for copper-
based solutions. Gränges delivers materials for both brazed and
mechanically assembled aluminium heat exchangers.
North America is Gränges’ most important HVAC market and
Gränges holds a leading position in this market. US shipments of
HVAC units is a key driver of Gränges’ sales. According to the North
American trade association AHRI
3)
, US shipments of HVAC units
increased by nine per cent in 2021.
Speciality packaging
Gränges is a major supplier of aluminium foil for food packaging in
North America and has a range of products within packaging for
the European market. One example is bottle closures, which are
made of aluminium sheets and used in the food and beverage
industries.
Aluminium foil provides a complete barrier to light, oxygen,
moisture and bacteria, making it ideal for packaging. Aluminium
packaging is extremely versatile and can be used in a wide range of
different applications for the food, beverage and pharmaceutical
industries. Container foil is divided into three major categories:
household foil, semi-rigid containers and flexible packaging. For
decades, the use of foil has grown steadily in each of these categories
and the demand for Gränges’ materials is increasing, especially in
North America. Semi-rigid containers are among the most flexible
of all types of packaging and are widely used for pre-packaged
foods, easily withstanding great differences in temperature from
freezing to heating. In addition, a key benefit is that aluminium
packaging materials can be recycled and reused an infinite number
of times.
Other markets
Examples of other markets that Gränges supplies to are trans-
formers, heat exchangers for industrial applications, wind
turbines and coil and sheet for general engineering applications.
Gränges is a major supplier of winding material for transformers
in North America, where aluminium plays an important role in the
design of electricity networks and large power transformers thanks
to its significant cost and weight advantages compared with copper.
The business unit Gränges Powder Metallurgy creates opportuni-
ties for growth in new materials technology in the fast-growing
market for powder materials and additive manufacturing.
Total sales volume 489 ktonnes.
Sales volume per end-customer market, 2021
Automotive, 40%
Speciality
packaging, 17%
HVAC, 22%
Other niches, 21%
13 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Gränges Eurasia
Gränges Eurasia is the market leader in heat exchanger material for the automotive industry, but also holds
leading positions in speciality packaging and other niches. The business area includes three production
facilities with direct chill casting and hot rolling technology in Finspång (Sweden), Konin (Poland) and
Shanghai (China), as well as Gränges Powder Metallurgy’s facility in Saint-Avold (France).
Market and sales
Gränges Eurasia experienced a strong market recovery in 2021
compared to the previous year, which was highly impacted by the
COVID-19 pandemic. The first half of the year showed a significant
year-over-year growth while the growth in the second half was
significantly reduced by the semiconductor shortage which
impacted vehicle production negatively. Sales volume increased
by 71 per cent to 263.5 ktonnes (154.0) and net sales increased by
92 per cent to SEK 9,648 million (5,037).
Excluding the acquired sales from Gränges Konin, the 2021
sales volume increased by 23 per cent and the net sales by
43 per cent. The organic net sales growth was primarily driven by
market recovery and higher metal prices.
Operating profit
The adjusted operating profit for 2021 increased to SEK 446 million
(176), corresponding to an adjusted operating profit per tonne of
1.7 kSEK (1.1). The increase was partly driven by acquired operat-
ing profit from Gränges Konin of SEK 156 million. Positive effects
from increased sales volume and improved operating costs were
offset by a dramatically increased inflationary pressure on energy
and freight costs as well as alloying metals and other input costs,
not fully offset by price increases to customers.
Gränges Konin contributes
Gränges Konin, which was acquired in November 2020, has
already started to contribute significantly to sales volume and
profit. Gränges Konin complements the business focus and
geographic presence of the other European operations very well.
It has technically advanced operations with a very good cost posi-
tion, strategically located in Central Europe.
During 2021, Gränges Konin worked very well together with the
rest of Gränges Europe and achieved good results in areas such
as safety, sourcing, sales and marketing. The Gränges Production
System was introduced in Gränges Konin and focus throughout
the year has been on de-bottlenecking key equipment as well as
on improving yield and productivity. Gränges Finspång also bene-
fited from the technical and market know-how of the Gränges
Konin team. During 2022, this cooperation across Gränges will be
intensified under the leadership of a joint European leadership
team.
Regionalization of global supply chains
creates opportunities in Europe
Gränges Europe has a strong, technically advanced and diversified
customer and manufacturing platform, with a good position on
important sustainability metrics. During 2021, Gränges observed
a trend toward regionalization of the global supply chains of its
customers, causing increased demand for Gränges' production
in Europe. This trend, which in turn is driven by sustainability,
global freight congestion, and trade limitations, is a very large
opportunity for Gränges Europe going forward.
Large investment programmes progressing well
During 2021, the large ongoing investment programmes in
Gränges Konin and Gränges Finspång progressed well. In Konin,
the programme aims at adding 40 ktonnes of capacity, and also
important technical capabilities. During the fourth quarter, both
the new recycling, remelting and casting centre as well as the new
cold-rolling mill made their first products. During 2022, ramp-up
and optimization will continue, which creates opportunities to
increase sales and gain market share.
>> PERFORMANCE SUMMARY
Financial summary, SEK million 2021 2020 Change
Sales volume external, ktonnes 236.6 131.5 80%
Sales volume internal, ktonnes 26.9 22.5 20%
Total volume 263.5 154.0 71%
Total revenue external 8,627 4,262 102%
Total revenue internal 1,021 775 32%
Total net sales 9,648 5,037 92%
Adjusted operating profit 446 176 154%
Operating profit 280 121 132%
Adjusted operating margin,% 4.6 3.5 1.1 p pt
Adjusted operating profit
per tonne, kSEK 1.7 1.1 48%
Return on capital employed, % 6.8 4.6 2.2 ppt
Sustainability summary
1)
2021 2020 Change
Total Recordable Rate
2)
6.2 4.8 1.4
Carbon emissions intensity
(scope 1+2), tonnes CO
2
e/tonne 0.86 0.55 56%
Carbon emissions intensity (scope 3),
tonnes CO
2
e/tonne 10.4 14.0 –26%
Sourced aluminium scrap, % 20.0 6.9 13.1 ppt
1) 2020 excludes Gränges Konin and Gränges Powder Metallurgy.
2) Number of recordable accidents per million hours worked. Read more on page 130.
14 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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In Finspång, the first phase of the logistics project was accom-
plished during the fourth quarter. When completed this will increase
the rolling capacity by 20 ktonnes with reduced production cost
and improved environmental footprint. The programme continues
during 2022 and 2023.
Volatile market demand and inflationary pressures
During the first half of 2021, Gränges Eurasia experienced good
growth and improved margins. In the second half of the year,
however, demand from the automotive market fell sharply, while
simultaneously costs for freight, energy and alloying metals rose
dramatically due to the surge of general global demand. Gränges
Eurasia is reacting to this volatility with price increases to cus-
tomers, pursuing more volumes outside the automotive markets,
and improvements in mix and cost. These efforts will continue into
2022.
Pursuing growth opportunities related to
electric vehicles and battery technology
In 2021, Gränges made its first investment in production of battery
cathode foil in Finspång and Shanghai. The explosive growth of
battery manufacturing creates exciting new growth opportunities
for Gränges, not only in battery foil but also in other components
such as battery casings and thermal management systems.
Gränges experiences strong interest from regional and global
battery manufacturers. During 2021, Gränges concentrated
efforts on sales, innovation, and production in this area, and
intends to further expand these activities in 2022. The electri-
fication of vehicles also presents other interesting growth oppor-
tunities in Gränges' thermal management business.
Towards the 2025 sustainability targets
In 2021, Gränges expanded the use of its internal life-cycle and
carbon footprint assessment tool to Gränges Finspång and
Gränges Shanghai. These businesses can now offer customers
verified sustainability information on a product level. Moreover,
the production sites continued to expand its aluminium recycling
resulting in a reduced carbon intensity from sourced metal inputs
(scope 3). Compared with baseline 2017, the carbon intensity
reduction amounted to 20 per cent for Finspång, 3 per cent for
Konin and 10 per cent for Shanghai.
Further, Gränges Finspång achieved Gränges' first certification
against the Aluminium Stewardship (ASI) Chain of Custody cert-
ification during the year, followed by Gränges Shanghai in January
2022. Konin is planning to prepare for ASI certifications in 2022.
Read more in the sustainability section on pages 29–43.
Ongoing investments
• Logistics improvement project, Finspång.
• Capabilities for battery foil, Finspång and Shanghai.
• Capacity expansion, Konin.
Read more on pages 25–26.
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Gränges Americas
Market and sales
Gränges Americas experienced a strong market recovery in 2021.
The underlying demand for HVAC products, other niche products
and speciality packaging increased during the year. Demand from
automotive was strong in the first half of the year but slowed down
in the second half due to supply chain issues driven by the semi-
conductor shortage. In part, the growth in 2021 was attributed to
maximizing capacity investments in the Huntingdon facility as
well as enjoying a full year of production within the Salisbury facil-
ity which was temporarily idled in 2020 due to the COVID-19 pan-
demic. All three plants exceeded previous year’s sales volume,
despite a setback due to a cold rolling mill fire in Newport in the
second quarter. In total, sales volume in 2021 increased by 15 per
cent to 252.4 ktonnes (219.1) and net sales increased by 41 per
cent to SEK 9,488 million (6,748), both constituting a record for a
calendar year.
Record operating profit
The adjusted operating profit for 2021 increased by 30 per cent
to SEK 655 million (503), corresponding to an adjusted operating
profit per tonne of 2.6 kSEK (2.3). The improvement was driven by
increased sales volume in combination with higher prices, where -
as operating costs rose due to increased inflationary pressure
and higher maintenance costs due to temporary production dis-
turbances in the third and fourth quarter. Gränges Americas
continued to optimize product mix to achieve higher prices.
The syncing of commercial and operational priorities continued
to have a positive impact on margins.
Navigating a challenging operational environment
Due to the numerous direct and indirect effects of the COVID-19
pandemic, 2021 was again a very challenging year for Gränges
Americas. Labor shortages, high employee turnover, very strong
demand, the fire in Newport and a very high inflationary environ-
ment in the second half of the year were some of the challenges
the organization was facing. Nevertheless, Gränges Americas
delivered a record year in terms of volume and operating profit,
while building an even stronger position for the future.
Well positioned for regionalized supply chains
During the past years, Gränges Americas has invested heavily to
modernize its production facilities and to expand capacity and
capabilities. These programmes continue and will ensure that
Gränges Americas maintains its leading position with capable and
efficient plants. The demand for Gränges' products during 2021
was nevertheless higher than available capacity. The high demand
was partly due to pandemic recovery, but also driven by custom-
ers regionalizing global supply chains to mitigate risk and avoid
import tariffs. This trend is expected to continue into 2022 and
beyond. Gränges, with its global production footprint, is well posi-
tioned to benefit from increased regionalization.
Newport fire
In May 2021, there was a fire which caused severe damage to one
of the three cold rolling mills in the Newport facility. Despite this,
Newport increased sales volume by 10 per cent versus 2020. The
estimate is that the damaged mill will be out of production for
Gränges Americas is the leading provider of rolled aluminium products for the HVAC
1)
industry and the second largest supplier of rolled
aluminium for brazed heat exchangers to the automotive industry in North America. It also has leading positions in niche markets such as
transformers and food packaging. Gränges Americas possesses some of the most modern and ecient rolling mills in the US, located in
Huntingdon, Salisbury, and Newport. Operations are based on continuous casting technology, cold rolling and finishing. Gränges Americas
also serves as a distributor of heat exchanger material for the automotive industry from Gränges Eurasia on the North and South American market.
>> PERFORMANCE SUMMARY
Financial summary, SEK million 2021 2020 Change
Sales volume external, ktonnes 252.4 219.1 15%
Sales volume internal, ktonnes – – –
Total volume 252.4 219.1 15%
Total revenue external 9,502 6,725 41%
Total revenue internal –14 24 n/a
Total net sales 9,488 6,748 41%
Adjusted operating profit 655 503 30%
Operating profit 691 498 39%
Adjusted operating margin,% 6.9 7. 5 –0.6 ppt
Adjusted operating profit
per tonne, kSEK 2.6 2.3 13%
Return on capital employed, % 16.9 11.8 5.1 ppt
Sustainability summary 2021 2020 Change
Total Recordable Rate
1)
7. 3 6.3 1.0
Carbon emissions intensity
(scope 1+2), tonnes CO
2
e/tonne 0.90 1.03 –13%
Carbon emissions intensity (scope 3),
tonnes CO
2
e/tonne 6.1 6.4 –5%
Sourced aluminium scrap, % 39.0 35.2 3.8 ppt
1) HVAC = Heating, Ventilation and Air Conditioning system including heat exchangers.
1) Number of recordable accidents per million hours worked. Read more on page 130.
16 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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about nine to twelve months, and it is expected to be operational
again in the second quarter of 2022. The cost as well as the profit
impact of the lost volume will be covered by insurance.
Since that event, Gränges Americas has worked diligently with
internal and external resources to strengthen its fire protection
programs across all three facilities. Read more about Gränges'
work with fire protection on page 49.
Towards the 2025 sustainability targets
In 2021, Gränges Americas expanded the sourcing and use of alu-
minium scrap, both in collaboration with recycling companies and
through closed-loop customer programmes where Gränges takes
back used materials from customers’ manufacturing processes.
The volume of sourced aluminium scrap reached 91,7 ktonnes or
39 per cent of total sourced metal inputs. This led to a reduced
carbon intensity from sourced metal inputs (scope 3), by 5 per
cent versus 2020 and 25 per cent versus baseline 2017. Gränges
Americas also continued its sustainability certification programme
where the site in Salisbury achieved ISO 14001 certification and
Newport was certified in accordance with the AWS International
Water Stewardship Standard. Read more in the sustainability
section on pages 29–43.
Ongoing investments
• Capacity and capability expansion in Huntingdon and Newport.
Read more on page 26.
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Strategy
PEOPLE
MAKE THE
DIFFERENCE
PURPOSE
AND
PROMISE
Business Drivers
• Sustainability
• Innovation
• Digitalization
• Continuous improvement
Gränges’ purpose is to develop lighter, smarter and more sustainable aluminium products and solutions. Four key business drivers,
together with people and culture, guide the way of working to increase Gränges’ competitiveness and realize the strategy and the
long-term business targets. Growth is a central part of Gränges’ strategy, and the aim is to strengthen and grow Gränges’ position
in core markets as well as expand into adjacent and new areas of aluminium technology, organically as well as by acquisitions.
GROWTH
AREAS
Growth areas
• New rolled products niches
• Electrified transportation
• Thermal management
• New materials technology
PURPOSE AND PROMISE
Gränges’ purpose is to develop lighter, smarter and more sustainable
aluminium products and solutions. The company’s promise is to
use expertise, flexibility and speed to deliver the needs of today
and tomorrow. Gränges strives to constantly develop and to become
more competitive when meeting the customers’ needs, as well as
to benefit society in large.
PEOPLE MAKE THE DIFFERENCE
People and culture are the foundation of Gränges’ operations. The
way Gränges’ committed employees act in their daily work makes
the difference for Gränges’ success.
BUSINESS
DRIVERS
Committed
We are committed to serving our customers
and acting responsibly towards each other
and our communities.
Action-oriented
We are action-oriented, make things happen
and continuously learn from our experiences.
Innovative
We are innovative, promote creativity and
constantly seek new and better solutions.
Accessible
We are accessible to each other, our
customers and our business partners.
>> GRÄNGES’ CORE VALUES
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BUSINESS DRIVERS LAYING THE FOUNDATION FOR GROWTH
Sustainability
Gränges has a strong commitment to develop
sustainable aluminium products and solutions
characterized by having a low-carbon impact,
being circular and resource-efficient and
responsibly sourced and produced. Gränges
aims to integrate sustainability across the
business and value chain. The company has
a structured sustainability framework with
clear sustainability targets and accompany-
ing action plans to 2025, which will secure
long-term competitiveness and create value
for Gränges and its stakeholders. Read more
on pages 29–43.
Achievements 2021
1)
• Reduced total carbon emissions intensity
(scope 1+2+3) by 4 per cent. Scope 1+2
intensity was reduced by 11 per cent and
scope 3 by 3 per cent.
• Increased the share of products with
third-party verified sustainability info r-
mation available to 43 per cent.
• Increased the share of sourced aluminium
scrap by 2.5 percentage points.
• Reached 100 per cent participation in the
group-wide anti-corruption and Code of
Conduct trainings.
Innovation
Innovation is a key strategic enabler to
achieve profitable growth, to defend com-
petitiveness of current business as well as
to develop new business. Priorities to drive
the business are to enhance the innovative
and entrepreneurial spirit within Gränges.
Read more on pages 21–22.
Achievements 2021
• Increased the number of new patents
granted by 26.
• Validated high-performance aluminium
powder for additive manufacturing.
• Developed battery casing and cathode foil
materials for customers in the battery
industry.
Digitalization
Gränges has a strong commitment to using
digital technologies to create customer value
and sustainable business growth.
Achievements 2021
• Built digitalization capabilities by further
developing Gränges’ digital platform to
support growth and increase efficiency
in the operations.
• Increased the use of artificial intelligence
and machine learning as well as other
technologies that resulted in process
efficiency improvements.
• Implemented new digital capabilities
within human capital management,
manu facturing and enterprise resource
planning.
• Introduced new solutions to further
improve Gränges’ cyber security and
resilience.
Continuous improvement
Continuous improvement by addressing
operational cost in a systematic way, is
a fundamental driver of competitiveness.
Gränges is committed to strengthening its
operational efficiency and driving continuous
improvement of material and energy effi-
ciency and reduce emissions, while at the
same time provide a safe and secure work-
place for Gränges’ employees. Read more on
pages 23–26.
Achievements 2021
• Increased manning productivity by
7 per cent to 20.3 tonnes per FTE
2)
.
• Decreased energy intensity by 5 per cent
driven by an increased production volume
1)
.
• Sustained the internal recycling rate at
90 per cent, on par with 2020.
• Improved the quality delivered to custom-
ers by 32 per cent expressed in accepted
claim ppm
3)
.
1) Comparisons with 2020 exclude Gränges Konin and
Gränges Powder Metallurgy.
2) FTE (Full-time equivalent).
3) Ppm (Parts Per Million) is a key figure for measuring
quality performance, expressed as the number of
defective parts per million.
Strategy
19 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
GROWTH AREAS
Growth is a central part of Gränges’ strategy. Macrotrends such
as regionalization of supply chains and electrification and major
sustainability trends such as resource efficiency and light weight-
ing all contribute to a positive effect on the demand for rolled alu-
minium. Gränges aims to capture these opportunities to strengthen
and grow the position in core markets as well as expand into adj a-
cent and new areas of aluminium technology, organically as well
as by acquisitions. Gränges’ strategy focuses on growth in core
markets as well as in four strategic growth areas.
New rolled products niches
Gränges sees growth opportunities arising from the regionali-
zation of supply chains. Gränges’ global expertise and capabilities
in aluminium rolling presents opportunities not only within the
current core product segments, but also in new product niches
utilizing the operational footprint in three regions. For example,
Gränges aims to continue to expand and diversify into adjacent
rolled products niches like speciality packaging and thin gauge
foil products.
Electrified transportation
Gränges works actively to support the green transition and the
electrification of the transportation industry creates many growth
opportunities outside of the current product portfolio. The battery
industry is projected to experience very strong growth in many
years to come, which in turn translates into high demand for rolled
aluminium for battery components. As the European and North
American supply chains for battery components are very limited,
Gränges has an opportunity to become a global supplier of high
quality aluminium materials for battery applications and will
target selected opportunities that have a good fit with its know-
how and capabilities. For example, battery cathode foil is a key
component in battery cells and Gränges made a decision to invest
initially SEK 100 million over two years to add capabilities for
commercial production of about 10 ktonnes of cathode foil in the
production sites in Shanghai and Finspång. Gränges’ facilities
also have the capabilities to produce battery casing material as
well as material for battery thermal management applications
such as battery cooling plates.
Thermal management
Aluminium thermal management applications are positively
impacted by the electrification of the transportation industry, and
the increased need for heating and cooling globally together with
more ambitious targets on energy efficiency in buildings create
opportunities within the HVAC industry. Thermal management
will therefore continue to be an important part of Gränges’ future
growth. Gränges aims to continue to expand its offer into new
end-customer markets by using the knowledge of thermal
management applications.
New materials technology
Gränges has deep know-how of aluminium technology that can
create value outside of aluminium rolling. Gränges aims to lever-
age this to expand into new materials technology. For example,
the business unit Gränges Powder Metallurgy is a platform for
growth on the market for powder materials and additive manufac-
turing. DISPAL
®
is a portfolio of high-performance spray formed
atomized aluminium materials used in, among others, satellite
applications, industrial robots and racing cars.
Strategy
20 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Innovation for profitable growth
Innovation is a key strategic enabler to achieve growth with high profitability, to defend competitiveness
of current business as well as to develop new business. Priorities to drive the business are to enhance
the innovative and entrepreneurial spirit within Gränges.
Innovation is integrated into Gränges’ core business and strategy,
and is found everywhere in the organization. The efforts are
supported by the company’s Research & Innovation (R&I) centres
around the world and by a well-developed innovation culture.
Cooperation with external parties, customers and suppliers
constitutes a growing part of innovation and is also a resource-
efficient way of working.
Gränges’ research and innovation
Gränges has R&I centres located in all regions where strategic
research and innovation as well as customer-driven product
development is conducted close to the production facilities and
the customers. Gränges’ strong product offerings are the result of
advanced knowledge of metallurgy and production processes as
well as a long-term commitment to research and innovation. The
search for and development of new technologies and new business
opportunities is done together with leading universities and
research institutes. A wide network is used to test and evaluate
new ideas and opportunities using advanced equipment available
at the R&I centres.
An example of innovation and development efforts is the co -
operation project between Gränges and the global aluminium
producer Rusal on aluminium alloys containing scandium, which
was announced in May 2021.
Electrified transportation
The transformation of the transportation industry towards electric
drivetrain is evolving rapidly. Battery related products such as
battery cooling plates, battery cell casings and cathode foil are
key applications for Gränges to capture growth opportunities.
To stay ahead in the ongoing transformation, new materials for
next generation batteries are also under development.
The total number of granted
patents by 31 December 2021.
226
21 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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>> RESEARCH & INNOVATION CENTRES
Gränges’ R&I organization engages around 70 highly
educated employees worldwide, including metallurgists,
chemists, metallographers, physicists, mechanical
engineers and technicians.
Finspång, Sweden
Materials and solutions for brazed heat exchangers
and battery applications.
Huntingdon, Tennessee, USA
Continuous cast materials and solutions for HVAC, speciality
packaging, battery applications and selected niche markets.
Konin, Poland
Automotive structural applications, speciality packaging,
electronics, general coil and sheet.
Shanghai, China
Materials and solutions for brazed heat exchangers,
solutions for electric vehicles, battery applications and
other new materials and applications.
Velbert, Germany
Aluminium powder and additive manufacturing.
Gränges Konin is a producer of aluminium alloy flat-rolled
products for various applications and has a strong market
position in the packaging, automotive, construction and
building industries. Gränges Konin conducts specialized
research and innovation projects for the mentioned
markets. Its R&I centre has a well-equipped laboratory
and well qualified specialists for development of new
materials. Since the acquisition, the team in Gränges
Konin cooperates with the other R&I centres in Gränges
to reach Group sustainability targets, to share know-how
and to establish new joint R&I projects.
Main R&I projects
In recent years, Gränges Konin increased the production
of sheet for the packaging and building industries and
developed new aluminium-magnesium alloys. Several
projects have been co-financed by the EU. Examples of
projects:
• Development of technology for the production of open
and closed shape profiles based on alloy entirely from
the recycling of aluminium car parts.
• Implementation of innovative technology for the produc-
tion of high magnesium containing aluminium alloy sheets
and strips designed for stamping parts of car bodies
and construction elements.
• Development and implementation of production tech-
nology for an innovative aluminium alloy for the prod-
uction of high-pressure resistant closures in the pack-
aging industry.
• Development of innovative and competitive materials
based on a high amount of recycled content.
CASE
Advanced product development
at Gränges Konin
Sustainable innovation
Sustainability, especially climate and circularity, is a key topic for
many of Gränges’ customers and an important part of the com-
pany’s product development. Gränges has developed a product
carbon footprint methodology and tool which is currently being
implemented plant by plant to enable transparent product sus-
tainability information. The tool is used both internally when
developing new alloys and processes as well as in customer
dialogues and collaborations. Read more on page 34.
Gränges collaborates with customers to design low-carbon
and circular offerings that maximize the content of pre- and post-
consumer used aluminium materials. Gränges also works actively
in developing new alloys with high shares of recycled materials.
Additive manufacturing
Additive manufacturing
1)
for aluminium alloys is growing quickly
and is transforming from prototyping to series production.
Gränges is offering a range of advanced high silicon alloys
(DISPAL
®
) produced by spray forming and extrusion and these
alloys are now step by step being qualified for Laser Powder Bed
Fusion (L-PBF), the dominating additive manufacturing method
for metals.
Patent portfolio
Patents are handled to ensure appropriate protection for Gränges’
innovations to create and maintain a valuable patent portfolio and
to ensure freedom to operate for new products. In 2021, Gränges
increased the number of new patents granted with 26. As of
31 December 2021, Gränges’ research and innovation efforts had
resulted in 66 patent families and 226 granted patents, with an
additional 40 patent applications pending.
1) Additive manufacturing (AM) is the industrial terminology for 3D printing.
22 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
>> PRODUCTION PLANTS
Finspång, Sweden
100 ktonnes
2)
.
Automotive heat exchangers, battery cathode foil,
general coil and sheet.
Konin, Poland
100 ktonnes
3)
.
Automotive heat exchangers, automotive structures,
speciality packaging, general coil and sheet.
Shanghai, China
120 ktonnes.
Automotive heat exchangers, battery cathode foil.
Huntingdon, USA
200 ktonnes.
HVAC, automotive heat exchangers, speciality packaging,
transformers.
Salisbury, USA
40 ktonnes.
HVAC, automotive heat shields.
Newport, USA
20 ktonnes
4)
.
HVAC, speciality packaging.
Gränges Powder Metallurgy,
Saint-Avold, France
3 ktonnes.
Aluminium billets and powder for additive manufacturing.
Operational excellence through
continuous improvement
Working with continuous improvement by addressing operational costs in a systematic way, is a
fundamental driver of competitiveness. Gränges is committed to strengthening its operational eciency
and enforcing continuous improvement in its operations to improve material and energy eciency and
reduce emissions, while at the same time provide a safe and secure workplace for Gränges’ employees.
Production capacity and capabilities
Gränges has six production facilities for production of rolled alu-
minium products globally, with a total annual production capacity
of 570 ktonnes. Expansion takes place through organic growth and
acquisitions. The production facilities in Finspång, Shanghai,
Huntingdon and Konin also have important centres of excellence for
research and innovation, working in close partnership with customers.
2) Planned capacity after completion of ongoing investment programme
is 120 ktonnes.
3) Planned capacity after completion of ongoing investment programme
is 140 ktonnes.
4) Only 10 ktonnes available in 2021 due to a fire in acold rolling mill.
In the manufacturing of rolled aluminium within Gränges there
are several different process steps involved – from melting and
casting to slitting and packaging. Each process step has its comp-
lexity, one example is the cladding process where one or several
clad alloys are bonded to the core via a hot rolling process.
>> MAIN STAGES IN GRÄNGES’ PRODUCTION PROCESS
1)
Hot rolling
SlittingCold rolling Packaging
Primary aluminium (slabs)
Primary aluminium (ingots)
Alloying elements
>>
>>
>>
Sourced aluminium scrap
Internal aluminium scrap
1) Main stages of the production process in the plants in Gränges Eurasia. The production process in the plants in Gränges Americas
has a different casting process with continuous casting, instead of direct chill casting, which also means hot rolling is not needed.
Direct
chill casting
Molten
metal holding
Melting
Raw
material
Production of liner plates,
cutting, cladding, assembling
23 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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In 2021, Gränges’ plant in Huntingdon implemented a digital tool with the goal to maximize the utilization of
assets leading to increased volumes at lower cost. It optimizes widths, thereby increasing metal recovery.
The tool compiles the hundreds of dierent orders received and matches similar specifications together
automatically. The algorithm decides how many coils for similar orders to produce to fulfill the order based
on certain tolerances.
Digital tool to increase metal recovery in Huntingdon
CASE
1) The 5S methodology – sort, set in order, shine, standardize, sustain – is a tool for
systematic approach for productivity, quality and safety improvement.
2) FTE (full-time equivalent).
3) Failure Modes and Effects Analysis (FMEA) is a systematic, proactive method for
evaluating a process to identify where and how it might fail and to assess the relative
impact of different failures, and to identify the parts of the process that are in most
need of change.
CONTINUOUS IMPROVEMENT IN 2021
Gränges’ production facilities are optimized according to lean
principles. Production is demand-driven, and the company
emphasizes continuous improvement to increase productivity,
process stability and efficiency, improve safety and reduce opera-
tional waste. Gränges’ own programme for lean operations,
Gränges Production System (GPS), is implemented in all production
plants. GPS increases efficiency and productivity through contin-
uous improvement and has resulted in simpler production flows
and less waste in processes.
Providing a safe work environment is a top priority for Gränges,
and the company constantly strives to improve the working envi-
ronment as well as health and safety awareness and behaviour.
Safety is integrated into GPS and a 5S system
1)
is implemented in
all production facilities to ensure a clean, orderly and safe work
environment with the objective to proactively and quickly remove
safety hazards and to drive safe behaviours. Read more about
workplace safety on page 40.
In 2021, Gränges continued to work with continuous improve-
ment in all manufacturing sites. Achievements during the year
include increased productivity by 7 per cent to 20.3 tonnes per
FTE
2)
, decreased energy intensity by 5 per cent and a sustained
internal recycling rate of 90 per cent.
Examples of improvements in Gränges’ plants in 2021
• Implemented a digital tool to increase metal recovery in
Huntingdon.
• Developed a customer margin tool for improved profitability
in Gränges Americas.
• Developed a digital tool for Failure Modes and Effects Analysis
(FMEA)
3)
in Shanghai.
• Developed a tool using artificial intelligence to reduce energy
consumption in Finspång.
24 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Reducing energy consumption using
artificial intelligence in Finspång
CASE
In Finspång, a tool using artificial intelligence was
developed and implemented to predict the energy
consumption in the facility’s two oxyfuel furnaces
where aluminium is melted through combustion using
propane and oxygen as fuel. The use of fossil fuels in
the furnaces is the largest internal contributor to car-
bon emissions and Gränges Finspång has set a target
to reduce energy consumption in these furnaces. The
tool can in the future suggest the optimal settings to the
operator to get the highest energy eciency possible.
The tool will simulate the energy consumption in each
of the two oxyfuel melting furnaces with the help of
machine learning algorithm, which was trained on his-
torical data from the melting furnaces to predict the
INVESTING TO INCREASE CAPACITY AND
DEVELOP CAPABILITIES
Growth is a central part of Gränges’ strategy. The aim is to
strengthen and grow Gränges’ position in core markets as well
as expand into adjacent and new areas of aluminium technology,
organically as well as by acquisitions.
Gränges invests to increase capacity and develop capabilities
to meet increasing demand and expand into adjacent markets.
The company has made significant expansion investments in its
production facilities during the last years, a development that
continued in 2021. Total annual production capacity has increased
from 90 ktonnes in 1999 to 570 ktonnes in 2021 (640 ktonnes after
completion of ongoing investment programs).
Expansion projects in 2021
In 2021, the ongoing capacity expansion investments progressed
according to plan.
Capacity expansion and integration in Konin
Gränges Konin is serving most end-customer markets and its wide
product offering and capabilities, coupled with a competitive cost
position, are a good foundation for volume growth. The capacity
expansion project in Gränges Konin, which was already underway
at the time for the acquisition in 2020, has progressed during
2021. It covers most parts of the production, and when completed,
Gränges Konin will have several new capabilities and 40 ktonnes
additional production capacity available for growth. In addition to
a significantly higher capacity, Gränges Konin will also strengthen
its already competitive cost position.
The integration of Gränges Konin has progressed according to
plan during 2021 and the realization of synergies is underway.
Read more on page 14.
Capacity expansion and logistics improvement in Finspång
The capacity expansion and logistics improvement project in the
Finspång facility progressed during 2021. The project was started
in 2018 to increase production capacity by 20 ktonnes to enable
continued growth in materials for automotive heat exchangers
and other niche applications, as well as improve internal logistics
and flow optimization to increase capacity, cost productivity
improvements and further reduce climate impact. In 2021, anneal-
ing, coil storage and thin strip mill were completed and are now in
operation. The project is planned to be finalized in the second half
of 2022.
energy eciency based on a few input features such as
weight, type of scrap, furnace temperatures, hatch
opening time and other sensor data. The simulation tool
is used to quantify how each parameter aects the
energy eciency. It will predict the energy consumption
but also give feedback on the most important features,
that is what parameter change will give the biggest
energy saving.
One of the major benefits of using machine learning
is that the model improves over time as it learns from
the data – the more data, the better the model becomes.
A traditional rule-based model would not learn and
adapt over time in the same way as the machine learning
model does.
25 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Capabilities for battery foil in Finspång and Shanghai
To capture the growth in the battery market, Gränges in 2021
decided to invest SEK 100 million over two years to add capabilities
for production of battery cathode foil in Shanghai and Finspång.
The first phase of the investment targets an annual capacity of
about 10 ktonnes equally split between the sites.
Capacity and capability expansion in Gränges Americas
The demand for flat rolled aluminium products in North America
has grown during the past years, in part driven by trade barriers
and tariffs that have limited imports. This has led to improved
market conditions that are expected to remain during the years
to come.
Since 2017, Gränges has invested significant amounts in capac-
ity and capability expansion in its plants in the US. The capacity
in the Huntingdon plant has increased by more than 20 per cent,
which further positions Huntingdon as one of the most modern
and efficient plants in North America.
In 2021 Gränges decided to invest additionally USD 33 million to
expand its aluminium recycling, remelting and casting operations
in Huntingdon to meet the growing demand from North American
customers. The expansion includes investment in buildings and
a new casting line. When completed, the casting capacity in
Huntingdon will increase by about 25 ktonnes per year and will
enable higher capacity utilization. It will improve the robustness
of the supply chain and improve profitability, as it reduces the
dependency on more expensive external sources. The investment
also supports Gränges’ high sustainability ambitions by improving
both energy and carbon intensity. The project is estimated to take
less than two years to complete and is expected to contribute
positively to Gränges’ operating profit in 2023.
The Newport plant was restarted by Gränges in 2019 after
upgrading investments of existing mills and equipment. The plant
brings capabilities to produce light gauge aluminium foil, which is
an attractive niche market, historically served mainly through
imports. The investment to upgrade the Newport plant’s existing
rolling mills and equipment will, once completed, add 20 ktonnes
of new capacity to meet growing demand in the light gauge alu-
minium foil market in the US. The upgrade continued during the
first months of 2021. Unfortunately, the project was interrupted by
a fire in May. The current production level could be sustained but
the volume ramp-up originally planned to take place during the
second half of 2021 was delayed. Read more about the fire on
page 16.
Customer margin tool for
improved profitability in
Gränges Americas
CASE
Knowing the profitability of the products is a cornerstone
of any successful business strategy. Gränges Americas
has developed a customer margin tool to gain insight
into per-specification level profitability. This data-driven
tool enables optimum pricing by product and increased
response time to new customer specifications. It is
updated monthly and combines 20 dierent data sources
into one cohesive model to give the most accurate profit-
ability information. The tool has been a key factor in
transforming both how to understand the business and
how to go to market.
26 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Long-term targets
GROWTH
Increase sales volume at least in line with
the company’s end-customer markets.
Comment: In 2021, sales volume increased
by 39 per cent. Excluding Gränges Konin
sales volumes increased by 18 per cent,
which was better than the estimated growth
in end-customer markets of 7 per cent. This
was mainly driven by sales volume to the
automotive industry where the growth was
significantly higher than the estimated
growth in light vehicle production. Supply
chain turbulence and adjustments of in -
ventory levels at the automotive customers
impacted sales volumes and growth rates.
100
200
400
300
500
2120191817
%
–25
0
25
50
75
ktonnes
Sales volume
Growth
CAPITAL STRUCTURE
Have a net debt which should normally be
1–2 times adjusted EBITDA over the last
12 months period.
Comment: In 2021, net debt increased by
SEK 351 million to SEK 3,643 million, cor-
responding to 2.2 times adjusted EBITDA.
High metal prices and continuing expansion
investments, with yet limited returns, led to
a net debt EBITDA ratio above 2.
0
1
2
4
3
18 19 20 2117
SEK million
0
1,000
2,000
3,000
4,000
Net debt
Net debt/adjusted EBITDA
Times
RETURN ON CAPITAL EMPLOYED
Generate a return on capital employed of
15–20 per cent over time.
Comment: In 2021, return on capital
employed increased by 1.9 percentage
points to 10.0 per cent. The increase was
driven by higher adjusted operating profit
which was partly oset by increased assets
following the ongoing expansion investments.
Adjusted operating profit was negatively
impacted in the second part of 2021 due
to high inflationary pressure on operating
costs which was not fully compensated for
by price increases.
2120191817
%
0
5
10
15
20
SEK million
Capital employed
Return on capital employed
2,000
4,000
6,000
10,000
8,000
DIVIDEND POLICY
Pay a dividend of 30–50 per cent of the
profit for the year. Decisions on dividends
will reflect the company’s financial position,
cash flow and outlook.
Comment: The Board of Directors
proposes a dividend of SEK 2.25 (1.10)
per share for the 2021 fiscal year,
corrsponding to 40 per cent (32) of
the profit for the year.
0
3
6
9
%
0
15
30
45
17 18 19 20 21
SEK per share
Earnings per share, diluted
Dividend per share
Dividend payout ratio
Financial
Gränges should grow at least in line with the market, generate a return on capital employed of 15–20 per cent,
have a net debt of 1–2 times adjusted EBITDA, and pay a dividend of 30–50 per cent of the profit for the year.
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WORKPLACE
SAFETY
Reduce Total Recordable Rate to
<3.0 recordable accidents per
million hours worked.
Comment: In 2021, Total Record-
able Rate (TRR) increased to
6.5 recordable accidents per million
hours worked. Excluding Gränges
Konin and Gränges Powder Metal-
lurgy, TRR was 6.9 (5.5). Severity
Rate increased to 139 lost workdays
per million hours worked, which
corresponds to 101 (109) excluding
Gränges Konin and Gränges Powder
Metallurgy.
SOURCED ALUMINIUM
SCRAP
Increase the share of sourced alu-
minium scrap to at least 30 per cent
of total sourced metal input.
Comment: In 2021, the share of
sourced aluminium scrap increased
to 28.5 per cent. Excluding Gränges
Konin and Gränges Powder Metal-
lurgy, the share increased by
2.5 percentage points to 25.0
(22.5). The increase was driven
by expanded sourcing of aluminium
scrap in all regions, mainly in
Gränges Americas.
Sustainability
Gränges has a group-wide sustainability framework which covers 13 material topics grouped into five sustainability
pillars. Each pillar has an accompanying long-term commitment and targets for 2025. The targets below represent
a subset of the 2025 sustainability targets which are presented on page 30.
0
2
4
8
6
1918 20 2117
Number of recordable accidents
per million hours worked
Total Recordable Rate
Note: 2017–2020 exclude Gränges Konin and Gränges Powder Metallurgy.
1) Versus baseline 2017, recalculated to include Gränges Konin.
PRODUCT
STEWARDSHIP
100 per cent of Gränges’ products
to have third-party verified sustain-
ability information available.
Comment: In 2021, the share of
products with third-party verified
sustainability information increased
to 35 per cent, which corresponds
to 43 per cent (19) excluding
Gränges Konin and Gränges Powder
Metallurgy. Local product carbon
footprint tools and certificates are
now in use at Gränges Finspång and
Gränges Shanghai.
RESPONSIBLE SOURCING
AND PRODUCTION
All sites to achieve certifications
in accordance with the Aluminium
Stewardship Initiative (ASI)
Performance Standard and Chain
of Custody (CoC) Standard.
Comment: In 2021, Gränges
Finspång achieved certification
in accordance with the ASI CoC
Standard, followed by Gränges
Shanghai in January 2022. In con-
junction with the CoC Standard cer-
tification, Finspång achieved a full
Performance Standard certifica-
tion, upgraded from a provisional
status due to COVID-19. Gränges
Shanghai was certified against
ASI Performance standard in 2019.
0
10
5
15
25
20
30
%
Aluminium scrap of total
sourced metal inputs
19 20 211817
0
10
20
40
30
50
19 20 211817
%
Products with third-party verified
sustainability information
EMISSIONS AND
CLIMATE IMPACT
Reduce carbon emissions intensity
from own operations and purchased
energy (scope 1+2) by 25 per cent.
1)
Reduce carbon emissions intensity
from sourced metal inputs (scope 3)
by 30 per cent.
1)
Comment: In 2021, carbon intensity
reached 0.88 tonnes CO
2
e/tonne for
scope 1+2 and 8.4 tonnes CO
2
e/
tonne for scope 3. Excluding
Gränges Konin and Gränges Powder
Metallurgy, scope 1+2 intensity
decreased by 11 per cent to
0.73 (0.83) and scope 3 by 3 per cent
to 9.3 (9.6). Total carbon intensity
(scope 1+2+3) has now been reduced
by 19 per cent vs. baseline 2017.
0
5
10
15
19 20 211817
Own operations and purchased
energy (scope 1+2)
Sourced metal inputs (scope 3)
Tonnes CO
2
e/tonne
0
3
2
1
4
5
19 20 211817
Chain of Custody Standard
Performance Standard
Number of certified sites
28 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
A strong commitment to sustainability
By managing its business in a sustainable and responsible way, Gränges strengthens its long-term
competitiveness and creates financial and operational value for the company and its stakeholders.
Sustainable business value is achieved by reducing undesired impacts of the company’s operations
and at the same time enforcing positive contributions and opportunities that emerge from
integrating sustainability aspects into the business and value chain.
A vital resource for a sustainable economy
Aluminium is a circular material, capable of being recycled infini-
tively without losing its original properties such as lightness,
conductivity, formability, durability and impermeability. These
properties make aluminium a vital resource for a circular economy,
and an important material supporting key sectors, e.g. transport,
construction, packaging and renewable energy technologies, to
achieve their climate targets. With the global push for sustainable
development and the transformation into a more resource efficient
and circular economy, Gränges’ customers are increasingly recog-
nizing the importance of sustainable materials.
Gränges is subject to the EU taxonomy and has in 2021 identi-
fied aluminium recycling as an eligible activity and an important
enabler to support global sustainable development.
Developing sustainable aluminium products
Sustainability has been identified as one of the most important
business drivers for Gränges and is integrated into the company’s
core business and strategy. In line with the company’s purpose
and promise, Gränges’ strategic priority is to develop sustainable
aluminium products and solutions, characterized by having a low
climate impact, being circular and resource-efficient, as well as
being responsibly sourced and produced. To enable and speed up
the development of sustainable aluminium products and solu-
tions, Gränges leverages its sustainability framework to integrate
sustainability into its business, work streams, and value chain.
A systematic approach to integrate sustainability
The company’s group-wide sustainability framework and accompa-
nying 2025 targets was originally launched in 2019. It covers 13 sus-
tainability aspects, grouped into five sustainability pillars, that are
deemed to have the highest sustainability impact and are assessed
by stakeholders to be most important for the company to address.
Gränges has delivered good progress for many sustainability priori-
ties in the past few years, and as a result the company in 2021
upgraded some of the 2025 targets. In 2021, Gränges also linked the
achievement of three of its 2025 sustainability targets to its financ-
ing cost through issuance of a Sustainability-Linked Bond.
Gränges’ SVP Sustainability is responsible for driving the global
sustainability strategy and facilitating progress across the frame-
work and targets, while the regional Presidents execute and
implement local sustainability strategies aligned with the Group
strategy. Functional cross-regional teams ensure integration of
sustainability aspects into key functions such as Purchasing,
Sales, Production and Human Resources.
Sustainability commitments and initiatives
Gränges is since October 2016 a signatory to the UN Global
Compact and undertakes to fulfil the principles relating to human
rights, labour, environment, and anti-corruption. The principles
also form the foundation of the company’s Code of Conduct and
Supplier Code of Conduct. In addition, Gränges is committed to
helping fulfil the 2030 Agenda and Sustainable Development
Goals (SDGs) and the company has identified those SDGs that are
most relevant and where the company has its largest impacts and
contributions.
Gränges participates in various industry initiatives to ensure
that aluminium is mined, produced, and used sustainably, and to
drive change where it has the highest value chain impact. One
such initiative is the Aluminium Stewardship Initiative (ASI), which
works to bring together producers, users, and stakeholders in the
aluminium value chain and maximize the contribution of alumin-
ium to a sustainable society.
Read more on pages 118–139.
>> SUCCESSFUL ISSUANCE OF
SUSTAINABILITY-LINKED BOND
In September 2021, Gränges successfully issued a five-year
SEK 600 million senior unsecured Sustainability-Linked Bond
under the company’s updated MTN programme. The new bond
is due in 2026. Gränges has tied the Sustainability-Linked Bond
to the achievement of three defined sustainability performance
targets (SPTs), which all play a central role in Gränges’ sustain-
ability strategy:
SPT 1: Reduce carbon emissions intensity from own operations
and purchased energy (scope 1+2) by 25 per cent by 2025
compared to 2017 measures in tonnes CO
2
e/tonne.
SPT 2: Reduce carbon emissions intensity from sourced metal
inputs (scope 3) by 30 per cent by 2025 compared to 2017
measured in tonnes CO
2
e/tonne.
SPT 3: At least 30 per cent of total sourced metal inputs to be
aluminium scrap by 2025.
29 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Sustainability framework and 2025 targets
SUSTAINABLE
INNOVATION AND SALES
RESPONSIBLE AND
SUSTAINABLE SOURCING
RESOURCE-EFFICIENT
OPERATIONS
DIVERSE AND
HIGH-PERFORMING TEAMS
ETHICAL
BUSINESS PRACTICES
MATERIAL TOPICS
• Sustainable innovation
• Product stewardship
• Responsible sourcing
• Sourced metals: primary aluminium
• Emissions and climate impact (scope 3)
• Workplace safety
• Waste management
• Water management
• Career and leadership
• Diversity and inclusion
• Employee wellbeing
• Ethics and anti-corruption
• Emissions and climate impact (scope 1+2)
• Energy
• Sourced metals: aluminium scrap
2025 SUSTAINABILITY TARGETS
• 100 per cent of Gränges’ products to have
third-party verified sustainability informa-
tion available
• 100 per cent of significant suppliers
1)
to be committed to Gränges’ Supplier Code
of Conduct or equivalent standard
•
≥
20 per cent renewable energy
• –30 per cent carbon emissions intensity
from sourced metal inputs (scope 3)
2)
•
≤
3.0 Total Recordable Rate
•
≤
50 Severity Rate
• –17 per cent energy intensity
2)
• All Gränges sites to have implemented
a local water management plan
• 100 per cent of employees to have
annual performance and development
discussion
•
≥
30 per cent of senior management to
be women
3)
•
≥
85 Employee engagement index
• 100 per cent of employees to be annually
trained in Gränges’ Code of Conduct
• 100 per cent of white-collar employees to
be annually trained in anti-corruption
• –25 per cent carbon emissions intensity from own
operations and purchased energy (scope 1+2)
2)
•
≥
30 per cent of total sourced metal inputs to be aluminium scrap
All sites to have achieved ASI sustainability certifications
4)
• Read more on pages 33–34 • Read more on pages 35–37 • Read more on pages 38–40 • Read more on pages 41–42 • Read more on page 43
Note: Links to relevant Sustainable Development Goals can be found on page 121.
1) All metal suppliers and other suppliers with a purchase value above SEK 5 million or equivalent in local currency.
2) Versus baseline 2017. Gränges follows the Greenhouse Gas Protocol Standards to calculate its climate impact.
3) Employees eligible to participate in Gränges’ long-term incentive (LTI) programme.
4) Certifications in accordance with the Aluminium Stewardship Initiative (ASI) Performance Standard and Chain of Custody Standard.
30 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
EMISSIONS AND CLIMATE IMPACT
Taking a life-cycle perspective
Gränges works actively to take product stewardship and reduce
climate impact along the value chain and across the life-cycles of
its products. This means that the company looks at the climate
impact from extraction of bauxite until the products’ end-of-life.
In 2021, 91 per cent of Gränges’ total climate impact originated
from sourced metal inputs (scope 3) and 9 per cent from own
operations and purchased energy (scope 1+2). Gränges follows
the Greenhouse Gas Protocol Standards to calculate the cradle-
to-gate climate impact from bauxite extraction to delivery of
Gränges’ products to customers. The product manufacturing, use,
and end-of-life phases are currently excluded in Gränges’ climate
impact calculations due to a lack of relevant data.
Ambitious climate targets
In 2018, Gränges launched a 2025 climate target to reduce carbon
emissions intensity from own operations and purchased energy
(scope 1+2) by at least 25 per cent versus 2017. In 2021, Gränges
also disclosed a quantitative target to reduce carbon emissions
intensity from sourced metal inputs (scope 3) by at least 30 per
cent versus 2017, upgraded from the previously directional target.
Gränges strives to take a holistic approach in reducing the climate
impact and therefore measures total carbon emissions intensity
(scope 1+2+3) as the key metric.
Value chain collaboration
Gränges actively collaborates with suppliers, customers, and
other business partners to identify and capture new opportunities
to reduce the climate impact. Supply chain collaboration for
example covers sourcing of aluminium scrap, low-carbon primary
aluminium as well as energy from low-carbon sources. Customer
collaboration includes design and development of innovative and
sustainable aluminium products and solutions. Gränges also
works internally to increase resource efficiency including energy,
materials, waste, and water.
Climate-related risks
Climate-related risks are integrated in Gränges’ multi-disciplinary
and company-wide risk management process. In conjunction with
Gränges’ first submission to CDP in 2021, the company conducted
a risk and opportunity workshop with selected members of senior
management.
The largest climate-related risks were identified to be emerging
regulation of carbon pricing mechanisms, reduced demand for
products and services due to changing customer behaviour, and
reduced production capacity because of increased severity and
frequency of extreme weather events. By systematically working
in line with the company’s climate strategy, Gränges aims to miti-
gate such risks. Refer to page 49 for more information.
Total carbon intensity, scope 1+2
1)
Total carbon intensity, scope 3
1)
>> PERFORMANCE SUMMARY
Key performance indicator
2025
target
2021 (2020)
performance
1)
Carbon emissions intensity from own
operations and purchased energy
(scope 1+2), % reduction vs. 2017
–25 –8 (3)
Carbon emissions intensity from
sourced metal inputs (scope 3),
% reduction vs. 2017
–30 –20 (–20)
1) 2020 excludes Gränges Konin and Gränges Powder Metallurgy.
Comment: In 2021, the carbon intensity was reduced by 9 per cent
for scope 1+2 and 22 per cent for scope 3 versus baseline 2017,
excluding Gränges Konin and Gränges Powder Metallurgy. The
reduction in scope 1+2 intensity was driven by a higher share of
renewable energy combined with a lower energy intensity. The
reduction in scope 3 intensity was driven by a higher share of
sourced aluminium scrap.
Climate strategy
Gränges is committed to combatting climate change and reducing the climate impact from its business and
along the value chain. Managing the climate topic therefore runs throughout the company’s sustainability
framework and value chain.
Total carbon footprint, 2021
Own operations and purchased
energy (scope 1+2), 9%
Sourced metal inputs (scope 3), 91%
1817 19 20 21
Tonnes CO
2
e/tonne
Own operations and purchased
energy (scope 1+2)
1.0
0.8
0.6
0.4
0.2
0.0
2025
Target
15
12
9
6
3
0
1817 19 20 21
Tonnes CO
2
e/tonne
Sourced metal inputs (scope 3)
2025
Target
1) 2017–2020 exclude Gränges Konin and Gränges Powder Metallurgy. Comparable carbon intensity for 2021, i.e. excluding
Gränges Konin and Gränges Powder Metallurgy, was 0.73 tonnes CO
2
e/tonne for scope 1+2 and 9.3 tonnes CO
2
e/tonne for scope 3.
31 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
SUPPLY CHAIN GRÄNGES’ OPERATIONS CUSTOMERS AND END-USERS
Process
Primary
aluminium production Aluminium recycling Semi-fabrication Product manufacturing Product use
Description
in brief
Extraction, refining and
smelting of primary
aluminium.
Collecting, sorting, and
recycling of aluminium.
Remelting and casting,
rolling, and slitting.
Manufacturing of prod-
ucts containing
Gränges’ materials, e.g.
vehicles,
buildings, and
packaging.
Using products
containing Gränges’
materials.
Climate
impact
Mainly from the energy-
intensive electrolytic
smelting process.
Smaller impacts also
from the extraction and
refining processes.
Mainly from processing
and transporting of recy-
cled materials. By using
aluminium scrap,
Gränges can save up to
95 per cent of the energy
and climate impact that
would have been needed
in primary aluminium
production.
Mainly from fuels and
electricity used in
Gränges’ operations.
Mainly from customers’
product manufacturing
when materials sourced
from Gränges are pro-
cessed.
Mainly from using prod-
ucts containing Gränges’
materials. Aluminiums’
lightweighting proper-
ties can lead to substan-
tial fuel and carbon
emissions savings com-
pared to other materials.
Gränges’
priorities
• Actively choose input
material and supplier
based on climate
performance and
reduction activities
and targets.
• Collaborate with
suppliers to expand
sourcing of primary
aluminium produced
using renewable energy.
• Promote responsible
sourcing and increased
supply chain traceabil-
ity through dialogue
with commodity traders.
• Collaborate with cus-
tomers and recycling
companies to expand
sourcing of aluminium
scrap.
• Design and innovate
alloys, processes and
applications which
allow for a higher share
of aluminium scrap and
which are efficiently
dismantled, collected,
sorted, and recycled
after products end-of-
life.
• Increase energy
efficiency and the use
of renewable energy
in own operations.
• Increase resource
efficiency and remelt-
ing of recycled alumin-
ium in own operations.
• Collaborate with customers to design and develop
sustain able aluminium products and solutions,
including alloys that are resource efficient in the
product manufacturing and use phase, and which
are recyclable at the end-of-life.
GHG
Protocol
category
and sub-
categories
Scope 3
• Purchased goods
and services
Scope 3
• Purchased goods
and services
• End-of-life treatment
of sold products
Scope 1+2 Scope 3
• Processing of sold
products
Scope 3
• Use of sold products
S
c
o
p
e
3
S
c
o
p
e
1
+
2
PRIMARY
ALUMINIUM
PRODUCTION
SEMI-FABRICATION
PRODUCT
MANUFAC
-
TURING
PRODUCT USE
ALUMINIUM
RECYCLING
In 2021, Gränges and the aluminium and energy company
Hydro joined forces to provide low-carbon and circular
aluminium oerings to the automotive market. Through the
partnership, Gränges sources low-carbon primary
aluminium from Hydro. An increased use of aluminium in
transport applications reduces the weight, energy
consumption and carbon footprint of the vehicle as well
as the range of electric vehicles when in use. It also
contributes to improved resource eciency in the product
manufacturing process. Gränges and Hydro are both
committed to pushing the boundaries for low-carbon and
circular aluminium products and supporting the automotive
industry to become more sustainable.
Collaboration to reduce climate
impact in the automotive industry
CASE
32 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Sustainable innovation and sales
SUSTAINABLE INNOVATION
Leveraging the advantages of aluminium
Gränges works to take a frontline position in markets where higher
sustainability performance requirements are set on products, and
a key priority is to develop products which can improve customers’
and products’ sustainability performance. The company works to
leverage the advantages of aluminium by designing and manufac-
turing products and solutions which can improve customers’ oper-
ational performance as well as the sustainability performance of
their products. Lightweight aluminium can deliver significant
energy and climate savings in the use phase, often entirely offset-
ting the initial energy consumption required to produce the metal.
As an example, an increased use of aluminium in transport
applications contributes to improved resource efficiency in cus-
tomers’ product manufacturing process. It also reduces the
weight, energy consumption and carbon footprint of the vehicle as
well as the range of electric vehicles when in use. According to a
study commissioned by the International Aluminium Institute, it
was concluded that lightweighting of transport vehicles can lead
to substantial fuel and carbon emissions savings. Per 100 kg
weight reduction, the potential lifetime saving for a passenger car
was estimated between 500 kg and 2,000 kg of carbon dioxide.
1)
Developing sustainable alloys
The company works to incorporate sustainability into product
development with a focus on products’ full life-cycle performance.
The biggest opportunities for improving products’ sustainability
performance are in the early stages of the product development
process, when the product characteristics are decided.
Gränges has an ambition to design low-carbon and circular
offerings that are based on more recycled materials and that can
be efficiently dismantled, collected, sorted, and recycled down-
stream the value chain and after products’ end-of-life. Aluminium
is well suited for recycling, but the maximum level of recycled con-
tent is determined by the specific alloy composition. Gränges’
alloys are well suited for a high recycled content, however strict
product requirements on strength, corrosion resistance and other
critical characteristics need to be met simultaneously.
Almost half of Gränges’ ongoing product development projects
aim to reduce products’ negative sustainability impacts, either
through a higher recycled content or through lightweight products
with better characteristics enabling less, smarter, or longer
usage.
Customer collaboration
Gränges runs several customer collaborations within the heat
exchanger, HVAC, and battery segments where the aim is to jointly
develop sustainable alloys in line with customers’ material
characteristics requirements.
Closed and open loop collaboration, in which aluminium scrap
from customers’ manufacturing process is brought back to
Gränges and re-melted into new products, is an important part of
customer interactions. Several such initiatives have been agreed
during 2021.
Gränges is committed to developing and selling products and solutions which can improve customers’
and products’ sustainability performance as well as contribute positively to a more circular industry
approach to aluminium. A sustainable aluminium oering is characterized by having a low climate
impact, being circular and resource-ecient and being responsibly sourced and produced.
>> PERFORMANCE SUMMARY
Key performance indicator
2025
target
2021 (2020)
performance
1)
Products with third-party verified
sustainability information available, %
100 35 (19)
1) 2020 excludes Gränges Konin and Gränges Powder Metallurgy.
Comment: In 2021, 35 per cent of Gränges’ products had verified
sustainability information available, which corresponds to 43 per
cent excluding Gränges Konin and Gränges Powder Metallurgy.
Local product carbon footprint tools and certificates are now in
use at Gränges Finspång and Gränges Shanghai.
In 2021, Gränges Americas expanded its closed loop recycling
programs with local foil and HVAC customers. In these pro-
grammes, customers’ process scrap from manufacturing is
brought back and remelted into alloys sold back to the same
customer. The materials are either transported back by
Gränges or through a third-party recycling or freight
company. Replacing volumes of primary aluminium with
aluminium scrap has a clear positive eect on Gränges’
climate impact from sourced metal inputs (scope 3). Gränges
Americas have been running such programmes since 2017
and in 2021, approximately 7,000 tons of aluminium scrap was
recycled back from customers.
Expanded closed loop
programmes with customers
CASE
1) IFEU: Energy savings by lightweighting – 2016 Update.
33 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
PRODUCT STEWARDSHIP
Product sustainability information and labelling
Gränges works actively to take product stewardship and reduce
the climate impact along the aluminium value chain. The company
has measured its organizational cradle-to-gate
1)
carbon footprint
since 2016 and a current priority is to also calculate and declare
products’ individual sustainability impacts.
Such information enables customers to understand, evaluate
and compare Gränges’ products from a sustainability perspective.
It also helps Gränges to build a solid fact base for innovation and
performance improvements, with the aim to further design and
develop customer offerings geared towards sustainability and
circularity. By 2025, Gränges targets to have third-party verified
sustainability information available for all products.
Third-party verified product carbon footprints
In 2021, Gränges expanded the use of its internal life-cycle and
carbon footprint assessment tool which enables declarations of
environmental impacts on a product level, starting with the prod-
ucts’ carbon footprint. The tool is now in use at the sites in Fin-
spång and Shanghai where the company can offer customers
third-party verified carbon footprint certificates and a detailed
carbon footprint report outlining the methodology.
2)
Gränges’ product carbon footprint assessments are conducted
in accordance with ISO 14040, ISO 14044, and ISO 14067 and to
ensure credibility and robustness, Gränges works with the exter-
nal party IVL Swedish Environmental Research Institute to verify
the methodology, process and routines used in the assessment.
All data is updated annually.
1) From bauxite extraction to the gate to Gränges’ customers.
2) Available on Gränges’ website: https://www.granges.com/
sustainability/sustainable-innovation-and-sales/
0
10
20
40
30
50
19 20 211817
%
Products with third-party verified
sustainability information
0
10
20
40
30
50
19 20 211817
%
Products with third-party verified
sustainability information
Products with sustainability information, 2017–2021
Note: 2017–2020 exclude Gränges Konin
and Gränges Powder Metallurgy.
34 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
5. DEVIATION
MANAGEMENT
and mitigate sustainability risks in the supply chain, as well as
ensure compliance with Gränges’ Supplier Code of Conduct. Each
supplier is categorized as having a high, medium or low potential
risk based on a weighted average risk score. Read more on page 36.
Sustainability desktop assessment
Significant suppliers categorized as medium or high potential sus-
tainability risk are required to complete an evidence-based desk-
top sustainability assessment, currently managed by EcoVadis, an
external provider of sustainability analyses and ratings. EcoVadis
sends out customized sustainability questionnaires to suppliers,
analyses the data collected, and provides verified sustainability
ratings, scorecards, and benchmarks. High scoring suppliers are
to be assessed every three years, medium scoring suppliers every
second year and low scoring suppliers annually.
In 2021, 33 significant suppliers (25) had a valid third-party
verified sustainability assessment available.
Follow-up and engagement
Results from the desktop assessments are integrated into local
supplier review procedures, e.g. supplier scorecards as well as
supplier discussions and on-site visits, as applicable locally.
Gränges also conducts on-site supplier audits depending on
suppliers’ strategic importance and performance. Such audits
mainly focus on ensuring compliance with Gränges’ quality and
delivery requirements, but sustainability criteria are also often
included.
In 2021, Gränges conducted 24 on-site supplier audits in total
or 17 (5) excluding Gränges Konin.
Ensuring responsible and sustainable sourcing
RESPONSIBLE SOURCING
Global responsible sourcing programme
In line with Gränges’ Responsible Sourcing Policy, all sites are to
operate a local responsible sourcing programme covering its sig-
nificant suppliers. The policy applies to all Gränges’ employees
and mainly concerns individuals who are in contact with suppliers.
The responsible sourcing programme is used as a platform to
enforce sustainable practices, ensure continuous improvement,
develop collaboration, and build lasting relationships with suppli-
ers. The programme was launched in 2020, and next steps include
to further harmonize the processes of the desktop sustainability
assessments with the on-site audits conducted.
Global supplier sustainability requirements
Significant suppliers
1)
are requested to sign Gränges’ Supplier
Code of Conduct which includes basic sustainability requirements
on suppliers. By signing, suppliers declare to observe all applica-
ble laws and regulations, including the ten principles of the UN
Global Compact, and to promote the implementation of these
principles in their own supply chains. In 2021, Gränges continued
to roll-out its Supplier Code of Conduct as part of new or re-
negotiated supplier contracts, and Gränges Konin successfully
implemented the the Supplier Code of Conduct among its supplier
base for the first time.
Sustainability risk screening
Significant suppliers are annually screened in a desktop tool for
potential environmental, social and corruption risks depending on
the purchasing category and country of origin. The aim is to identify
Gränges is committed to promoting responsible and sustainable practices in the company’s supply chain and incorporating
sustainability criteria into its sourcing agreements and partnerships. Sourcing activities are mainly managed by the
local procurement organization and the supplier base is generally geographically close to the respective markets.
>> PERFORMANCE SUMMARY
Key performance indicator
2025
target
2021 (2020)
performance
1)
Supplier Code of Conduct
commitment, % purchase value
100 98 (97)
Sourced aluminium scrap, % ≥30 28.5 (22.5)
Renewable energy, % ≥20 15 (13)
ASI certifications, number of sites
2)
All 2/2 (1/0)
1) 2020 performance excludes Gränges Konin and Gränges Powder Metallurgy.
2) Number of sites with Performance Standard/Chain of Custody Standard.
Comment: In 2021, the share of sourced aluminium scrap increased
to 28.5 per cent as a result of expanded sourcing in all regions.
Excluding Gränges Konin and Gränges Powder Metallurgy, the share
was 25.0 per cent. The share of renewable energy increased to
15 per cent driven by a lower share of non-renewable sources in
the electricity mix.
A GLOBAL SUPPLY CHAIN
In 2021, Gränges had approximately 4,200 suppliers in
total. Of these, 240 were defined as significant
1)
. Approxi-
mately 85 per cent of the purchase value from these suppli-
ers was direct materials (primary aluminium ingots, slabs,
aluminium scrap and alloying elements) whereas indirect
materials and services accounted for 15 per cent. The
largest indirect categories include energy, transports, and
maintenance. In total, 74 per cent of the direct materials
was sourced through commodity traders.
1) All metal suppliers and other suppliers with a purchase value above SEK 5 million or
equivalent in local currency.
4. FOLLOW-UP
& ENGAGEMENT
3. SUSTAINABILITY
DESKTOP ASSESSMENT
2. SUSTAINABILITY
RISK SCREENING
1. GLOBAL SUPPLIER
SUSTAINABILITY
REQUIREMENTS
35 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
To promote responsible production, sourcing, and stew-
ardship of aluminium across the aluminium industry,
Gränges is a member of Aluminium Stewardship Initiative
(ASI) which is a global non-profit standards setting organ-
ization which works to maximize the contribution of alumin-
ium to a sustainable society. ASI oers two independent
certification standards: the Performance Standard and
the Chain of Custody (CoC) Standard, and Gränges’ target
is that all sites by 2025 should have such ASI certifications
in place.
In 2021, Gränges had achieved two Performance
Standard certifications (Shanghai and Finspång) and one
CoC Standard certification (Finspång) and in January
2022, also Gränges Shanghai achieved certification in
accordance with the CoC Standard.
The CoC Standard forms the basis for selling ASI-certi-
fied aluminium, which assures that Gränges’ products are
responsibly sourced and produced across the entire supply
chain, from extraction of raw materials to the finished
product. Gränges uses the ASI certifications to provide
assurance to its customers and other business partners
that Gränges is committed to meeting their increased
sustainability requirements and demand for sustainable
aluminium.
Achieving ASI sustainability certifications
CASE
Deviation management
Gränges uses an internal escalation process to decide on appro-
priate actions in cases where a supplier declines to sign the
Supplier Code of Conduct, declines to complete the sustainability
desktop assessment, or after a supplier has received a low
sustainability re-assessment score. All sites have a local
escalation team and routine in place. Deviations can lead up to
blocked purchase orders and business termination.
In 2021, Gränges established local escalation teams for all
regions, which were activated in cases where suppliers declined
to participate in the sustainability assessments.
SUSTAINABILITY RISKS IN
GRÄNGES’ SUPPLY CHAIN
Gränges’ risk screening model was developed in 2019 with
support from a third-party. Country risks were defined based on
relevant sustainability country indices within human rights,
corruption, and environment whereas sector risks were decided
based on qualitative information from news articles, industry
reports, NGO databases and other reports. The largest impacts
identified were associated with the extraction industries of
primary aluminium and alloying elements.
Social risks identified include human rights, labour rights as
well as health and safety. Indigenous communities can for
example be aected by bauxite mining since mines are frequently
located near or on indigenous peoples’ territories, and extrac-
tors may not always obtain free, prior, and informed consent.
Mining activities can also lead to illegal settlements and reloca-
tions, as well as violations of land rights.
Environmental risks include water consumption, leakage, noise
from heavy vehicles, air emissions, and significant altercations to
the landscape due to digging the open-pit mines. Clear-cutting
trees and grasslands to extract bauxite contributes to biodiver-
sity loss, increased carbon emissions, and soil erosion.
Corruption risks are associated with extraction of certain
alloying minerals and can be associated with mining approvals.
36 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Total sourced metal inputs, 2021
Primary aluminium
(ingots + slabs), 69%
Alloying elements, 3%
Aluminium scrap, 28%
Sourced aluminium scrap,
2017–2021
35
30
25
20
15
10
5
0
1918 20 2117
%
2025
target
Aluminium scrap of total
sourced metal inputs
Sourced aluminium scrap
per category, 2021
Pre-consumer used
materials, 67%
Post-consumer used
materials, 33%
SOURCED METALS
Green primary aluminium sourcing
Expanding the use of low-carbon primary aluminium can reduce
the climate impact from sourced metal inputs, especially in regions
where the primary aluminium production is largely dependent on
fossil energy sources. In the metal purchasing process, Gränges
increasingly evaluates input materials and suppliers using climate-
related criteria, e.g. climate performance and carbon emissions
reduction activities and targets. The availability
of low-carbon
primary aluminium produced using renewable energy varies to a
large
extent depending on geography and renewable energy sup-
ply. When suitable, Gränges sources low-carbon primary alumin-
ium both from commodity traders and slab suppliers. The willing-
ness and feasibility from commodity traders to provide verified
carbon footprint certificates for low-carbon aluminium varies
across geographies and actors.
In 2021, 21 per cent (26) of Gränges’ sourced primary aluminium
was defined as low-carbon in accordance with suppliers’ specified
and third-party verified carbon footprint certificates, mainly
related to sourcing within Gränges Finspång.
Raised recycling ambition
Expanding the use of aluminium scrap is the most efficient way
to reduce the climate impact from sourced metal inputs since
such materials can save up to 95 per cent of the energy needed to
produce primary aluminium. The environmental value of recycling
increases downstream in the value chain and post-consumer
(EOL) scrap is a clear positive contributor to the circular
aluminium usage.
Gränges sources pre-consumer used materials from customers
and recycling companies and post-consumer used materials from
recycling companies. The company also recirculates processed
aluminium from its own operations. As a result of Gränges’ strong
focus to increase sourcing of aluminium scrap, the company in
2021 upgraded its 2025 target from previously 20 per cent to at
least 30 per cent.
Varying recycling conditions
The conditions and availability of aluminium scrap differ geo-
graphi
c
ally, and the feasibility to increase usage depends on the
type of production as well as local availability. Since aluminium is
often used as a long-lasting material in buildings and vehicles
with long lifespans, the availability of aluminium scrap can be a
significant constraint. It can also be a challenge to recycle alumin-
ium as it is often used in combination with other materials, and an
efficient process requires good sorting, separating, and re-melt-
ing technologies. The lower the content of alloying elements, the
easier the materials are to separate, recycle and retain the value of.
In Gränges Finspång and Gränges Shanghai, where a high num-
ber of alloys for brazed automotive heat exchanger applications
are produced, strict sorting of aluminium scrap is required to
secure that the materials fit well in the specific alloys produced.
Material for brazed heat exchangers consists of clad materials
where different alloys are rolled together, which makes it difficult
to separate upon recovery. Brazed heat exchangers are also
challenging to recycle at end-of-life as the various constituents
are difficult to separate and sort. Efficient recycling systems are
critical to help retain the value of the alloy elements in the loop.
Gränges Konin faces the same challenge, but in addition to clad
materials for brazed automotive heat exchanger applications, the
facility also produces more standardized alloy applications that
allow for wider composition limits making it possible to reach a
higher share of sourced aluminium scrap. Gränges Americas simi-
larly produces more standardized alloy applications and all vol-
umes of aluminium scrap from its own processes are recirculated.
Note: 2017–2020 exclude Gränges Konin and
Gränges Powder Metallurgy.
37 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Resource-ecient operations
ENERGY
Increasing energy efficiency
Gränges works to achieve continuous energy efficiency improve-
ments. The company carries out regular energy audits and consid-
ers the best available technology for new investments and refur-
bishments. Energy efficiency measures are primarily linked to
improved metal yield, thermal processes, and recovery of waste
heat. The main energy consumption occurs in the re-melting and
casting process and with main energy sources being natural gas,
electricity, and liquefied petroleum gas.
Gränges strives to take a holistic approach in reducing the total
climate impact, and sometimes the company needs to accept
slight increases in energy consumption because of using more
aluminium scrap in the re-melting facilities compared to using pri-
mary ingots. The reduction in emissions from sourced aluminium
scrap more than offsets the increase in operational emissions.
Promoting renewable energy
By using renewable energy, Gränges can lower its carbon emis-
sions and reduce air pollutants from its production. The largest
impacts come from the company’s furnaces where aluminium is
re-melted either via combustion using fossil fuels or via induction
using electricity. In 2021, Gränges set a quantitative target to
increase the usage of renewable energy in its own operations to at
least 20 per cent by 2025, upgraded from a previously directional
target.
Gränges’ production facilities have different possibilities to
source renewable energy. In Finspång, Gränges sources 100 per
cent specified electricity from hydro power which is used in induc-
tion furnaces, whereas liquefied petroleum gas is used in com-
bustion furnaces. In Gränges Shanghai and Americas, natural gas
is the primary energy source, and electricity is sourced from regu-
lated energy markets which currently are mainly based on nuclear
and non-renewable energy. In Gränges Konin, natural gas and
electricity are the main energy sources where electricity is mainly
based on non-renewable sources such as coal.
Gränges is committed to strengthening its operational eciency and enforcing continuous
improvements to improve material and energy eciency and reduce emissions to air and water,
while at the same time provide a safe and secure workplace for Gränges’ employees. Thereby,
Gränges minimizes the negative impacts of its business and manufacturing.
>> PERFORMANCE SUMMARY
Key performance indicator
2025
target
2021 (2020)
performance
1)
Total Recordable Rate
2)
≤3.0 6.5 (5.5)
Severity Rate
3)
≤50 139 (109)
Energy intensity, % reduction vs. 2017 –17 5 (10)
Water management plans,
number ofsites
All 3/7 (2/5)
1) 2020 excludes Gränges Konin and Gränges Powder Metallurgy.
2) Number of recordable accidents per million hours worked.
3) Number of lost workdays per million hours worked.
Comment: In 2021, the Total Recordable Rate ended at 6.9 excluding
Gränges Konin. The increase was mainly a result of COVID 19-related
impacts in Gränges’ facilities in Finspång and Salisbury. Severity Rate
however decreased to 101 excluding Gränges Konin. Energy intensity
decreased by 5 per cent, also when excluding Gränges Konin and
Gränges Powder Metallurgy.
In 2021, Gränges Konin conducted an inventory of heating and
steam fittings to improve energy eciency in its operations.
Steam and heating installations are usually insulated only on
straight sections of pipelines, elbows, or tees, and due to its
Improved energy eciency in Gränges Konin
CASE
Gränges’ global EHS Policy outlines principles, basic
requirements and guidance on workplace safety and environ-
mental procedures. The policy applies to all employees and
individuals who are directly or indirectly related to Gränges,
such as independent contractors and consultants who work
on behalf of the company. In line with the policy, all sites are
to operate certified management systems for health and
safety, environment, and energy.
>> GLOBAL EHS POLICY
surface, uninsulated fittings generate significant losses of heat
energy. The inventory resulted in installation of insulating cov-
ers for elements of heating fittings, bringing expected energy
saving of 700 MWh per year.
38 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Energy use by type, 2021
Natural gas, 60%
Electricity, 35%
LPG, 3%
Steam, 1%
Diesel, 1%
District heating, 1%
Petrol, 0%
Surface water, 67%
Ground water, 18%
Third-party water, 15%
Renewable energy, 15%
Non-renewable energy, 79%
Nuclear energy, 7%
WATER MANAGEMENT
Various water conditions
Gränges uses water mainly for cooling purposes, such as cooling
production equipment and preventing overheating and production
disruptions. The production facilities in Huntingdon, Salisbury,
Newport and Shanghai have closed-loop cooling systems with a
high degree of water recirculation, which reduce water consump-
tion and the risk of water contamination. In addition, water is used
to make up emulsions in different process steps and for domestic
purposes. Ground water is used at the site in Huntingdon whereas
municipal water is used at the Salisbury, Newport, and Shanghai
sites. The production facility in Konin uses both ground water and
municipal water and the production facility in Finspång uses sur-
face water withdrawn from two nearby lakes. The water is primar-
ily used for cooling purpose and is then released into local water-
ways. Daily measurements are made to ensure that the released
water does not contain hazardous substances and water that may
contain contaminants is treated by an external partner before
being returned to water bodies.
Regional water stress and risks
Since the company’s production sites are located in areas with
various water stress and risks, Gränges manages water-related
aspects based on local circumstances. Input from the World
Resources Institute’s Aqueduct Water Risk Atlas shows that the
sites in Finspång and Newport are located in areas with low-to-
medium risk, Saint-Avold, Huntingdon and Salisbury sites in
medium-to-high risk, and Shanghai and Konin in high-risk areas.
No water sources are significantly affected by the water with-
drawal or discharge from Gränges.
Local water management plans
As water-related aspects and risks are managed based on local
circumstances, Gränges works to implement local water manage-
ment plans in all its locations. These plans include local targets
and activities to address water-related impacts, such as water
efficiency improvements, quality of effluent discharge, conserva-
tion activities, and local stakeholder engagement. At the end of
2021, Gränges has implemented local water management plans in
three sites: Finspång, Shanghai and Newport. The site in Newport
was certified in accordance with Alliance for Water Stewardship’s
(AWS) International Waters Stewardship Standards, confirming
Renewable energy/
energy mix, 2021
Water withdrawal
by source, 2021
that the site is both managing its water resources and contribut-
ing to efforts within the catchment. Gränges also includes water
risks when conducting supplier sustainability assessments. Read
more on page 35.
WASTE MANAGEMENT
Increased waste recycling
Gränges aims to reduce waste in all production facilities with the
ambition to recycle and reuse waste in production where possible.
Waste management is handled locally, and all sites have a local
waste handling procedure. The company generates waste in the
form of dross in the re-melting process and emits oil to air and
water because of the cold rolling process where oil is used to cool
down the mill and lubricate the interface between the rolls and
the material.
One example of waste recycling is dross disposal which is han-
dled by specialized dross handlers from which some facilities are
reclaiming aluminium through recycled scrap ingots (RSI). Gränges
Finspång has invested in a dross press machine to recover alumin-
ium from dross on site and Gränges Shanghai has conducted a
study on treatment of waste emulsions from the hot rolling mill to
reduce hazardous waste.
0
1
2
4
3
1918 20 2117
MWh/tonne
2025
target
Energy intensity,
2017–2021
Note: 2017–2020 exclude Gränges Konin and
Gränges Powder Metallurgy.
39 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
In 2021, Gränges’ site in Huntingdon initiated a new
programme focusing on improving machine guarding. Super-
visors, engineers, and employees who work on the machines
everyday conduct behavioral based audits that focus on
machine guarding and to observe the work-stations. The pur-
pose is to identify high-risk areas and address a solution and
design that allows ecient work and at the same time elimi-
nating risk of injuries. The facility has completed one slitter
machine in 2021, and the plan is to complete all finishing
equipment by 2022 and then progress on through the plant.
Safety improvements in Huntingdon
CASE
WORKPLACE SAFETY
Striving towards an injury-free workplace
Gränges strives towards a workplace that protects the health and
fosters the wellbeing of employees and all persons directly or indi-
rectly related to the company. No individual should be at risk of
injury in a Gränges workplace. Safety is integrated into Gränges’
programme for lean operations and a 5S system is implemented
in all production facilities to ensure a clean, orderly and safe work
environment with the objective to proactively and quickly remove
safety hazards and to drive safe behaviours.
Hazard identification and risk assessment
Gränges’ manufacturing entails specific safety hazards which are
continually monitored to eliminate or reduce the risks of injuries.
The “critical five” hazard categories have top priority: fall protec-
tion, molten metal, mobile equipment, confined spaces, and
machine guarding – lockout and tagout, i.e. ensuring machinery
is fully switched off and de-energized before maintenance work
begins. Gränges also strives to minimize employee exposure to
chemicals and performs chemical risk assessments to ensure
employees use alternatives that are safe and environmentally
sound.
The company’s safety strategy is to prevent workplace injuries
through better understanding how work is performed in relation
to hazards and the associated risks. Job safety analysis is carried
out by experts and the people who do the job. This involves identi-
fying hazards associated with repetitive and non-repetitive work
tasks, with the purpose to assess the risk of injuries and develop-
ing action plans to manage and mitigate these risks. Actions are
coordinated and prioritized by management and safety represent-
atives. To prevent and correct actions, Gränges performs a root-
cause analysis for all recordable accidents and injury-free and
first-aid events with severe potential consequence and a review
of effectiveness should be done within three months.
Safety reporting and follow-up
Gränges’ production facilities drive structured employee engage-
ment programmes with measurable and relevant leading indica-
tors, including a walk-observe-communicate programme where
employees and senior management observe activities and discuss
risk behaviour and improvements. All incidents and accidents are
registered and classified with actual and potential consequences
by employees in local incident reporting systems. Safety perfor-
mance is reviewed by management weekly and monthly, and
site-specific safety targets are set as part of the business plan-
ning cycle.
Safety training and health services
Gränges works to improve health and safety awareness and skills.
This includes providing regular health checks and training in
0
60
120
180
1918 20 2117
Number of lost workdays per
million hours worked
2025
target
Severity Rate, 2017–2021
0
2
4
8
6
1918 20 2117
Number of recordable accidents
per million hours worked
2025
target
Total Recordable Rate, 2017–2021
machine safety, personal protective equipment, fire safety, first
aid, and emergency response. All employees are covered by
accident and sickness insurance. Comprehensive safety training
is carried out for all employees and contracted workers at least
once a year, and regular courses are provided for production
employees, management and new employees who also attend
safety training before starting their position. Production employ-
ees also receive specific safety training covering aspects such as
hand and finger injury prevention.
Sharing best practice
Gränges actively communicates safety-related information to
spread awareness of incidents and prevent them from happening
again. To share best practice and harmonize work processes, the
company generally conducts internal safety assessments every six
months at the sites, focusing on the “critical five” hazard catego-
ries, fire safety and environmental matters. Corrective actions are
incorporated into the location’s improvement and reported to the
regional safety committees. In 2021, Gränges initiated monthly
meetings with all plants to review safety performance. In these
meetings, accidents and incidents with high potential risk are
covered and good safety practice are exchanged between the loca-
tions. Gränges also collaborates and shares knowledge with other
companies through industry associations to promote better safety.
One such example is the European Aluminium task force for safety.
Note: 2017–2020 exclude Gränges Konin and Gränges Powder Metallurgy.
40 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Diverse and high-performing teams
CAREER AND LEADERSHIP
Structured recruitment process
Gränges strives to offer good working conditions and interesting
career development opportunities to attract, develop and retain
talented people. The company runs a structured recruitment pro-
cess to ensure the company hires competent and skilled employ-
ees. In the recruitment process, all else being equal, individuals
from underrepresented groups are given recruitment priority to
promote a diverse workforce.
Competence development opportunities
Competence development is an important area to the success of
Gränges. The company runs a structured performance manage-
ment process including training and personal development. All
employees, excluding those working in Gränges Konin, have
annual performance and development discussions as well as
compensation reviews. Gränges Konin has an ambition to intro-
duce annual performance and development discussions from
2022, starting with white-collar employees. To ensure efficient
and continuous competence development, talent management,
and succession planning, all employees should also have an
individual development plan.
Gränges strongly encourages employees at all levels to partici-
pate in job-related training and development activities to enhance
skills and grow as professionals. The company conducts compe-
tence development and leadership training in line with regional
needs and works actively to provide career and leadership oppor-
tunities for employees with the aim to fill every second manage-
ment position job opening with internal candidates.
In 2021, Gränges’ employees conducted the global trainings in the
Code of Conduct, anti-corruption (only white-collar employees) as
well as information security. In Gränges Konin, classroom train-
ings for blue-collar employees were cancelled in mid-December
due to COVID-19 restrictions. Instead, printed training materials was
distributed and individual training was conducted. Gränges Ameri-
cas conducted leadership training at all locations and Gränges
Asia completed internal Environmental, Health and Safety (EHS)
training and quality training for line operators.
During the year, Gränges also initiated a more structured
approach to collect data for training hours, which will provide a
good understanding of the baseline within the organization.
DIVERSITY AND INCLUSION
An inclusive corporate culture
Gränges’ corporate culture and core values – committed, action
oriented, innovative, and accessible – guide employees in their
daily actions and lay the foundation for conducting business
responsibly, ethically, and open-minded. Being accessible for
example entails that employees should promote equal opportuni-
ties and fairness at the workplace, as well as have an unbiased
attitude. In 2021, Gränges Konin conducted training for white col-
lar employees focusing on spreading awareness of Gränges’ cor-
porate culture and values.
Gränges strives to provide a non-discriminatory and inclusive
work environment which leverages employees’ different perspec-
tives, experiences, and ideas. A multifaceted workforce also
reflects the international market in which Gränges operates.
Gränges is committed to ensuring that employees are motivated and engaged. By being an open and inclusive
employer, with zero tolerance of discrimination, Gränges strives to provide a diverse workplace where
employees can realize their full potentials and contribute to developing a high-performing organization.
In 2021, Gränges had on average 2,648 employees (1,647)
1)
of which 13 per cent were women.
>> PERFORMANCE SUMMARY
Key performance indicator
2025
target
2021 (2020)
performance
1)
Performance and development
discussion, % of employees
100 67 (100)
Women in senior management
2)
, % ≥30 18 (21)
Employee engagement index
3)
, 0-100 ≥85 – (78)
1) 2020 excludes Gränges Konin and Gränges Powder Metallurgy.
2) Employees eligible to participate in Gränges’ long-term incentive (LTI) programme.
3) The employee survey is conducted every two years and was not conducted in 2021.
Comment: In 2021, 67 per cent of all employees had an annual performance
and development discussion, which corresponds to 100 per cent excluding
Gränges Konin and Gränges Powder Metallurgy. These two sites are in the
process of implementing a structured approach to conduct performance
discussions starting from 2022.
1) Excluding Gränges Konin and Gränges Powder Metallurgy.
41 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Important diversity aspects for Gränges include gender equality
as well as ethnic diversity, where the latter aspect is mainly appli-
cable for Gränges Americas. Inline with the company’s global
Diversity Policy, no employee should experience discrimination
based on gender, age, world view, background, sexual orientation,
ethnicity, physical ability, or similar.
The strive for gender balance
Improving the gender balance in the total workforce and among
senior management is a key priority across the organization. The
company aims to expand the number of women both in blue-collar
and white-collar positions and strives to further develop and pro-
vide career opportunities for women and to build a larger internal
pipeline of women candidates when recruiting to senior manage-
ment positions.
Gränges
sees clear challenges connected to improving the
gender balance including for example low employee turnover rates
in some regions and high turnover rates in other regions, operating
in rural areas where it may be more challenging to find the right
competence, as well as operating in countries where gender roles
largely are traditional. The company has also experienced a
reduced workforce in some production facilities due to weaker
market conditions.
Actions to be aware of biases
Gränges manages diversity and inclusion matters mainly on a
local level, but group-wide principles lay the foundation for prior-
itized activities. The company for example has a principle to have
at least one woman in the final interview round of each recruit-
ment process, and in cases where there are few or no women
applicants, the recruitment process is expanded to a broader
search. Other principles include to conduct structured termina-
tion interviews to follow-up gender related issues, to map and
analyse response gaps between men and women in the employee
survey, and to offer awareness activities to increase employees’
understanding and identify potential diversity biases.
Gränges Finspång performs annual gender-related disparity pay
analysis and in 2021 it was confirmed that a few non-objective
gaps were identified which were instantly corrected.
EMPLOYEE WELLBEING
Promoting health and wellbeing
Having engaged and healthy employees is a prerequisite for an
innovative, competitive, and productive organization, and misman-
agement can lead to significant cost implications both for Gränges
and its employees. Gränges follows up on employees’ general
motivation and wellbeing via the annual performance and develop-
ment discussion, and the company also conducts employee
surveys every two years to track status. The last employee survey
was conducted in 2020.
As a result of the COVID-19 pandemic, Gränges has enforced its
focus on employee wellbeing. Actions include flexible and remote
work options, travelling guidelines and updated meeting policies.
To further promote health and wellbeing, Gränges offers occupa-
tional health services on- and off site, for example flexible work
options, first-aid care, wellness grants, support to employees who
have recurrent illnesses, regular health checks, and access to
medical care at licensed medical providers. Gränges also offers
non-occupational support such as dietary advice, stress reduc-
tion and mental health. Gränges maintains the confidentiality of
all personal health-related information and keeps medical infor-
mation and journals in compliance with local legislation.
Women in senior management,
2017–2021
0
10
30
20
%
1918 20 2117
2025
target
0
10
20
30
%
1918 20 2117
Women in total workforce,
2017–2021
Average number of employees
per country, 2021
In 2021, Gränges Finspång arranged “The future day” with
active participation from all employees. The purpose of the
activity was to focus on employeeship and how each employee
can contribute to the development and strategic direction
ofthe company focusing on increasing knowledge of the
company’s 2025 targets, company culture, and core values.
CASE
“The future day”
Note: 2017–2020 exclude Gränges Konin and Gränges Powder Metallurgy.
Poland, 31%
USA, 30%
China, 19%
Sweden, 18%
Other countries, 1%
42 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Ethical business practices
ETHICS AND ANTI-CORRUPTION
Global Code of Conduct
Gränges’ global Code of Conduct outlines ethical principles and
gives guidance to employees on how to act and conduct business
responsibly. The Code of Conduct is available in local languages
and applies to all employees and board members, temporary
staff, intermediaries, agents, or others acting on behalf of
Gränges. The Code of Conduct is based on international stand-
ards
1)
on human rights, labour conditions, the environment, and
anti-corruption, including the UN Global Compact and its ten prin-
ciples. It includes practical recommendations on how employees
should act in different situations, as well as definitions and links
to other policies. In 2021, Gränges launched a Polish and French
version of the Code of Conduct.
Counteracting corruption
Gränges’ principles and efforts to prevent bribery and other types
of corruption are summarized in the global Anti-Corruption Policy.
As corruption can prevent economic development, distort compe-
tition, increase costs, and damage confidence and reputation,
Gränges has zero tolerance and will always act rapidly, stringently,
and vigorously on discovering corruption or unethical behaviour. It
would be costly for Gränges as a company as well as for individu-
als and could lead to imprisonment and fines. Gränges also
requires that significant suppliers
2)
commit to principles about
prohibition of corruption, bribery, and improper benefits as out-
lined in the company’s Supplier Code of Conduct or an equivalent
standard. Read more on page 35.
Annual trainings
To ensure effective implementation of the Code of Conduct and
Anti-Corruption Policy, and in line with Gränges’ 2025 targets,
the company conducts annual trainings covering all employees,
Gränges’ Board of Directors as well as contracted workers.
The trainings, which are updated annually, combine facts and
guidelines with practical ethical dilemmas.
Detecting irregularities
Gränges has an externally managed Whistleblower function which
can be accessed via the company’s intranet, the external website
or by telephone. The function aims to detect irregularities that
may seriously harm Gränges’ business or employees, and it ena-
bles employees and external business partners to provide infor-
mation anonymously and without fear of retaliation. By quickly
uncovering and remediating irregularities, Gränges is in a better
position to deal with the underlying causes before they become
unmanageable. Gränges takes great consideration of the protec-
tion of personal privacy and handles submitted information in line
with applicable legislation and regulation.
In 2021, there were two cases (eight) reported through the
Whistleblower function whereof one related to internal working
conditions and the other one is under investigation. No case quali-
fied as a whistleblower case in line with the GDPR regulation on
storing and processing of personal data. No confirmed corruption
incidents were detected and no business contracts were
breached or not renewed due to corruption.
Ensuring effective implementation
Gränges regularly conducts internal audits of its local businesses,
including effective implementation of policies such as the Code of
Conduct, Supplier Code of Conduct and the Anti-Corruption Policy.
The internal audit programme includes criteria to ensure aware-
ness of the policies and the Whistleblower function, that relevant
participants have conducted training in the Code of Conduct and
anti-corruption and verifies that the Supplier Code of Conduct has
been implemented and signed by suppliers.
In 2021, one internal audit was conducted in Gränges Konin. If
needed, Gränges also engages a third-party to conduct due
diligence. No due diligence was performed in 2021.
Gränges is committed to running its business in an ethical and responsible way and being an ethically sound
partner in all its relations and in the societies in which the company conduct business. Gränges never accepts
corruption and will always act rapidly, stringently, and vigorously if discovering corruption or unethical behaviour.
>> PERFORMANCE SUMMARY
Key performance indicator
2025
target
2021 (2020)
performance
1)
Code of Conduct training,
% of employees
100 100 (100)
Anti- corruption training,
% of white-collar employees
100 100 (100)
1) 2020 excludes Gränges Konin and Gränges Powder Metallurgy.
Comment: In 2021, 100 per cent of all employees conducted the group-
wide Code of Conduct training and 100 per cent of all white-collar
employees conducted the anti-corruption training. A combination of
online, classroom, and individual training was used.
1) UN Global Compact, UN Universal Declaration of Human Rights, Sustainable
Development Goals, and the OECD Guidelines for Multinational corporations.
2) All metal suppliers and other suppliers with a purchase value above SEK 5 million
or equivalent in local currency.
43 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
44 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Reasons to invest in Gränges
Total shareholder return vs index
• Global presence in attractive niche markets. Solid, long-term customer relations.
• Committed to sustainability as business driver. Industry-leading ESG
1)
performance.
• Competitive advantage based on innovation, best-in-class technologies, and operational excellence.
• Well positioned to benefit from the regionalization of supply chains, the electrification of the
transportation industry, and the global need for more sustainable solutions.
• Long track record of stable earnings growth and healthy cash generation together with a responsible
balance sheet management.
“ As a long-term owner of Gränges, we support the company’s journey towards an
even stronger market position through technically advanced products, continuous
product innovation, and a strong understanding of customer needs. Gränges’
genuine sustainability commitment and strong sustainability performance further
strengthen the company’s competitiveness and make Gränges a role model.”
Jannis Kitsakis, Senior Portfolio Manager at The Fourth Swedish National Pension Fund (AP4),
representing thelargest shareholder in Gränges.
Sales volume and adjusted operating profit
0
100
300
200
500
400
20 21191817
ktonnes SEK million
North and
South America
Europe
Asia Pacific
Adjusted operating profit
0
200
600
800
400
1,000
1) ESG = Environmental, Social, Governance.
SEK
Volume,
thousand
0
5,000
10,000
15,000
20,000
0
40
80
120
160
Turnover in Gränges share
Gränges
OMX Stockholm GI (OMXGI)
2014
Oct
2015 2016 2018 20192017 2021 2022
Feb
2020
45 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
The share and owners
Gränges’ shares are traded on Nasdaq Stockholm in the Mid Cap segment since October 2014.
They are included in the Automobile & Parts category and traded under the ticker GRNG. Since
the listing, Gränges’ shareholders have received a total return of 207 per cent, including the
reinvestment of annual dividends.
Since the listing of the Gränges share in October 2014 until the
end of February 2022, the share price has risen by 164 per cent.
During the same period, shareholders have received a total return
of 207 per cent, including the reinvestment of dividends.
During 2021, the share price increased by 5.89 per cent. At the
end of 2021, the share price was SEK 106.10, corresponding to a
market capitalization of SEK 11.3 billion. The highest price in
2021 was noted on 18 March at SEK 124.90, and the lowest price
was SEK 92.15 on 2 November. The average daily turnover was
299,232 shares (287,428) and total turnover of shares during the
year was approximately 76 million (72).
Share capital and ownership
The share capital in Gränges amounts to SEK 142 million, distrib-
uted among 106,308,618 shares, each with a quota value of SEK
1.339775. Gränges has only one class of shares. On 31 December
2021, the number of known shareholders totalled 10,970 (10,375).
The largest shareholder, The Fourth Swedish National Pension
Fund (AP4), held 9.3 per cent of the total share capital, followed by
AFA Insurance with 6.2 per cent, and Swedbank Robur Funds with
4.9 per cent. The ten largest shareholders held 42.7 per cent of the
share capital and foreign-owned share ownership amounted to
50.6 per cent.
The Annual General Meeting (AGM) held on 6 May 2021 resolved,
in accordance with the Board of Directors’ proposal, to authorise
the Board of Directors to, on one or more occasions until the AGM
2022, issue new shares and/or convertible bonds. An issue can be
decided with or without regard to shareholders’ pre-emption
rights. Following this authorisation, a total maximum number of
shares equivalent to 10 per cent of the total number of outstand-
ing shares in the company on the date of the AGM’s authorisation
resolution, may be issued in new share issues and/or through the
conversions of convertible bonds.
There are no other pre-emption clauses, refusal clauses or
other restrictions to the transfer of shares in the company by law,
the company’s articles of association or any other document to
which the company is a party.
Dividend and dividend policy
Gränges’ Board of Directors proposes a dividend of SEK 2.25 (1.10)
per share for the 2021 fiscal year, in total SEK 239 million (117).
The proposed dividend corresponds to 40 per cent (32) of the
profit for 2021. Gränges’ Dividend Policy is to pay a dividend of
between 30 and 50 per cent of the profit for the year. When deter-
mining the dividends, the Board of Directors considers the compa-
ny’s financial position, cash flow and outlook.
Total shareholder return since the IPO
in 2014 until the end of February 2022.
207%
46 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Source: Monitor by Modular Finance AB as of 2021-12-31. Compiled and processed data from various
sources, including Euroclear, Morningstar and the Swedish Financial Supervisory Authority (Finans-
inspektionen). The verification date may vary for foreign shareholders.
For additional investor relations-related questions, please contact:
Oskar Hellström, CFO and Deputy CEO: oskar.hellstrom@granges.com, +46 8 459 59 00.
SHARE CAPITAL DEVELOPMENT
Date Event
Change in number
of shares
Total number
of shares
Change in share
capital, SEK
Total share
capital, SEK
1 Jan 2014 – 37,319,693 – 932,992,325
14 Aug 2014 Decrease in share capital – 37,319,693 –832,992,325 100,000,000
15 Sep 2014 Share split 37,319,693 74,639,386 – 100,000,000
18 Nov 2016 Rights issue 516,000 75,155,386 691,324 100,691,324
4 Apr 2017 Rights issue 20,000 75,175,386 26,796 100,718,120
31 May 2017 Rights issue 337,000 75,512,386 451,504 101,169,624
6 Dec 2017 Rights issue 5,000 75,517,386 6,699 101,176,323
9 Nov 2020 Issue in kind 2,442,268 77,959,654 3,272,090 104,448,413
17 Dec 2020 Rights issue 28,194,804 106,154,458 37,774,700 142,223,113
28 Dec 2020 Rights issue 154,160 106,308,618 206,540 142,429,652
OWNERSHIP
Largest shareholders Shares
Share of capital
and votes, %
Fourth Swedish National Pension Fund 9,864,534 9.3
AFA Insurance 6,643,492 6.2
Swedbank Robur Funds 5,203,611 4.9
Handelsbanken Funds 4,754,272 4.5
Dimensional Fund Advisors 4,352,258 4.1
Allianz Global Investors 3,482,939 3.3
Vanguard 3,323,992 3.1
T. Rowe Price 3,078,748 2.9
Columbia Threadneedle 2,482,719 2.3
Norges Bank 2,211,360 2 .1
Total 10 largest shareholders 45,397,925 42.7
Total other shareholders 60,910,693 57.3
Total 106,308,618 100
SHARE DATA
2021 2020
Earnings, SEK
1)
5.58 4.21
Equity, SEK
1)
65.04 69.13
Cash flow from operating activities,
SEK
1)
9.27 16.38
Share price at end of period, SEK 106.10 100.20
Dividend, SEK 2.25
2)
1.1 0
Dividend rate, % 40.3 32.2
Dividend yield, % 2.12 1.10
1) Calculated on weighted outstanding ordinary shares, diluted.
2) The Board of Director’s proposal to the AGM 2022.
GEOGRAPHICAL DISTRIBUTION
Country
Number of known
shareholders
Share of
capital, %
Sweden 52,471,045 49.4
United States 27,974,117 27. 7
Germany 4,424,746 4.2
Great Britain 3,064,265 2.9
Australia 2,767,396 2.6
Total other 7,938,599 7. 5
Anonymous n/a 5.7
Source: Monitor by Modular Finance as of 2021-12-31.
SHARE DISTRIBUTION
Number of shares
Number of known
shareholders
Share of
capital, %
1–500 7,835 1.1
501–1,000 1,318 0.9
1,001–5,000 1,393 2.9
5,001–10,000 175 1.2
10,001–50,000 148 3.0
50,001–100,000 22 1.5
100,001– 79 83.7
Anonymous n/a 5.7
SHARE INFORMATION
Market Nasdaq Stockholm
Segment Mid Cap Stockholm
Ticker symbol GRNG
ISIN code SE0006288015
Listed since 10 October 2014
Currency SEK
Number of shares 106,308,618
Risk management
As a Group with operations in dierent parts of the world, Gränges is exposed to
various risks and uncertainties. Gränges’ risk management process entails to identify,
assess and reduce risks related to the Group’s business and operations.
Gränges works actively with risk management to monitor and minimize risks in a structured and proactive
manner. On a Group level, Gränges’ risk committee, consisting of Group Management members, identifies
and assesses risks within the Group and normally holds sessions twice a year. Risks are also managed locally
as a part of daily operations where key risks are raised to the regional management teams and mitigation
measures are implemented. Risk reporting systems are in place at the production sites. Gränges maintains
adequate insurance coverage in relevant areas. In 2021, Gränges reported to CDP for the first time. As part of
the preparations, Gränges held a risk- and opportunity workshop focusing on climate related risks with
selected representatives from senior management.
Monitoring
Risk mitigating
activities
Identification
and analysis
>> MARKET RISKS
Market risks are managed and controlled by the corporate functions and by the regions in accordance with established guidelines and procedures.
RISK DESCRIPTION AND CONSEQUENCE RISK MITIGATING ACTIVITIES
MACRO ECONOMIC AND MARKET DEVELOPMENT
Demand for Gränges’ products and services depends on the general economic climate in the end-customer markets in which it
operates, as well as global factors such as global growth, currency fluctuations, tariffs and other global trade restrictions,
commodity prices and inflation.
Light vehicle production is an important driver of Gränges’ sales as the automotive sector accounts for about 40 per cent of
Gränges’ total sales volume. The general activity within building, construction and increased demand for improved indoor cli-
mate are also important drivers, as about 22 per cent of Gränges’ sales go to the HVAC industry.
An increased focus on products’ sustainability performance is leading to changed market conditions, resulting in high
expectations with respect to the ability to deliver sustainable product offerings. Although Gränges is well positioned to benefit
from this development there is a risk that other technologies will emerge over time and that Gränges’ current and future tech-
nology become outdated. If Gränges does not follow, develop and participate in the transition to a sustainable society, it could
have a negative impact on the company’s reputation, or if Gränges does not manage to meet the demand for new products, it
could adversely affect the company’s ability to win procurements and lead to reduced demand and decreased revenue and
profits.
Changing market conditions and trends resulting, for example, from a changed external environment and security climate,
outbreak of pandemics or infectious diseases, economic conditions, changed political priorities, new legislation as well as
technical development and digitalization may lead to reduced demand for Gränges’ products and services. Reduced demand
from customers and sectors to which Gränges offers its products and services could affect Gränges’ production levels, invest-
ment plans and financial ability.
In a recession, there is a risk that Gränges will find it difficult to maintain profitable price levels and in obtaining payments
in time. A negative economic development and changes in customers’ purchasing behaviours may have a significant negative
impact on Gränges’ operations, results and financial position.
Gränges may be affected by trade restrictions introduced by authorities in countries where it has operations, or countries
where Gränges may operate in the future, and by sanctions or other measures by associations or organizations such as the EU
and the UN.
• Global presence: Gränges’ presence in three regions balances the shift in demand throughout the economic cycle.
• Continuous monitoring: Gränges continuously monitors the development in different markets, and proactively assess exter-
nal risks and opportunities that may influence the company’s strategy and operations.
• Diversified portfolio: A diversified product portfolio reduces Gränges’ cyclicality and reduces the company’s dependence on a
single customer industry.
• Research and innovation: Extensive R&I enables Gränges to continue to develop advanced materials and solutions to meet
new demands.
• Customer collaboration: Gränges works closely with customers in product development for future applications to ensure a
continued high quality and adherence to customer requirements.
• Global customer satisfaction surveys: Gränges conducts customer satisfaction surveys globally to track customers’ percep-
tions of the company and its products.
• Contingency and mitigating plans: Gränges’ contingency and mitigating plans were activated in 2020 due to COVID-19 pan-
demic. In 2020 and 2021, measures have been taken to mitigate the negative impact of COVID-19 pandemic and to adapt the
operations to the new market situation. Gränges’ highest priority is to ensure the health and safety of the employees, custom-
ers and other stakeholders while maintaining continuity and developing the business.
47 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
RISK DESCRIPTION AND CONSEQUENCE RISK MITIGATING ACTIVITIES
SUPPLY CHAIN
Supply chain risk are related both to transportation and logistics as well as social, environmental and ethical risks in Gränges’
supply chain. Mismanagement of these risks may lead to undesirable effects on the supply of input materials for Gränges. It
can also lead to reputational losses.
Social risks and human rights violations are mainly related to indigenous rights in the extraction, mining and smelting activ-
ities. Extractive activities also carry a risk of forced and child labour, although there are few reports of this in aluminium min-
ing. Health and safety risks are present throughout the value chain.
Environmental risks mainly occur in mining activities where there are risks related to water consumption, leakage, noise
from heavy vehicles, air emissions, and significant alterations to the landscape due to open-pit mines.
It can also contribute to biodiversity loss, increased carbon emissions, and soil erosion. Further, refining and smelting activ-
ities are energy- and water-intensive processes and much of the energy comes from hydroelectricity which is a renewable
source but has other environmental and social impacts and risks.
Corruption risks are mainly linked to mining approvals, regardless of the country’s level of economic development or politi-
cal system. A few countries in Gränges’ supply chain are deemed to have a higher risk for corruption, according to Transparency
International’s Corruption Perceptions Index for 2021.
• Supplier Code of Conduct: Gränges has a Supplier Code of Conduct which all significant suppliers are requested to sign. The
intention is to increase awareness and improve transparency of responsible and sustainable business practices in Gränges’
supply chain. By signing, suppliers declare to observe all applicable laws and regulations, including the ten principles of the
UN Global Compact, and to promote the implementation of these principles in their own supply chains.
• Sustainability risk screening and desktop assessments: Significant suppliers are annually screened in a desktop tool for
potential environmental, social and corruption risks depending on the purchasing category and country of origin. Suppliers
identified to have a potential medium or high sustainability risk are required to complete an evidence-based and third-party
verified desktop sustainability assessment so that Gränges can better understand their performance and risk profile.
Gränges currently works with EcoVadis to conduct such assessments.
• Follow-up and engagement: The results from the desktop assessments are integrated into the local supplier review proce-
dures, e.g. supplier scorecards, discussions and on-site visits, as applicable locally. The company also conducts on-site sup-
plier audits depending on suppliers’ strategic importance and performance. Such audits mainly focus on ensuring compli-
ance with Gränges’ quality and delivery requirements, but sustainability criteria are also included.
REPUTATION AND CUSTOMER RELATIONSHIPS
Reputation and customer relationships risks mainly relate to Gränges’ dependence on its reputation and brand to obtain new
customers, suppliers and partners and to maintain such existing relationships.
Gränges’ reputation and brand are above all dependent on the reliability and quality of its products and services. Deficient
quality in Gränges’ products could lead to recalls from end-customers and result in significant costs if insurance policies are
not sufficient or cannot be sufficiently utilized. If Gränges’ products and services are not in compliance with laws, regulations
or decisions by authorities, or if they cause harm to person and property, there is a risk that a customer may choose to end the
relationship with Gränges.
The risk of negative publicity and negative opinions has increased with the many information and media channels available,
making it more difficult for Gränges to control how its brand is perceived in the markets. A loss of reputation due to negative
publicity about Gränges’ business could result in the loss of customers and reduced profits.
Extensive negative publicity on regulatory or legal proceedings, violations of laws or regulations, failure to meet important
contractual obligations or deadlines, could damage Gränges’ reputation and brand and undermine customers’ and other stake-
holders’ trust in Gränges.
• For information on how Gränges mitigates risks related to reputation and customer relationships, see risk mitigating activi-
ties in operational risks on pages 49–51.
ENERGY PRICES
Energy price risks relate largely to changes in energy prices that can adversely affect Gränges’ operating profit. Long-term
changes in market prices will eventually affect Gränges’ operating profit if changes are not transferred to the customers.
Both re-melting and casting of aluminium are energy-intensive processes and energy costs are Gränges’ third largest
expense, after metal and personnel costs. Gränges primarily uses energy in the form of natural gas, electricity and liquefied
petroleum gas, and mainly uses energy in furnaces where aluminium is re-melted. The most energy consuming step in
Gränges’ production is in the furnaces where aluminium is re-melted, either through combustion or induction. Energy prices
have historically varied and may continue to vary significantly as a result of political and economic factors outside Gränges’
control, such as access to and demand on local and regional markets, government regulations and the introduction of addi-
tional energy taxes.
Gränges’ ability to manufacture products may be temporarily affected by disruptions in energy deliveries. Such disruptions
may also arise due to loss of energy supply agreements or if Gränges fails to enter into new energy supply agreements on com-
mercially acceptable terms.
Natural disasters and similar events could affect the energy grid and disrupt the energy supply to Gränges’ production
facilities.
• Hedging and delivery agreements: Gränges uses hedging and delivery agreements to secure future energy prices and supply.
Financial hedges and physical fixed-price contracts may be used up to two years prior to delivery.
• Energy reduction: Gränges is working actively to reduce energy consumption from own operations and thereby reduce the
energy price exposure. Furthermore, Gränges is diversifying and optimizing the energy mix by reducing the dependence on
natural gas. Gränges is also able to mitigate the effect of increased energy prices through pricing mechanisms in sales
agreements.
48 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
RISK DESCRIPTION AND CONSEQUENCE RISK MITIGATING ACTIVITIES
POLITICAL
Political risks relate mainly to changes in trade legislation or sanctions against individual organizations or countries where
Gränges or its suppliers have operations or market activities.
Gränges’ production sites are located in Sweden, Poland, France, China and the US, and its customers are located in around
40 countries. Markets and operations are affected by the political and economic environments within and between these
countries. Political risks affect Gränges’ ability to meet the demands of its customers. Such influencing factors may limit the
company’s operations, delay or prevent planned investments or otherwise affect Gränges’ ability to meet its customers’ needs
in short and long term, and thereby affect Gränges’ operations and financial results.
• Continuous monitoring: Gränges closely monitors political risks, particularly regarding legislation for cross-border trade.
• Flexible production set-up: Gränges has production sites in three regions which adds flexibility to transfer production and
re-route supply flows should political changes have a negative impact on the current setup.
CLIMATE
Climate transition risks include emerging regulation to incentivize reduced carbon emissions as well as carbon pricing mecha-
nisms which could lead to higher costs for Gränges, including increased costs in carbon taxes, increased energy and material
prices as well as increased potential costs for investments in lower- emissions technology. Other transition risks include shift-
ing customer and consumer preferences towards products carrying a lower climate impact, which could reduce the demand
for Gränges’ products.
Climate physical risks are mainly related to acute physical risks with increased severity and frequency of extreme weather
events. This could disturb not only direct operations but also the infrastructure supporting the production, including electricity
supply and transportation. The potential financial consequences of extreme weather events may include decreased revenue
from reduced sales volumes and increased costs to repair potential dagames at the sites.
• Continuous monitoring: Gränges closely monitors changes in environmental policy and legislation.
• Climate strategy: Gränges works actively to take product stewardship and reduce climate impact along its value chain.
The company has set ambitious 2025 climate targets to reduce the impacts of its own operations, purchased energy as well
as purchased materials.
• Sustainable innovation: Gränges works to incorporate sustainability aspects into product development with a focus on prod-
ucts’ full life-cycle performance.
• Product stewardship: Gränges works to leverage the advantages of aluminium and develop sustainable product and solu-
tions which can improve customers’ and end-users’ climate and sustainability performance from both an operational and
product perspective. Gränges calculates and declares sustainability impacts on a product level, which enables customers to
understand, evaluate and compare Gränges’ products from a sustainability perspective.
• Emergency planning: Emergency planning and preparations are integrated in management systems, maintained at the site
level including assessment of emergency situations and crisis management action plans.
>> OPERATIONAL RISKS
Operational risks are managed and controlled by the corporate functions and by the regions in accordance with established guidelines and procedures.
RISK DESCRIPTION AND CONSEQUENCE RISK MITIGATING ACTIVITIES
PRODUCTION DISRUPTION
Production disruption risks mainly relate to Gränges’ dependence on sufficient input materials, such as primary aluminium,
recycled aluminium, alloying elements and indirect materials. Insufficient supply would imply that Gränges cannot produce
certain products.
Production risks are also connected to critical machine breakdowns or calamities such as a fire, which could damage
equipment.
Gränges may also be affected if suppliers suffer from financial or operational difficulties, if they raise their prices or are
unable to deliver as agreed. Incorrect, delayed or missed deliveries from suppliers could lead to delays or shortcomings in
Gränges’ products. Reductions or closures by larger suppliers could impact Gränges’ ability to manufacture and deliver prod-
ucts. If any of these risks were to be realized, it could result in increased costs, delayed deliveries and possible claims from
customers.
Damage to suppliers’ and Gränges’ production plants, caused, for example, by stoppages, disruptions in any part of the pro-
duction process, such as breakdowns, access to spare parts, weather conditions, geographical conditions, labour conflicts,
wars, terror activities, natural disasters, fire and pandemics, could have negative consequences. These negative consequences
could consist of direct damage to property, but could also give rise to production stoppages, preventing or making it more diffi-
cult for Gränges to meet its commitments to its customers.
Unplanned stoppages in production facilities could result in defective products or products of inferior quality. Power fail-
ures or cuts could lead to breakage in the coils in the cold-rolling process, resulting in the need to discard the coils, or could
lead to sparks, which increases the risk of fire.
• Supplier agreements: Gränges has agreements with suppliers in each market to ensure deliveries based on estimated
volumes.
• Own production: Gränges has own cast houses in the production facilities which makes the company less sensitive to supply
issues regarding for example aluminium slabs.
• Maintenance plans and machinery: Gränges has maintenance plans to manage critical machinery. The company also
ensures access to spare parts and service staff to continually maintain critical machinery. Furthermore, Gränges has
invested in state-of-the-art fire protection systems and customary insurance policies.
• Fire protection: As a consequence of the mill fire at the site in Newport, Gränges has made a thorough assessment of its mill
fire protection systems. Since that event, Gränges Americas has worked diligently with internal and external resources to
strengthen its fire protection programs across all three facilities. From an equipment perspective, the fire protection system
at the Newport plant has been upgraded with improvements such as a larger capacity Carbon Dioxide tank and a complete
revamp of the Carbon Dioxide extinguishing system on the mill to include improved detection and additional discharges. In
addition, the water deluge system has been upgraded to improve the density coverage on all areas of the mill to provide
improved backup protection. From a process perspective, the organization continues to work closely with the relevant city fire
departments at each facility to stage fire drills, improve response times, and define clear points of contact in case of an
emergency. From an employee perspective, Gränges Americas has developed and implemented an improved training pro-
gramme for all existing and new employees along with periodic fire drills to ensure adequate employee comprehension of all
training material.
49 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
RISK DESCRIPTION AND CONSEQUENCE RISK MITIGATING ACTIVITIES
QUALITY AND EFFICIENCY
Quality and efficiency risks are mainly connected to defective products and insufficient process stability and are often due to
unplanned stoppages at production plants.
• Operational excellence programmes: Gränges ensures high-quality products and efficient production processes through its
programmes for lean operations. Read more on page 24.
ENVIRONMENT
Environmental risks are mainly related to emissions to water, soil and air or releases of environmentally hazardous substances
resulting from incidents and accidents in Gränges’ production facilities, such as fire, oil spill, or leakages.
Emissions to air, in terms of carbon dioxide, nitrogen oxides and particulate matter, come from burning fossil fuels and par-
ticularly natural gas and liquefied petroleum gas. Emissions of oil are linked to cold rolling operations in which oil is used to
cool down the mill and lubricate the interface between the rolls and the material. Such events may have financial, nonfinan-
cial, as well as regulatory repercussions.
In line with the Aqueduct Water Risk Atlas developed by the World Resources Institute, Gränges’ operations are located in
areas with various water risks. The production sites in Finspång and Newport are situated in areas with low-to-medium risk,
whereas Saint-Avold, Huntingdon and Salisbury facilities are in medium- to-high risk areas. The plants in Shanghai and Konin
are situated in a high-risk area.
Mismanagement of water risks can lead to water shortage and/or bad water quality; however, no water source is currently
considered to be significantly affected by the water withdrawal or discharge from Gränges’ operations.
• Daily monitoring and management: Gränges monitors and manages emissions to air as part of the daily operations. Compli-
ance is a prerequisite for Gränges’ continued license to operate. Local authorities continually monitor compliance to ensure
that emissions of nitrogen oxides, sulphur dioxide, particulate matter, volatile organic compounds (VOC) and, in some regions,
oil emissions, are within permissable limits.
• Incident reporting: Gränges’ employees report environmental risk observations in site-specific incident management sys-
tems. Risks are managed in accordance with standardized routines and integrated as a part of daily operations. Key risks are
raised to the regional management teams and mitigation activities are implemented accordingly. Measures to mitigate envi-
ronmental risks are also integrated in investment and maintenance routines. Gränges takes a precautionary approach to
environmental risks.
• Environmental management certifications: Gränges aims to have all its sites certified in accordance with ISO 14001 (envi-
ronmental management) and ISO 50001 (energy management) certification standards. The sites in Finspång, Saint-Avold and
Shanghai are certified against both standards. The remaining sites are certified in accordance with ISO 14001: Huntingdon,
Konin, Newport (since January 2022) and Salisbury (since 2021).
• Local water management plans: Gränges has set a 2025 target to develop and implement local water management plans in
all its sites.
HEALTH AND SAFETY
Health and safety risks mainly relate to incidents or accidents in the cast house or rolling mills, which can cause damage on
fingers, hands, feet and legs. Another risk is exposure to chemicals, which can be hazardous to employees’ health. There is also
a risk of fire which can lead to explosion or breakdown in a production facility.
Employees and other individuals may be injured if the implementation of safety procedures is unsuccessful or inefficient.
Unsafe workplaces can also lead to increased employee turnover as well as higher operating costs and production interrup-
tions, which in turn could result in increased costs for Gränges. Safety and health incidents can also lead to reputational dam-
ages for the company.
The facilities may be interrupted if Gränges fails to implement safety processes or if implemented processes are not effi-
cient and, if they are not remedied quickly and time-efficiently, could prevent normal execution of the work. Each of the above
can result in financial losses, which could have a negative impact on Gränges’ operations, reputation, financial position or
results.
• Daily monitoring and management: Gränges has strict safety routines and continuously invests in safety measures to
prevent and mitigate workplace accidents and injuries. A 5S system has been implemented in all sites to ensure a clean,
orderly and safe work environment.
• Incident reporting: Gränges focuses on preventing workplace injuries and ensuring safe behaviour. Job safety analysis is
carried out and all incidents and accidents are registered and classified in incident reporting systems.
• Global EHS Policy: Gränges has a group-wide EHS Policy which all employees and contracted workers are required to follow.
The policy includes clear principles related to occupational safety and health.
• Safety certifications: Gränges aims to have all its sites certified in accordance with ISO 45001 (previously OHSAS 18001)
safety management standards. The site in Shanghai is certified against ISO 45001 and the sites in the US, Konin and
Finspång are preparing for ISO 45001 certifications.
• Safety training: Gränges arranges safety training for all employees at least once a year. Targeted safety training is also
carried out for specific safety aspects.
• Best practice sharing: Gränges shares safety experiences and best practice through internal cross assessments, safety
meetings and intranet communication. The company also shares information with external companies through industry
associations.
EMPLOYEES
Employee risks are mainly related to lack of access to and difficulty to attract and retain qualified and skilled employees, due
to high competition on the labour market. Gränges operates in a traditional industry where competition for qualified employ-
ees is high. Job opportunities are located outside metropolitan areas which tends to reduce the number of available qualified
candidates. There are also risks relating to not having a diverse workforce as this is a prerequisite for a productive and innova-
tive organization.
If Gränges fails to attract, develop, retain and motivate qualified personnel needed in the business, it would make it more
difficult for the Group to deliver goods and services in accordance with customers’ expectations. As a result, it could lead to
significant future loss of revenue, increased costs and lack of diversity, which may have a significant negative impact on
Gränges’ operations, earnings and financial position.
• Attractive workplace: Gränges strives to offer good working conditions and interesting career development opportunities to
attract, develop and retain qualified employees. The company runs a structured recruitment process to ensure the company
hires competent and skilled employees.
• Leadership development: Gränges conducts regular performance and development discussions to ensure motivated and
engaged employees. The company also works actively with training opportunities, talent management and succession plan-
ning as well as strengthening the corporate culture and core values.
• Local diversity plans: Gränges supports an inclusive work environment which leverages employees’ different perspectives,
experiences, and ideas. In the recruitment process, all else being equal, individuals from underrepresented groups are given
recruitment priority. Gränges regularly trains its employees on the importance of inclusion and having a diversified work-
place.
• Health and wellbeing initiatives: Gränges offers its employees occupational and non-occupational health services. Exam-
ples include access to occupational health care, regular health checks and access to medical care at licensed medical pro-
viders.
50 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
RISK DESCRIPTION AND CONSEQUENCE RISK MITIGATING ACTIVITIES
ETHICAL
Operating in a global business environment can sometimes be challenging as complex market conditions can lead to
situations where employees are uncertain how to act. Risk of corruption and bribery exists in some markets where Gränges
conducts business.
Corruption can prevent economic development, distort competition, lead to increased costs and destroy confidence, repu-
tation and brand. Violations of anti-corruption legislation can result in extensive fines and other sanctions of a criminal, civil or
administrative nature and that Gränges is excluded from participating in public procurement proceedings for extended periods
of time. It could also have a material adverse effect on Gränges’ reputation, operations, results and financial position. Corrup-
tion-related incidents or accusations against suppliers, distributors and other partners with whom Gränges has a business
relationship with could, even if Gränges is not involved, lead to negative publicity, risk damaging Gränges’ reputation.
• UN Global Compact membership: Gränges supports international standards on human rights, labour conditions, the
environment and anti-corruption, including but not limited to the UN Global Compact and its set of ten principles.
• Code of Conduct: Gränges is committed to operating in accordance with responsible, ethical and sound business principles,
and in compliance with all applicable laws and regulations. The company has a group-wide Code of Conduct which employ-
ees and board members, as well as temporary staff, must follow. All employees should annually conduct training in the Code
of Conduct.
• Anti-Corruption Policy: Gränges also has a group-wide Anti-Corruption Policy which all Gränges’ employees and board
members must adhere to. These individuals must also take reasonable steps to ensure that Gränges’ independent business
partners, including suppliers, customers, and joint-venture partners, do not engage in corruption or other illegal or unethical
activities related to their business with Gränges. All white-collar employees should annually conduct training in anti-corrup-
tion. The company will always act rapidly, stringently and vigorously upon discovering corruption or other unethical behaviour.
• Whistleblower function: Gränges has a Whistleblower function which is managed by an external company and can be
accessed online or via telephone. Through the function, employees and external business partners can report irregularities or
concerns of misconduct anonymously.
COMPLIANCE AND LEGISLATION
Gränges operates in many different markets, with local laws and rules. Failure to keep abreast of legislative and regulatory
requirements may cause financial liabilities or even loss of permits. If employees or individuals who work on Gränges’ behalf
violate laws and rules, it could have negative consequences for Gränges.
The company may be affected by events that damage confidence in the company, its operations or employees, for example if
environmental, quality, or ethical requirements are not met in the manner prescribed by Gränges.
Misconduct, fraud, violation of laws and regulations, or other improper acts carried out by Gränges’ employees, representa-
tives or partners could have an adverse effect on Gränges’ business and reputation. Such action could involve a breach of
applicable regulations on public procurement, secrecy, prohibition against bribes and other corruption, regulations on
employee compensation and other contractual costs, regulations against lobbying or similar activity, regulations on internal
control of financial reporting, laws and regulations on the environment, trade, competition and monopoly prevention and other
applicable laws and regulations. If Gränges does not comply with applicable laws and regulations or if misconduct is commit-
ted, the company could be subject to penalties, fines or cancellation of or exclusion from agreements. This could adversely
affect Gränges’ reputation, which would make it more difficult for the company to win procurements and lead to decreased
revenue and profit.
Gränges is dependent on its employees, suppliers, distributors and other partners following the law and complying with
regulations, internal steering documents and policies. Violation of or failure to comply with applicable laws and regulations
could adversely affect Gränges’ business and reputation. Such action may, for example, include non-compliance with laws and
regulations relating to public procurement and competition, money laundering, IT security and data protection, corporate gov-
ernance, export controls and sanctions, IFRS and other regulations relating to accounting and financial reporting, the environ-
ment and work environment, business ethics and equal treatment.
Since Gränges’ business is global, it is complex and time-consuming to monitor and verify compliance with internal policies
and codes of conduct throughout the organization. If Gränges’ employees, suppliers, distributors or other partners are in seri-
ous violation of existing law and internal and external policies, or in some way act in a manner that is not consistent with the
level of business ethics and integrity that Gränges has undertaken to uphold, this could have material adverse effect on
Gränges’ reputation, business, profits and financial position.
• Continuous monitoring and management: Gränges continuously monitors legislative and regulatory developments through
external partners, and through membership in various industrial organizations. The company observes all applicable local
and international laws and regulations.
• Communication and training: Gränges regularly informs its employees of relevant changes that the company must follow.
The company also trains relevant employees to ensure good knowledge and understanding of legal risks and requirements.
IT SECURITY
IT risks relate to disruptions in important IT systems or the digital infrastructure, which could have a direct impact on
production, financial reporting and other important business processes. Gränges is therefore exposed to risk relating to inter-
ruptions and disruptions in its IT infrastructure caused by computer viruses, power failure, human or technical errors, sabo-
tage, weather or nature-related events, or problems caused by failures in care and maintenance. IT attacks, errors or damage
to IT systems, operational disruptions and incorrect or faulty deliveries of IT services from Gränges’ IT providers leading to
extensive production stoppages could have a material adverse effect on Gränges’ business. It could lead to inability to deliver
products or services in time to customers or other stakeholders, which could lead to financial and reputational losses. Errors in
the handling of financial systems could affect the company’s financial reporting.
The risk of unauthorized intrusion into Gränges’ systems may result in financial losses and other damage. These risks grow
in an increasingly technically complex and interlinked world. Failure to adequately restrict access to information may result in
unauthorized knowledge or use of confidential information.
• IT security management: Gränges has implemented processes to handle IT security and to mitigate risks related to incidents.
These processes are continuously improved according to the latest best practice. The IT environment is proactively moni-
tored, and abnormal patterns are acted upon.
• Regular audits: Gränges conducts yearly audits to identify IT security risks, covering internal and external perspectives.
These risks are raised to Group Management and mitigation activities are implemented accordingly.
• Information Security Policy: Gränges has an established Group Information Security Policy which all employees, including
contractors and board members, must adhere to.
• Communication and training: Gränges conducts mandatory yearly training and informs its employees and contractors con-
tinuously to create information and cyber security awareness and understanding.
51 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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>> FINANCIAL RISKS
Financial risks are managed in accordance with Gränges’ Financial Management Policy. Gränges uses derivatives and other financial instruments to reduce financial risks.
RISK DESCRIPTION AND CONSEQUENCE RISK MITIGATING ACTIVITIES
CURRENCY
Currency risk arises as the majority of the Gränges Group sales is denominated in other currencies than SEK, which is the con-
solidation currency of the Group. Sales contracts are mainly denominated in USD, EUR and CNY, depending on where the cus-
tomers are located. Changes in foreign exchange rates have an impact on Gränges’ income statement, balance sheet, and cash
flow. Over time, changes in foreign exchange rates may also affect the company’s long-term competitiveness and earning
capacity.
• Financial Management Policy: Gränges has a Financial Management Policy which regulates the company’s management of
foreign exchange risk.
• Financial instruments: Gränges uses financial instruments, mostly forward contracts, to reduce the company’s exposure to
changes in foreign exchange rates. Gränges is hedging currency exposure in firm commitments up to 18 months. Exposure
related to forecasted commitments is hedged in part up to 24 months in advance.
COMMODITY PRICE
Commodity price risk is primarily related to the price of aluminium, which is Gränges’ single most important input factor and
largest expense. Besides aluminium, Gränges is also using various alloying metals in the production, such as Manganese,
Magnesium, Silicon etc., although in significantly lower volumes. Price changes in aluminium and alloying metals can have a
negative impact on Gränges operating profit in case these are not transferred to the customers.
Aluminium is a standardized, exchange traded commodity. Gränges uses the market prices set on the London Metal
Exchange and Shanghai Futures Exchange as basis both for purchases and sales. In addition to the global metal prices, there
are also regional premiums that reflect the local availability of material which also affect the commodity price exposure.
• Metal Management Policy: Gränges has a Metal Management Policy which regulates the company’s management of com-
modity price risk. The principle is that commodity price risk should be passed on to customers and Gränges shall minimize
the open exposure that occurs due to time lag or other imbalances.
• Natural hedge: Gränges uses matching price clauses in the contractual agreements of purchases and sales, to the extent
possible, to reduce the metal exposure.
• Financial instruments: Gränges uses financial instruments to manage the commodity price risks. Financial hedges are solely
done to reduce exposure and not for the purpose of speculation.
INTEREST RATE
Gränges’ interest rate risk is primarily related to the Group’s interest-bearing liabilities. The majority of Gränges’ interest-bear-
ing debt is denominated in SEK and USD and has floating interest rate. Changes in interest rates may affect the Group’s results
and cash flow and/or the fair value of financial assets and liabilities.
• Financial Management Policy: Gränges has a Financial Management Policy which regulates the company’s management of
interest rate risk and states the target for the duration of the interest-bearing debt portfolio.
• Duration of the interest-bearing debt portfolio: Gränges can adjust the duration of the interest-bearing debt portfolio either
by changing interest terms in underlying agreements or by entering into interest rate swaps. In 2021, no interest rate swaps
were used to prolong the duration.
LIQUIDITY
The liquidity risk is related to Gränges’ ability to meet all payment obligations. Cash flow from operations, future payment com-
mitments, available cash and credit lines are factors that, among others, affect the liquidity risk. The liquidity risks are moni-
tored on Group level.
• Financial Management Policy: Gränges has a Financial Management Policy which regulates a minimum level for available
liquidity, including committed credit facilities from banks.
• Liquidity forecasts: Gränges forecasts future payments and obligations for the upcoming 12 months on a regular basis. This
is compared with incoming cash flows, available credit facilities and a strategic reserve to assess the available liquidity dur-
ing the coming 12 months. Excess liquidity is managed by the Group’s treasury function.
CREDIT
Credit risks are related to counterparties not meeting its obligations towards Gränges. Credit risk can for instance be related to
trade receivables or financial counterparties.
• Continuous follow-up: Gränges’ trade receivables exposure is managed and followed up continuously in local credit commit-
tees. The need for provisions is tested every quarter, or when necessary, according to predefined criterias.
• Credit ratings and agreements: Gränges manages credit risk on financial counterparties by choosing counterparties with a
good credit rating, by limiting the actual exposure per counterparty and by using agreements such as ISDA Master Agree-
ment.
REFINANCING
Refinancing risk is the risk that loans or other financing sources cannot be prolonged or replaced when necessary, or that new
financing only can be achieved at a significantly higher cost.
• Financial Management Policy: Gränges has a Financial Management Policy which regulates the refinancing risk.
• Financial planning: Refinancing risk is limited through adequate financial planning, a robust financing strategy and a defined
leverage target.
52 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Gränges has seven production facilities. The facilities are located in
Shanghai in China, Finspång in Sweden , Konin in Poland, Saint-Avold in
France as well as in Huntingdon (Tennessee), Salisbury (North Carolina),
and Newport (Arkansas) in the US. The production facilities in Finspång,
Shanghai, Huntingdon and Konin also have important centres of excel-
lence for research and innovation, working in close partnership with cus-
tomers.
Gränges has during 2021 established two business areas: Gränges
Eurasia and Gränges Americas. Gränges Eurasia includes three pro-
duction facilities with direct chill casting and hot rolling technology in
Finspång (Sweden ), Konin (Poland), and Shanghai (China), as well as
the newly established Gränges Powder Metallurgy business unit in
Saint-Avold (France). Gränges Americas uses con tinuous casting
technology and includes three production facilities in Huntingdon,
Salisbury, and Newport in the US. Gränges Eurasia is headed by the
CEO and Gränges Americas is headed by the regional President for the
Americas region. The grouping of the businesses into two business
areas, Gränges Eurasia and Gränges Americas, is considered to con-
stitute the Group’s operating segments and is consistent with the
internal reporting submitted to the highest executive decision maker,
which consists of the CEO.
In addition to the wholly owned subsidiaries, Gränges owns 50 per
cent of a Shanghai-based company, engaged in metal stamping.
The Group’s parent company, Gränges AB , is a Swedish publicly listed
company with its head office on Linnégatan 18, Stockholm.
The Gränges share is listed on Nasdaq Stockholm in the Mid Cap
segment.
Summary of the year
During the year Gränges developed new ways of working with suppliers
and customers to create value during the continuing pandemic. Despite
dramatic swings in demand and supply, volume in 2021 grew by almost
40 per cent to 489 ktonnes, a new all-time-high record. Adjusted oper
-
ating profit rebounded to SEK 1,008 million (648), also a record, mainly
driven by improved volume. A slowdown of demand from the automotive
customers due to continued shortage of semiconductors caused severe
supply chain problems for the customers, which had a negative effect
on Gränges’ sales volume. However, most of the other markets showed
a continued strong demand throughout the year.
2021 was the first full year with Gränges Konin, and integration pro-
ceeded as planned. It has alos been a good development in Gränges
Powder Metallurgy. Further, Gränges has continued ambitious invest-
ments in Europe, the US and China.
Board of Directors’ report
The Board of Directors and the Chief Executive Officer of Gränges AB
annual accounts and consolidated accounts for the financial year
1January–31 December 2021.
Operations
industry for more than 125 years, and the company holds leading posi
-
tions in rolled products for thermal management systems, speciality
packaging and selected niche applications.
With customized product development, production capacity, sales
offices and technical support globally, Gränges provides a solid plat-
form to meet customers’ complex needs and new trends in an efficient
and sustainable way. This also creates the foundation for Gränges’
continued expansion. Gränges develops new products, materials, and
solutions in close cooperation with its customers. Gränges’ product
developers and technicians offer advanced technical support and a
wide range of services to customers to optimize the interaction
between Gränges’ products and the customers’ machinery, processes
and applications. Gränges’ validation capabilities enhance customers’
competitiveness by saving time and cost for new product development
and market introduction.
Gränges has long-term customer relationships and in 2021, the
company’s ten largest customers accounted for 45 per cent ofthe
net sales.
Gränges’ geographical end-customer markets are Asia Pacific, Europe
and North and South Americas. The end-customers are found in the
automotive, HVAC, and speciality packaging industries as well as in other
niche markets such as transformers and wind turbines.
Growth is a central part of Gränges’ strategy. The aim is to strengthen
and grow Gränges’ position in core markets as well as expand into adja
-
cent and new areas of aluminium technology, organically as well as by
acquisitions. Gränges invests to increase capacity and develop capabili
-
ties to meet increasing demand and expand into adjacent markets. The
company has made significant expansion investments in its production
facilities during the last years, a development that continued in 2021.
Total annual production capacity has increased from 90 ktonnes in 1999
to 570 ktonnes in 2021 (640 ktonnes after completion of ongoing invest
-
ment programs).
Gränges moved actively to support the green transition and the elec-
tri fication of the transportation industry and the first steps towards
battery applications have been taken during the year.
Further it has been good progress in sustainability, Gränges upgrad-
ed its sustainability targets and issued a sustainability-linked bond.
Jörgen Rosengren assumed the position as President and CEO of
Gränges on 1 October 2021.
Acquisitions
Aluminium Konin
On 6 November 2020 Gränges acquired Aluminium Konin, a Polish flat
rolled aluminium producer. Gränges Konin complements the business
focus and geographic presence of the other European operations very
well. It has technically advanced operations with a very good cost posi
-
tion, strategically located in Central Europe. The determined acquisition
analysis is set out in Note 32 and shows goodwill of SEK 495 million.
Getek
On 17 September 2020 it was announced that Gränges would acquire
theremaining 49 per cent of the shares in Getek GmbH as well as the
business DISPAL
®
, including production assets, intellectual properties
andtrademark DISPAL
®
, from Erbslöh Aluminium GmbH. Getek GmbH
was until 1 October 2020 jointly owned by Gränges (51 per cent) and
Erbslöh (49 per cent) and has since 2017 been classified as a joint oper-
ation. Gränges has recognized its direct right to jointly owned assets,
liabilities, revenues and expenses in the financial statements since 2017.
The acquisition of the remaining 49 per cent shares in Getek GmbH was
done 1 October 2020 and the operation was consolidated in full since. The
DISPAL
®
business was acquired 1 January 2021 and has been consoli-
dated from 2021. The determined acquisition analysis is set out in Note 32
and shows goodwill of SEK 52 million.
Market development
Gränges is an aluminium technology company and a leading global sup
-
plier of rolled aluminium products and solutions for thermal manage-
ment systems, speciality packaging and selected niche applications.
Gränges’ key end-customer markets are the automotive industry repre
-
senting 40 per cent of 2021 sales volume, HVAC representing 22 per cent
of the sales volume, speciality packaging and other niches representing
17 per cent and 21 per cent respectively. Short term, sales to the auto
-
motive industry is primarily driven by the number of vehicles produced.
In the longer term, the increasing share of hybrid and electric vehicles is
expected to have a further positive impact on demand for Gränges’
products. Sales to the HVAC industry is short term driven by consumer
53 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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confidence and the general activity within building and construction,
whereas increased requirements on energy efficiency of HVAC units is
expected to have a further positive impact on the
demand for Gränges’
products in the longer term. The demand for materials for speciality
packaging is relatively stable in its nature and sales to other niche appli
-
cations are largely driven by the general economic activity.
According to the international research firm IHS
1)
, global light vehi-
cle production showed a modest growth during 2021. The recovery from
the COVID-19 pandemic in the first half of the year was offset by supply
shortage of semiconductors in the second half of the year.
North America is Gränges’ most important HVAC market and
Gränges holds a leading position in this market. US shipments of
HVAC units is a key driver of Gränges’ total sales. According to the
North American trade association AHRI
2)
, US shipments of HVAC
units increased by 9 per cent in 2021.
Outlook
The large investments made in the last few years are now beginning to
give returns and will contribute fully from 2023. The timing is good, as
the market outlook especially in North and South Americas and in
Europe is favourable. Gränges also has a global footprint, strong techni
-
cal capabilities, solid long-term customer relations, industry leading
sustainability performance, and a strong team. That puts Gränges in
an excellent position to take advantage of three dominant trends in its
industry: the regionalization of supply chains, the electric vehicle revo
-
lution, and customer demands for more sustainable solutions.
Gränges is committed to making 2022 a year of growth and improved
profitability. There will also be a new plan presented during the year. In it,
Gränges is planning to use its strengths and the promising market trends to
restore the return on capital employed to its target range of 15–20 per cent.
The sanctions against Russia have so far had a limited impact on
Gränges’ operations. However, the unstable situation may change quickly
and in the short term give rise to higher raw material prices and thereby
increased tie up of working capital
Sales
For 2021, Gränges’ sales volume increased by 39 per cent to 488.9 ktonnes
(350.6) compared 2020. Net sales increased to SEK 18,130 million (11,008).
Excluding Gränges Konin, sales volume increased by 18 per cent to
396.5 ktonnes and net sales by 43 per cent to SEK 15,146 million. Changes
in foreign exchange rates had a net negative effect of SEK 720 million.
For Gränges Eurasia, sales volume increased to 263.5 ktonnes (154.0)
and net sales rose to SEK 9,648 million (5,037) during 2021. For Gränges
Americas, sales volume increased to 252.4 ktonnes (219.4) and net sales
rose to SEK 9,488 million (6,748). For Gränges Konin, sales volume was
92.5 ktonnes and net sales amounted to SEK 2,984 million in 2021.
Asia Pacific
Gränges has a leading position in rolled products for brazed aluminium
heat exchangers in Asia Pacific. China is the main market and other key
markets include India, Thailand, South Korea and Japan. For 2021, sales
volume increased to 81.6 ktonnes (69.4) representing an increase of
18 per cent. The automotive business accounted for 85 per cent (86) of
Gränges’ sales in Asia Pacific.
Europe
Gränges has a strong position in rolled products for brazed aluminium
heat exchangers in Europe. The Czech Republic, Sweden, Germany and
Poland are the largest markets. For 2021, sales volume increased to
143.6 ktonnes (58.3) representing an increase of 146 per cent. Excluding
Gränges Konin, sales volume increased by 27 per cent to 56.7 ktonnes
The automotive business accounted for 51 per cent (74) of Gränges’
sales in Europe. The acquisition of Gränges Konin in 2020 has created
a significantly larger and more diversified presence for Gränges in
Europe, and reduced dependency on the automotive market and global
accounts.
North and South America
Gränges has a leading position in rolled aluminium products for HVAC
and is the second largest supplier of rolled aluminium for brazed heat
exchangers to the automotive industry in North and South America. The
company also has leading positions in niche markets such as trans
-
formers and food packaging. Main markets are the US and Mexico. For
2021, sales volume increased to 263.7 ktonnes (222.9) corresponding to
an increase of 18 per cent. HVAC and other business accounted for 80
per cent (81) of Gränges’ sales in North and South America, and the
automotive business accounted for 20 per cent (19).
Operating profit
During 2021, adjusted operating profit increased to SEK 1,008 million
(648), and adjusted operating profit per tonne to 2.1 kSEK (1.8). Excluding
Gränges Konin, adjusted operating profit increased to SEK 852 million.
Adjusted operating margin amounted to 5.6 per cent (5.9). Changes in for
-
eign exchange rates had a negative impact of SEK 124 million in 2021.
Operating profit for 2021 increased to SEK 833 million (584) and
includes items affecting comparability of SEK –175 million (–64)
related to realization of acquired inventory, a write-down of intangible
assets mainly within IT, restructuring costs for corporate functions,
and insurance compensation related to a fire in Newport. For further
information see Note 14.
Profit for the period and earnings per share
For 2021, profit before tax increased to SEK 743 million (454). Finance
income and costs was SEK –92 million (–132). Income tax for the period
was SEK –147 million (–91) which corresponds to an effective tax rate of
20 per cent (20). The profit for the period increased to SEK 595 million
(363) and diluted earnings per share rose to SEK 5.58 (4.21).
Cash flow
For 2021, cash flow from operating activities was SEK 988 million (1,414).
Cash flow from investing activities amounted to SEK –926 million
(–1,736) in the year. This includes additional purchase considerations of
SEK 26 million for the acquisition of Gränges Konin and the purchase
price of 64 million for the acquisition of DISPAL
®
, see Note 32 for further
information about the acquisitions. Total capital expenditure was SEK
836 million in the year. Of this, SEK 380 million relates to investments to
maintain and improve efficiency in current production facilities and SEK
456 million refers to investments related to the expansion of the pro
-
duction facilities.
Cash flow before financing activities amounted to SEK 62 million
(–322) for 2021. Cash flow from financing activities was SEK –793 mil-
lion (1,149) during the year and includes a dividend payment of SEK
–117 million, new loans of SEK 6,466 million and repayment of loans
of SEK –7,061 million.
Cash and cash equivalents amounted to SEK 809 million at
31 December 2021 (SEK 1,473 million 31 December 2020).
Financial position
Gränges’ total assets amounted to SEK 15,767 million at 31 December
2021 (SEK 13,652 million at 31 December 2020). The equity to assets
ratio was 44.0 per cent at 31 December 2021 (43.7 per cent at 31 Dec-
ember 2020).
Consolidated net debt including pension and lease liabilities
was SEK 3,643 million at 31 December 2021 (SEK 3,292 million at
31 December 2020), corresponding to 2.2 times adjusted EBITDA
(2.2 times at 31 December 2020).
Gränges Eurasia
Market and sales
Gränges Eurasia experienced a strong market recovery in 2021 com
-
pared to the previous year, which was highly impacted by the COVID-19
pandemic. The first half of the year showed a significant year-over-year
growth while the growth in the second half was significantly reduced by
the semiconductor shortage which impacted vehicle production nega
-
tively. Sales volume increased by 71 per cent to 263.5 ktonnes and net
sales increased by 92 per cent to SEK 9,648 million. Excluding the
acquired sales from Gränges Konin, the 2021 sales volume increased by
23 per cent and the net sales by 43 per cent. The net sales growth was
primarily driven by market recovery and higher metal prices.
1) Source: IHS, January, 2022.
2) Source: AHRI, November, 2021.
54 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Operating profit
The adjusted operating profit for 2021 increased to SEK 446 million, corre
-
sponding to an adjusted operating profit per tonne of 1.7 kSEK. The increase
was partly driven by acquired operating profit from Gränges Konin of SEK
156 million. Positive effects from increased sales volume and improved
operating costs were offset by a dramatically increased inflationary pres
-
sure on energy and freight costs as well as alloying metals and other input
costs, not yet fully offset by price increases to customers.
Gränges Americas
Ma
rket and sales
Gränges Americas experienced a strong market recovery in 2021. The
underlying demand for HVAC, other niche products and speciality pack
-
aging increased during the year while demand from automotive was
strong in the first half of the year but slowed down in the second half
due to supply chain issues driven by the semi-conductor shortage. In
part, the growth in 2021 was attributed to maximizing capacity invest
-
ments in the Huntingdon facility as well as enjoying a full year of pro-
duction within the Salisbury facility which was temporarily idled in 2020
due to the COVID-19 pandemic. All three plants exceeded previous year’s
sales volume, despite a setback due to a mill fire in Newport in the sec
-
ond quarter. In total, sales volume in 2021 increased by 15 per cent to
252.4 ktonnes and net sales increased by 41 per cent to SEK 9,488 mil
-
lion, both constituting a record for a calendar year.
Operating profit
The adjusted operating profit for 2021 increased by 30 per cent to SEK
655 million (503), corresponding to an adjusted operating profit per
tonne of 2.6 kSEK (2.3). The improvement was driven by increased sales
volume in combination with higher price, whereas operating costs
increased due to increased inflationary pressure and higher mainte
-
nance costs due to temporary production disturbances in the third and
fourth quarter. Gränges Americas continued to optimize product mix to
achieve higher prices. The syncing of commercial and operational priori
-
ties continued to have a positive impact on margins.
Employees
The average number of employees was 2,648 (1,792) during 2021. The
increased number of employees for the full year is mainly related to the
acquisition of Aluminium Konin in the fourth quarter last year.
Research and development
Innovation is integrated into Gränges’ core business and strategy, and is
found everywhere in the organization. Gränges’ innovation efforts are
supported by the company’s Research & Innovation (R&I) centres
around the world and by a well-developed innovation culture. Coopera
-
tion with external parties, customers and suppliers constitutes a grow-
ing part of innovation and is also a resourceefficient way of working.
The Group is running a large number of development projects but
the criteria for recognising the projects as intangible assets are
cur-
rently not met. Total costs for research and development projects
amount to SEK 72 million (85) for 2021.
Sustainability
By managing its business in a sustainable and responsible way, Gränges
strengthens its long-term competitiveness and creates financial and
operational value for the company and its stakeholders. Sustainable
business value is achieved by reducing undesired impacts of the compa
-
ny’s operations and at the same time enforcing positive contributions
and opportunities that emerge from integrating sustainability aspects
into the business and value chain.
The company’s group-wide sustainability framework and accompa
-
nying 2025 targets was originally launched in 2019. It covers 13 sustain-
ability aspects, grouped into five sustainability pillars, that are deemed
to have the highest sustainability impact and are assessed by stake
-
holders to be most important for the company to address. Gränges has
delivered good progress for many sustainability priorities in the past
few years, and as a result the company in 2021 upgraded some of the
2025 targets. For Gränges’ sustainability framework and 2025 targets
see page 30.
Gränges is subject to the EU taxonomy and has in 2021 identified
aluminium recycling as an eligible activity and an important enabler
to support global sustainable development. For Gränges’ reporting
according to the EU taxonomy see page 122.
Gränges’ 2021 sustainability report has been prepared in accordance
with the Annual Reports Act on sustainability reporting as well as GRI
Standards: Core option. It also constitutes Gränges’ Communication on
Progress in line with the UN Global Compact guidelines. The statutory
Sustainability Report according to the Swedish Annual Accounts Act is
found on pages 29–43, 55 and 118–138.
Parent company
include Group Management and Group functions such as finance, treas
-
ury, sustainability and communications. For the 2021, net sales in the
parent company was SEK 142 million (169). Result for the full year was
SEK –63 million (122). The result for previous year includes dividend
from the Chinese subsidiary of SEK 194 million.
The Gränges share and ownership
The share capital in Gränges amounts to SEK 142 million, divided into
106,308,618 shares, each with a quota value of SEK 1.339775. Gränges
only has one class of shares.
At 31 December 2021 Gränges had no shareholder that owned more
than 10 per cent of Gränges’ capital and votes.
Board of Directors issue authorization
The Board of Directors’ are authorized by the annual general meeting
2021 to, on one or more occasions until the AGM 2022, issue new shares
and/or convertible bonds. An issue can be decided with or without
regard to shareholders’ pre-emption rights. Following this authorisa
-
tion, a total maximum number of shares equivalent to 10 per cent of the
total number of outstanding shares in the company on the date of the
AGM’s authorisation resolution, may be issued in new share issues and/
or through the conversions of convertible bonds. There are no other
pre-emption clauses, refusal clauses or other restrictions to the trans
-
fer of shares in the company by law, the company’s articles of associa-
tion or any other document to which the company is a party.
Operating risks and uncertainty factors
As a Group with operations in different parts of the world, Gränges is
exposed to various risks and uncertainties such as raw material price
risk, market risk, operational and legal risk, as well as financial risks
related to foreign exchange rates, interest rates, liquidity and refinanc
-
ing. Gränges’ risk management process entails to identify, assess and
reduce risks related to the Group’s business and operations. In the sec
-
tion risk management on pages 47–52 Gränges’ risks and risk manage-
ment is further described. For a more comprehensive description of the
financial risks, see Note 30.
Current guidelines for remuneration to senior managers
Current guidelines for remuneration to to senior managers were
adopted at the Annual General Meeting on 25 June 2020.
Senior managers refers to the CEO and the Deputy CEO of the
Group, and members of the Group Management reporting directly to
the CEO. Per 31 December 2021 senior managers consists of President
& CEO, CFO & Deputy CEO, President Americas, President Asia, Presi-
dent Europe, and SVP Sustainability.
Gränges shall offer remuneration levels and terms of employment
which are necessary to recruit, develop, and retain individuals in Group
Management. These individuals shall possess the expertise, motivation
and capacity required to uphold, develop, and implement overall value-
additive strategic targets for the Gränges Group and, moreover, to sup
-
port its long-term interests. To obtain this, it is important to sustain fair
and internally balanced terms that are at the same time competitive on
the market with respect to structure, scope and remuneration levels.
These guidelines ensure that individuals in Group Management, regard
-
less of geographical market, may be offered competitive total remuner-
ation, and is aimed at creating increased transparency on remuneration
issues. Applicable laws and other relevant regulatory frameworks (both
Swedish and foreign) in this area must be complied with at all times.
The basic principle is that the remuneration must be competitive and
consist of a balanced combination of fixed salary, variable remunera
-
tion, pension benefits, other benefits and terms for dismissal/sever-
ance payment. Furthermore, the Board of Directors may prepare and
the Annual General Meeting resolve on, share and share-price related
55 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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incentive programs. Such a combination of remuneration fosters and
supports management and achievement of objectives in both a short
and long-term perspective. The various types of remuneration that may
be paid out are described below.
Fixed salary
The fixed salary shall consist of customary base salary. The salary is
based on responsibility, performance, expertise and the complexity and
scope of the task. In the event of full payment of variable remuneration,
the fixed annual base salary comprises 40 per cent of the total cash
remuneration, with the exception for President Americas, where the
percentage is 33.33 per cent.
Variable remuneration – STI and LTI
The variable remuneration shall comprise an annual incentive pro
-
gramme (STI) and a long-term incentive programme (LTI), both of which
pay cash remuneration. There is no guaranteed variable remuneration.
The outcome of STI is determined by a number of financial and non-
financial parameters for the Gränges Group. Examples of financial key
ratios includes adjusted operating profit and examples of non-financial
objectives includes a selection of the Group’s long-term sustainability
object and, in certain cases, also specific projects or tasks. The objec
-
tives shall be designed so as to both promote the Group’s business
strategy and long-term interests and the individual long-term develop
-
ment of the member of Group Management.
At the end of the measurement period for fulfillment of the predefined
parameters for payment of STI, a comprehensive evaluation shall be con
-
ducted to assess the extent to which these parameters have been met.
The CEO is responsible for this evaluation for each and every member of
Group Management with the exception of the CEO personally. The Board
of Directors’ Remuneration Committee is responsible for the evaluation
of the CEO. With regards to financial objectives, the evaluation will be
based on the latest financial information made public by the company.
Maximum remuneration for STI is 60 per cent of the fixed annual base
salary for each individual in Group Management, with the exception of
the individual who holds the position of President Americas, for whom
the maximum remuneration can be 100 per cent of the fixed annual base
salary.
STI shall be supplemented by an LTI programme for a term of three
years. An amount corresponding to the outcome of STI for each partici
-
pant shall be reserved in a separate, so called, LTI bank. Provided that
the employee has not been given notice of termination or personally
terminated their employment with the Gränges Group, the amount
which is reserved for LTI shall be paid out at a rate of one-third per year
for three years. The amount shall be adjusted prior to payment to take
into account the total return on the Gränges share.
The total outcome of STI and paid-out LTI during a single year shall be
limited to 150 per cent of the fixed annual base salary, with the excep
-
tion for President Americas, whose payouts are limited to 200 per cent
of the fixed annual base salary.
The company does not have any potential deferral periods or, accord
-
ing to agreements, any possibility to reclaim variable remuneration.
Information on previously resolved remuneration
which is not yet payable
Long-term incentive programs
In order to stimulate long-term involvement, during 2019 senior manag-
ers were offered a long-term incentive programme (LTI 2019) following
the adoption of a resolution by the Annual General Meeting on 8 May
2019. The programme is for a term of three years and is, essentially,
structured as follows: An amount corresponding to the outcome of STI
2019 for each participant is reserved in a separate, so-called, LTI bank.
Provided that employment with the Gränges Group has not terminated,
the amount is paid out at a rate of one-third per year during 2021, 2022,
and 2023, adjusted to take into account the total return on the Gränges
share. The total outcome of STI and paid-out LTI during a single year is
limited to 150 per cent of the fixed annual base salary, with the excep
-
tion of President Americas, whose total outcome is limited to 200 per
cent of the fixed annual base salary.
In order to also continue to stimulate long-term involvement, during
2020 senior managers were offered a long-term incentive programme
(LTI 2020) following the adoption of a resolution by the Annual General
Meeting on 25 June 2020. The programme is for a term of three years
and is, essentially, structured as follows: An amount corresponding to
the outcome of STI 2020 for each participant is reserved in a separate,
so-called, LTI bank. Provided that employment with the Gränges Group
has not terminated, the amount is paid out at a rate of one-third per year
during 2022, 2023, and 2024, adjusted to take into account the total
return on the Gränges share. The total outcome of STI and paid-out LTI
during a single year is limited to 150 per cent of the fixed annual base
salary, with the exception of President Americas, whose total outcome
is limited to 200 per cent of the fixed annual base salary.
Investment programme – IP 2020
At the Annual General Meeting on 25 June 2020 it was resolved, in
accordance with the Board of Directors’ proposal, on a long-term
investment programme (“IP 2020”).
Senior managers and other mem-
bers of the Group Management (together with other key employees)
were offered to participate in a long-term investment programme (“IP
2020”), as a supplement to the yearly incentive programmes, according
to the following:
• IP 2020 is a one-off programme.
• The participants in IP 2020 have invested an amount corresponding to
up to 50 per cent of an annual base salary before tax (the “Investment
Amount”) in shares and call options in Gränges.
• The Participant in IP 2020 have received a conditional cash contribu
-
tion which, after tax deducted and other applicable fees, amounts to
50 per cent of the investment amount (the “Net Contribution”). If the
participant terminate their employment or will be terminated within
three years from the date of payment of the Net Contribution (the
“Time of Investment”), an amount corresponding to the Net Contribu
-
tion shall be refunded to Gränges.
• Participants in IP 2020 adjusted their risk level by choosing to make
25, 50, or 75 per cent of their investment in call options and
the remaining part in shares.
• The shares that have been invested in within the context of IP 2020
have only been made in existing shares in Gränges which have been
acquired by the participant on the market. Consequently, no new
shares have been issued by Gränges for the Participants’ investment
in shares in IP 2020. The latter also applies to any shares which may
be acquired within IP 2020 through the exercise of call options which
have been issued.
• An adapted synthetic programme for foreign participants who do not
have the opportunity to invest directly in Gränges-shares has been
designed.
• The synthetic programme was effective in 2021.
Pension
Pension shall be paid in accordance with relevant national legislation,
applicable collective agreements, and suchlike and, for Swedish individ
-
uals in Group Management, is limited to the ITP plan (Industry and Trade
Supplemental Pension). Accordingly, there are both premiumbased and
benefits-based undertakings, based on individual prerequisites and
regulatory frameworks. There are two main variants of the ITP plan:
ITP 1 applies to individuals born 1 January 1979 or later and ITP 2 applies
to individuals born 31 December 1978 or earlier. In order to equalize
the differences that can arise between participants in ITP 1 and ITP 2
– in other words, between different individuals in Group Management
– certain adjustments are made in relation to the solution indicated
by ITP2 with regard to how much of the remuneration is pensionable.
The pension premiums for premium defined pension shall be not more
than 30 per cent of paid cash fixed and variable remuneration.
For the CEO, the pension premiums shall amount to 35 per cent,
calculated on fixed monthly remuneration, and are thus premium
defined. The retirement age for the CEO is 65 years of age.
For foreign individuals in Group Management, a corresponding struc
-
ture shall apply, based on the circumstances in the relevant country.
The pension terms and conditions shall be on market terms.
For other individuals in Group Management, the retirement age is
60–65 years of age, depending on the country of employment. For
employments governed by rules other than Swedish, the pension may
be duly adjusted for compliance with mandatory rules or established
local practice, taking into account, to the extent possible, the overall
purpose of these guidelines.
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Other benefits
Benefits which are not directly related to fixed salary and variable remuner
-
ation, for example a company car and medical care benefits, shall promote
the performance of the work and be consistent with standard practice on
the market for this target group. The total costs as a consequence of such
benefits may not exceed 20 per cent of the fixed annual base salary.
For employments governed by rules other than Swedish, other bene
-
fits may be duly adjusted for compliance with mandatory rules or estab-
lished local practice, taking into account, to the extent possible, the
overall purpose of these guidelines.
Special remuneration
Additional cash variable remuneration may be paid out under extraordi
-
nary circumstances, provided that such extraordinary arrangements
are limited in time, and may only be awarded on an individual basis
either for the purpose of recruiting or retaining individuals in Group
Management or as remuneration for extraordinary performance beyond
the individual’s ordinary tasks. Such remuneration may not exceed an
amount corresponding to 20 per cent of the fixed annual base salary
and may not be awarded more than once per year and per individual.
Any resolution on such remuneration shall be adopted by the Board
of Directors based on a proposal from the Remuneration Committee.
Remuneration to directors
In certain cases, board directors elected by the Annual General Meeting
should be able to receive fees and other remuneration for work carried
out on behalf of the company, alongside their work on the Board of
Directors. Fees at market rates, approved by the Board of Directors,
may be pay able for such services.
Terms for termination etc.
There is a mutual contractual notice of termination period of 12 months
as between the CEO and the company. Upon termination by the com
-
pany, severance remuneration without set-off is also paid for an addi-
tional 12 months. The mutual notice of termination period for the Deputy
CEO and other individuals in Group Management shall correspond to six
months. Upon termination by the company, severance remuneration for
an additional 12 months is paid, without setting off the first six months.
Salary and terms of employment for other employees
In the preparation of this proposal on guidelines, salary and terms of
employment for employees of the company have been taken into
account by including information on the employees’ total remuneration,
the components of the remuneration, and increase and rate of increase
of remuneration over time, in the Remuneration Committee’s and the
Board of Director’s basis of decision when evaluating the reasonable
-
ness of the guidelines and appurtenant limitations.
The decision-making process to determine, review and implement
the guidelines
The Board of Directors resolves, after preparation by the Remuneration
Committee, on the structures of remuneration systems, as well as levels
and forms of remuneration to individuals in Group Management. The
Board of Directors shall prepare a proposal for new guidelines at least
every fourth year and submit it to the Annual General Meeting for adop
-
tion. The guidelines shall be in force until new guidelines are adopted by
the Annual General Meeting. The Remuneration Committee shall moni
-
tor and evaluate programs for variable remuneration for individuals in
Group Management, the application of the guidelines, and the current
remuneration structures and remuneration levels in the company.
The members of the Remuneration Committee are independent of the
company and company management. The CEO and other members of
Group Management do not participate in the Board of Director’s and/or
the Remuneration Committee’s processing of, and resolutions regard
-
ing, remuneration-related matters insofar as they are affected by such
matters. Conflicts of interest are counteracted in all resolutions and any
potential conflicts of interest are handled in accordance with the com
-
pany’s framework for governance, consisting out of a code of conduct,
policies and guidelines.
Derogation from the guidelines
The Board of Directors may temporarily resolve to derogate from the
guidelines, in whole or in part, if in a specific case there is special cause
for the derogation and a derogation is necessary to serve the company’s
long-term interests, including its sustainability, or to ensure the compa
-
ny’s financial viability. As stated above, part of the work of the Remunera-
tion Committee is to prepare the Board of Director’s resolutions regarding
remuneration issues, which includes resolutions on derogations from the
guidelines.
Other
The Board of Directors is expected to make a decision during end of
March 2022 regarding the guidelines for remuneration of senior execu
-
tives, that the Board will propose to the Annual General Meeting.
Events after the end of the year
On March 1, 2022, Fredrik Spens took over as President Gränges
Europe. He succeeded Jörgen Rosengren, who held the position on an
interim basis. From the same date, Fredrik Spens is part of Gränges’
Group Management.
No other significant events have occurred after the year.
57 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Corporate governance report 2021
DEAR SHAREHOLDER,
This Corporate Governance Report provides an overview of the work of
the Board of Directors and management. Well-structured processes
enable Gränges to operate responsibly, efficiently, and sustainably in
the interest of our shareholders. It also builds trust with existing and
potential owners, customers, suppliers, legislators, employees, the
public and other stakeholders.
A productive year
Living with the pandemic for two years has required the Board to create
new and smarter ways to work during times when travel has been diffi
-
cult. Nevertheless, we made a very productive Board visit to Gränges
Konin, our newly acquired company in Poland. It was rewarding to expe
-
rience the competence and enthusiasm of the local management, to
inspect our large investment programme on site, and to further deepen
our good relationships with the local authorities. I was also able to
make an extensive trip to the US in person together with the CEO, where
I could go through market plans with the team and see for myself how
the latest investments are progressing according to plan.
Supporting management during a challenging year
2021 was a turbulent year in our industry. The first half of the year saw
strong demand, but the second half was heavily influenced by a global
shortage of semiconductors and other components. These caused
severe supply chain problems for our customers, which weighed on
demand. We also saw dramatic cost increases for energy, freight, and
other input costs such as alloying elements. The Board of Directors
stayed in close contact with management throughout these develop-
ments. It is gratifying to see that 2021, in the end, was a record for
Gränges in both volume and operating profit, and that we have many
actions already in place for further improvement in 2022. Even more
important is that we have been able to continue our investment pro-
grams, improve sustainability and make the organization stronger
while handling these external challenges.
Development of the strategy
Following the global trends of regionalization, sustainability, and fast
growth of electric vehicle technology, we foresee an exciting future
with many opportunities. Gränges is well positioned to take advantage
of these trends. The work of the Board of Directors during the year
focused on supporting management in navigating this new landscape.
We initiated ambitious expansion plans for the battery and electri-
cal vehicle industries, with concrete investments already taking place
in Shanghai and Finspång. We reviewed and adjusted our long-term
strategy for Asia due to dramatic sustainability-driven changes to the
aluminium industry in China. We followed up our expansion project in
Konin in detail and on site, and have had several reviews of the inte-
gration work during the year. Our acquisition of Gränges Konin, which
took place in 2020, will play an important part for Gränges in the
future. The timing looks very good, as the demand outlook in Europe is
very promising just as our new capacity is coming on line. The Board
also reviewed and challenged the business plans for Gränges Ameri-
cas, and decided to invest in a new recycling and casting centre at the
facility in Huntingdon.
Focus on sustainability
Gränges continued to execute its sustainability strategy during the
year. We also upgraded our sustainability targets to reflect an even
higher ambition and good progress. For all three regions, we are now
looking into additional investment opportunities driven by sustaina-
bility trends. In addition, we successfully issued a Sustainability-
Linked Bond, the first to be listed on Nasdaq Stockholm.
At the end of 2021, Gränges established an internal Sustainability
Board to ensure a systematic follow-up of Gränges’ sustainability
strategy execution at all regions and sites.
We were also very pleased when Gränges was awarded a Platinum
rating from EcoVadis. Platinum is the highest rating awarded by Eco-
Vadis and it places Gränges among the leading 1 per cent of compa-
nies assessed globally in our industry.
New CEO and a simplified organization
Our previous CEO, Johan Menckel, announced that he would leave his
position during 2021. After a professional recruiting process, we were
very pleased to welcome Jörgen Rosengren as the new President and
CEO of Gränges. The Board invested in a thorough, fast and efficient
introduction programme, and in October, Jörgen assumed his posi-
tion. Already during the fourth quarter, the Board approved the new
CEO’s recommendation for a new, simplified and more focused organi-
zation. It was a pleasure to see the new management take a firm grip
on operations and start to make plans for the future.
Strong position for sustainable and profitable growth
From the Board of Directors’ perspective, Gränges stands out in our
industry as one of the more sustainable, innovative and growth-
oriented companies. But this is also a time of exciting change for the
industry, which creates both opportunities and challenges. A priority
for the Board of Directors in 2022 is to put in place a good plan for
sustainable growth and value creation for the next several years.
In view of the improved financial results, and taking the market
outlook and our investment opportunities into account, the Board
proposes a dividend of SEK 2.25 (1.10) per share for the 2021 fiscal
year. This increased dividend means that 40 per cent of the net profit
will be distributed to our shareholders.
I would like to take this opportunity to welcome Martina Buchhauser,
who joined our Board in 2021 and has already made a very valuable
contribution, and thank all my fellow Board members for good cooper-
ation, constructive contributions and engaged work. Special thanks go
to Carina Andersson, who has declined re-election. She was elected
to the Board in 2014 and has taken a very active role in its work. She
has also served on the Remuneration Committee. Her valuable indus-
trial experience and competence have contributed greatly to our good
development, for instance during the large acquisitions we made in
2016 and 2020.
Finally, I would like to thank Gränges’ management and dedicated
employees for their great efforts during yet another exceptionally
challenging year. I am convinced that Gränges is very well positioned
for continued sustainable and profitable growth.
Stockholm, March 2022
Fredrik Arp
Chairman of the Board of Directors
58 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Good and sound corporate governance ensures that the
company is run as responsibly, eciently and sustainably
as possible in the interests of the shareholders. Good
corporate governance creates order and system for the
Board of Directors and management, and contributes to
increased trust and confidence among existing and
potential owners, customers, legislators, the public and
other stakeholders. In this way, the business sector’s
freedom to develop is ensured, as is the supply of capital
and competence.
Gränges’ corporate governance is based on Swedish regulations
and Swedish legislation, primarily the Swedish Companies Act
and the Swedish Annual Accounts Act, Nasdaq Stockholm’s regu-
latory structure for issuers, the Swedish Corporate Governance
Code (“the Code”), the Articles of Association as well as other
relevant internal and external regulations and policies.
Gränges complies with the Swedish Corporate Governance
Code and this Corporate Governance Report has been prepared
as part of Gränges’ application of the Code. Gränges does not
report any deviations from the Code regarding the financial year
2021. The company’s auditors have made a statutory examination
of this corporate governance report. The Code is available on
www.bolagsstyrning.se.
Gränges has during 2021 followed Nasdaq Stockholm’s regula-
tory framework for issuers and good practice in the stock market.
No violations of applicable stock exchange rules or good prac-
tices in the stock market have been reported regarding Gränges
by the Nasdaq Stockholm Disciplinary Board or the Stock Market
Board in 2021. The CEO has no external commitments that can be
considered as contrary to the company’s interests. All relevant
corporate governance-related information is available on
Gränges’ website.
Organization
Gränges is an aluminium technology company that drives the
development of lighter, smarter, and more sustainable aluminium
products and solutions. The Group has 2,600 employees and net
sales of about SEK 18 billion. Gränges has production facilities
and conducts sales in Asia Pacific, Europe, as well as North and
South America. The total annual production capacity amounts to
570 ktonnes. The production facilities are located in Finspång
(Sweden), Konin (Poland), Saint-Avold (France), Shanghai (China),
as well as in Huntingdon (Tennessee), Salisbury (North Carolina),
and Newport (Arkansas) in the US. Gränges also owns 50 per cent
of a company located in Shanghai engaged in metal stamping.
Corporate governance in Gränges
The governance, management, and control of Gränges are distributed among the shareholders at the Annual General Meeting, the Board of Directors and
the CEO under Swedish Company Law, the Swedish Code of Corporate Governance, and the Articles of Association.
Shareholders
Annual General Meeting
President and CEO
Group Management
Nomination
Committee
1)
Board of Directors
Remuneration Committee Audit Committee
External auditor
Internal audit
Vote at the Annual General Meeting
Appoints the Nomination
Committee
1)
Proposes Board and auditor
Information
Information
Appoints auditor
The auditor reviews
the annual accounts
and accounting, and
the Board and CEO’s
management. Reports
to the Board and
shareholders.
Objectives, strategies, policies,
governing instruments, core values,
remuneration structure. The Board
sets up the committees and
appoints its members.
Examples of external steering instruments
• Swedish Companies Act
• Swedish Annual Accounts Act and IFRS
• Nasdaq Stockholm’s regulatory structures for issuers
• EU Market Abuse Regulation, no 596/2014 (MAR)
• Swedish Corporate Governance Code (“The Code”)
Examples of internal steering instruments
• Articles of Association
• Rules of Procedure for the Board of Directors
and committees, instructions for CEO
• Code of Conduct (including regulations and
guidance regarding whistleblowing)
• Insider Policy
• Financial Management Policy
• Accounting Manual
• Communication Policy
• Anti-Corruption Policy
1) Appointed in accordance with an instruction for
the Nomination Committee decided by the Annual
General Meeting.
59 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Gränges has during 2021 established two business areas: Gränges
Eurasia and Gränges Americas. Gränges Eurasia includes three pro-
duction facilities with direct chill casting and hot rolling technology
in Finspång (Sweden), Konin (Poland), and Shanghai (China), as well
as Gränges Powder Metallurgy in Saint-Avold (France). Gränges Amer-
icas uses continuous casting technology and includes three produc-
tion facilities in Huntingdon, Salisbury, and Newport in the US.
Gränges Eurasia is headed by the CEO and Gränges Americas is
headed by the regional President for the Americas region.
The Group’s parent company, Gränges AB, is a Swedish publicly
listed company with reg.no. 556001-6122. Its registered office is in
Stockholm with its head office on Linnégatan 18. Gränges’ shares are
listed on Nasdaq Stockholm’s Mid Cap list.
The share and shareholders
Gränges’ shares have been traded on Nasdaq Stockholm in the Mid
Cap segment since 10 October, 2014. The share capital in Gränges
amounts to SEK 142 million, distributed among 106,308,618 shares
that give the right to an equal number of votes and an equal share in
the company’s assets and profits. On 31 December, 2021, the number
of known shareholders totalled 10,970. The Fourth Swedish National
Pension Fund (AP4) was the largest shareholder, followed by AFA
Insurance and Swedbank Robur Funds. 71.4 per cent of the sharehold-
ers held 500 shares or fewer and the ten largest shareholders held
42.7 per cent of the total number of shares. Foreign-based share own-
ership amounted to 50.6 per cent. No shareholder had a shareholding
of more than 10 per cent of the total number of shares. There are no
restrictions on how many votes each shareholder may represent and
cast at a general meeting of shareholders.
The Annual General Meeting (AGM) held on 6 May 2021 resolved to
authorize the Board of Directors to, on one or more occasions until the
AGM 2022, issue new shares.
Information about shareholdings of Board members and Group
Management can be found on pages 67–69. More information about
the Gränges share and shareholders, including a table of sharehold-
ings as of 31 December 2021, can be found on pages 45–46.
Annual General Meeting
The Annual General Meeting (AGM), which is the company’s highest
decision-making body, allows all shareholders to exercise the influ-
ence that their respective shareholdings represent.
Annual General Meeting 2021
The AGM 2021 was held on 6 May 2021. Due to the extraordinary situa-
tion during the COVID-19 pandemic the AGM was conducted by advance
postal vote, without physical attendance.
At the meeting, 45.51 per cent of the shares in the company were
represented.
The AGM elected Martina Buchhauser as new Board member, and
re-elected Fredrik Arp, Carina Andersson, Mats Backman, Peter
Carlsson, Katarina Lindström and Hans Porat as Board members.
Ragnhild Wiborg had declined re-election. The AGM re-elected Fredrik
Arp as the Chairman of the Board of Directors.
The AGM discharged the members of the Board of Directors and the
Chief Executive Officer from liability towards the company for man-
agement of the company in 2020.
The AGM re-elected the registered accounting firm Ernst & Young AB
as the company’s auditor, and authorized public accountant Andreas
Troberg was appointed by Ernst & Young AB as auditor in charge.
Other resolutions taken during the AGM included:
• To adopt the income statement and balance sheet as well as the
consolidated income statement and consolidated balance sheet for
the 2020 financial year,
• To resolve on a dividend of SEK 1.10 per share, in total
116,939,480 SEK,
• To resolve, in accordance with the Nomination Committee’s pro-
posal, that the Board of Directors is to consist of seven members
elected by the AGM, with no alternates, for the period up to the
close of the next AGM,
• To resolve, in accordance with the Nomination Committee’s pro-
posal, that fees payable for the period until the conclusion of the
AGM 2022 will be in accordance with the following. The Chair of the
Board of Directors will receive SEK 775,000 and each of the other
Board members elected by the AGM will receive SEK 325,000. Fur-
thermore, a fee of SEK 125,000 will be paid to the Chair of the Audit
Committee and SEK 55,000 to the other members. A fee of SEK
60,000 will be paid to the Chair of the Remuneration Committee and
SEK 30,000 to the other members. All employee representatives of
the Board shall receive unchanged SEK 40,000 each for the corre-
sponding period of time.
• To resolve that fees will be paid to the auditor in accordance with
approved invoices,
• To resolve, in accordance with the Board of Directors’ proposal, on
approval of the Board’s remuneration report on remuneration to
CEO and Deputy CEO in accordance with Chapter 8, Section 53 a of
the Swedish Companies Act.
• To resolve, in accordance with the Board of Directors’ proposal, on a
long-term incentive programme, LTI 2021. The programme will run
for three years and will be offered to senior managers to supple-
ment the annual incentive programme (“STI 2021”). STI 2021 meas-
ures adjusted operating profit (50 per cent), cash conversion (30 per
cent) and individual performance (20 per cent), for a maximum pay-
out of 60 per cent of annual basic pay. For President Americas, the
maximum payout is 100 per cent of annual basic pay. LTI 2021
implies that a pay-out equivalent to the amount of STI 2021 is allo-
cated and indexed to the total return of the Gränges share. The
vesting periods for LTI 2021 will run over the years 2022, 2023, and
2024 and payment will be made proportionately on an annual basis
over a period of three years,2023, 2024 and 2025, provided that the
individual remains in the Gränges Group’s employ. The total payout
from STI and LTI programmes may not exceed 150 per cent of the
annual basic pay as of the date of the payout. This shall not apply to
the person holding the position as President Americas, whose total
payout from STI and LTI programmes is limited to 200 per cent of
the annual basic pay,
• To resolve, in accordance with the Board of Directors’ proposal, to
authorise the Board of Directors to, on one or more occasions until
the next AGM, issue new shares and/or convertible bonds. An issue
can be decided with or without regard to shareholders’ pre-emption
rights. Following this authorisation, a total maximum number of
shares equivalent to 10 per cent of the total number of outstanding
shares in the company on the date of the General Meeting’s authori-
sation resolution, may be issued in new share issues and/or through
the conversions of convertible bonds.
The complete minutes of the AGM are available at www.granges.com.
Nomination Committee
The Nomination committee represents Gränges’ shareholders. It pro-
poses to the AGM nominations for Chairman of the Board, Board mem-
bers, auditor and auditor’s fee, chairman of the AGM, as well as fees
for Board and committee work. In addition, the Nomination Committee
shall submit proposals for Nomination Committee instructions if
required.
Gränges’ Nomination committee for the AGM 2022 consists of
representatives of the company’s three largest shareholders as of
31 August 2021 and the Chairman of the Board. The member repre-
senting the largest shareholder shall be Chairman of the Nomination
committee, unless the Nomination Committee agrees otherwise.
As of 31 August 2021, Gränges’ three largest shareholders were
The Fourth Swedish National Pension Fund (AP4), AFA Insurance and
Handelsbanken Funds, which were invited to nominate candidates for
the Nomination Committee. On 17 September 2021, it was announced
in a press release and on the company’s website that the Nomination
Committee ahead of the AGM 2022 had the following composition:
Jannis Kitsakis (AP4), Anders Algotsson (AFA Insurance), Niklas
Johansson (Handelsbanken Funds) and Fredrik Arp (Chairman of the
Board of Gränges). The Chairman of the Nomination Committee is
Jannis Kitsakis.
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Nomination Committee for the 2022 AGM
Appointed by/Name
Percentage of votes on
31 December 2021
2)
AP4/Jannis Kitsakis
1)
9.3
AFA Insurance/Anders Algotsson
1)
6.2
Handelsbanken Funds/Niklas Johansson
1)
4.5
Chairman of the Board of Gränges AB/Fredrik Arp 0.0
1) Independent in relation to the company and company management.
2) For exact number of shares, see page 46.
Shareholders have been able to submit proposals and comments to
the Nomination Committee until 31 January 2022. The Nomination
Committee’s proposals are published through the notice convening
the AGM. In connection with the notice, the Nomination Committee
publishes a motivated statement on the company’s website that sup-
ports its proposals to the Board and a report on how the Nomination
Committee’s work has been conducted.
Work of the Nomination Committee before the 2022 AGM
Since the Nomination Committee was formed in autumn 2021, it has
had five meetings. No fee has been paid for the work in the committee.
At the Nomination Committee’s second meeting on 20 October 2021,
the Chairman of the Board presented the Board evaluation that he had
carried out with all Board members during October. The Chairman and
the General Counsel carried out a comprehensive evaluation in terms
of the number of questions. The result was consistently very positive.
Gränges, through the Nomination Committee, applies Rule 4.1 of the
Code as Diversity Policy in the preparation of proposals for election of
Board members. The rule implies that the Board of Directors should
have a, with regards to the company’s operations, development phase
and general circumstances, appropriate composition, characterized
by versatility and breadth regarding the competence, experience and
background of the AGM-elected Board members. A balanced gender
distribution should be pursued.
In the work before the 2021 AGM, the Nomination Committee has
assessed whether the composition of the current Board of Directors
meets the requirements according to the Diversity Policy of the Code
and has found that to be the case. The Nomination Committee has
also, as in previous years, evaluated each individual board member’s
ability to devote sufficient time and commitment to the board work.
Both evaluations have been positive. The annual evaluation of the
Board of Directors has been part of the basis for these assessments.
The Nomination Committee is continuously working to identify and
evaluate potential new Board members.
Prior to the 2022 Annual General Meeting, the Nomination Commit-
tee has proposed Steven Armstrong as a new member of the Board of
Directors and re-election of Fredrik Arp, Mats Backman, Martina
Buchhauser, Peter Carlsson, Katarina Lindström and Hans Porat.
Fredrik Arp is proposed for re-election as Chairman of the Board.
Carina Andersson has declined re-election and will leave the Board in
connection with the Annual General Meeting.
The Board of Directors
The main responsibility of the Board of Directors is to manage
Gränges’ business in the best interests of the company and share-
holders, as well as to safeguard and promote a good corporate culture.
The Board is also responsible for the organization and management of
the Group.
The Board of Directors continuously assesses Gränges’ financial
position and ensures that the company’s financial position can be sat-
isfactorily verified. The Board of Directors decides on issues related to
the Group’s strategic direction and organization, and decides on key
acquisitions, investments and disposals. The Board of Directors con-
tinuously evaluates the work of the CEO and Group Management.
Before every AGM, and based on proposals from the Remuneration
Committee, the Board of Directors prepares proposals for guidelines
for remuneration to the CEO and other senior managers.
The basis is the rules of procedure for the Board of Directors, the
CEO instructions and the principles for division of work between the
CEO, Chairman of the Board, the Board of Directors and various com-
mittees established by the Board of Directors. The rules of procedure
for the Board of Directors and the CEO instructions are revised and
updated annually.
The Board of Directors annually evaluates its work to develop its
procedures and efficiency through a systematic and structured pro-
cess. In 2021, the evaluation was carried out under the leadership of
the Chairman of the Board and the General Counsel. The result of the
evaluation, which is also reported in the section about the Nomination
Committee, was consistently very positive.
The constituent Board meeting following the 2021 AGM established
the Rules of procedure for Board of Directors including Rules of proce-
dure for the Remuneration and Audit Committees, as well as instruc-
tions for the CEO and the Insider Policy. The Rules of procedure gov-
erns the work and responsibilities of the Board of Directors, the
frequency of Board meetings, as well as the division of duties between
the Board members, between the Board committees, and between the
Board of Directors and the CEO.
Before each Board meeting, the members receive an agenda and
basis for decisions. Each Board meeting includes a review of current
business conditions, as well as the Group’s earnings, financial position
and outlook. Other issues that are addressed include competitive and
general market conditions. The Board of Directors regularly reviews
the overall risk situation from a variety of aspects, and the Group’s
work on health and safety, including accident statistics. The Board
also has a system for continuous follow-up of decisions and open
questions.
Composition of the Board of Directors
According to the Articles of Association, Gränges’ Board of Directors
shall consist of at least four and at most eight AGM-elected members
with a maximum of four deputies. The Board of Directors constitutes a
quorum when more than half of all Board members, including mem-
bers appointed by employees, are present. The Board of Directors
should consist of a well-balanced mix of the competencies required to
manage Gränges’ work responsibly and successfully. The assessment
is that Gränges’ Board of Directors has a suitable composition, regard-
ing the company’s operations, development phase and general cir-
cumstances, characterized by versatility and breadth regarding the
competence, experience and background of the AGM-elected Board
members. Gränges’ Board of Directors has a good gender distribution,
since three of its seven members are women.
In accordance with the law on Board representation of private-
sector employees, staff is entitled to appoint two Board members and
two deputy Board members. The employee organizations have exer-
cised this right in 2021. Information about Board members can be
found on pages 67–68 and at www.granges.com.
Chairman of the Board
The Chairman of the Board of Directors has a special responsibility to
ensure that the work of the Board of Directors is well organized and
conducted efficiently, and that the Board of Directors fulfils its duties
and obligations. The Chairman of the Board of Directors organizes and
leads the work of the Board of Directors, is responsible for contacts
with the owners in ownership matters and ensures that the work of the
Board of Directors is evaluated annually. The Chairman of the Board of
Directors is responsible for the day-to-day contact with CEO. To ena-
ble the work, the Chairman ensures that there are appropriate instruc-
tions on the division of work between the Board of Directors on one
hand and the CEO and the bodies set up by the Board of Directors on
the other.
The work of the Board of Directors in 2021
In 2021, 13 minuted Board meetings were held. Of these, four were
held at the head office, one in Warsaw and the others via video link.
61 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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J
A
N
F
E
B
M
A
R
A
P
R
M
A
Y
J
U
N
J
U
L
A
U
G
S
E
P
O
C
T
N
O
V
D
E
C
The Board of Directors formed a quorom at all meetings. Gränges’ CEO
and Deputy CEO, also CFO, have with some exceptions participated in
all meetings. The Board of Directors has held sessions in the absence
of Group Management at nine occasions. The secretary of the Board of
Directors is Gränges’ General Counsel.
Matters discussed and decided upon by the Board of Directors in
2021 include the appointment of a new CEO for Gränges, a thorough
review of the operations in Asia and the long-term strategy in Asia.
Furthermore, the Board of Directors has closely followed up
Gränges’ investment in Poland, which was made in 2020, and decided
on an additional investment regarding a casting machine at the facility
in Huntingdon, Tennessee.
Remuneration Committee
According to the Rules of procedure for the Board of Directors, the
Remuneration Committee shall comprise the Chairman of the Board
and one or more Board members, who should be independent in rela-
tion to the company and Group Management. During the year, the
committee consisted of four members and held five meetings.
The Remuneration Committee submits proposals to the Board of
Directors on CEO’s salary and other terms of employment, and sets out
limits for other Group Management’s salaries and terms of employ ment
by adopting guidelines for remuneration principles. The committee
evaluates the application of these guidelines. The committee also has
the task of monitoring and evaluating ongoing and during the year
completed programs for variable remuneration to Group Management.
During the latter part of 2021, the Remuneration Committee has
worked on a thorough review of the company’s STI and LTI programmes.
The work has consisted of finding ways to partially replace the current
LTI programmes and, as far as the STI programmes are concerned,
adjusting the parameters that apply with regard to the outcome of the
programme. This has resulted in, among other things, that sustain-
ability criteria have been clearly set as a parameter.
Information about members of the Remuneration Committee can be
found in the table on page 63. A statement of remuneration to senior
executives can be found in Note 10.
Audit Committee
According to the Rules of procedure for Board of Directors, the Audit
Committee should comprise at least three AGM-elected Board mem-
bers, and the majority of them should be independent of the company
and Group Management. The committee members should have spe-
cialist competence, experience of and interest in finance and account-
ing. The Board of Directors elects the Chairman of the Audit Committee
who may not be Chairman of the Board. The Audit Committee meets
before each quarterly report, and in addition if necessary. The Audit
Committee supports the Board of Directors in fulfilling its responsi-
1) Due to the extraordinary situation due to the COVID-19 pandemic, the AGM was conducted by advance postal vote, without physical attendance.
>> THE BOARD’S WORK IN 2021
December
• Base forecast for next year
• Remuneration programmes
• Presentation of annual evaluation of the Board’s work
• Insurance coverage
January
• Year-end report
• Annual report
• Report from auditors
• Decision about dividend proposal
March
• Notice of AGM
April
• Interim report Q1
October
• Interim report Q3
July
• Half-year report
May
• AGM
1)
• Investment strategies
• Sustainability-Linked Bond
• Annual update of rules of
procedure and policies
February
• Update of Gränges
Eurasia’s operation
September
• Strategy financial targets
• Green Bond
• Remuneration Policy
• Update of Gränges Eurasia’s
operation and strategy
August
• Update of Gränges America’s
operation and strategy
62 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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bilities in internal control and accounting, and to ensure the quality of
Gränges’ financial reporting.
The Audit Committee analyses and highlights key accounting issues
affecting the Group and monitors the financial reporting process to
ensure quality. The Audit Committee also takes note of the company’s
impairment test and its assumptions, assists the Nomination Com-
mittee to prepare proposals for auditors and their fees, and assesses
the independence of the external auditor.
The company’s risk management process is based on production
processes and flows. The Audit Committee considers the identified
risk areas. Based on the outcome of that, the committee determines
the focus and scope of the internal auditing and establishes an inter-
nal audit plan. Gränges’ internal audit function reports to the Board of
Directors and must ensure that the company has sufficient internal
control systems for financial reporting. It is performed on a rolling
schedule and is conducted by the company’s Group accounting func-
tion with support from the subsidiaries’ accounting functions, except
for the business that is the subject of the audit. The purpose of apply-
ing so called cross-functional audits between the units is to exchange
experiences and achieve best practice within the Group. In 2021, inter-
nal audit of Gränges’ operation in Konin, Poland, was conducted. Due
to continued travel restrictions related to COVID-19 pandemic, the
subsidiaries’ participation was unfortunately limited and most of the
audit was conducted by the Group’s accounting function.
In conjunction with the quarterly reviews of the company’s financial
performance and position, the Audit Committee takes part of man-
agement’s assessment of the areas where estimates are important to
the Group. One area that has been reviewed in connection with each
quarterly report during the year is whether the Chinese business is
expected to finally achieve qualification as a high-tech company and
thus enjoy a tax rate of 15 per cent instead of the ordinary tax rate of
25 per cent. For further information, see Note 17 Taxes.
The Audit Committee annually sets a number of focus areas and
during the year continued strong focus has been on IT and cyber secu-
rity. Additional focus area for 2021 has been the integration of the
acquired business in Poland.
The Audit Committee has had five meetings in 2021. The auditor
attended all meetings during the year and reported on controls and
audit planning throughout the year. More information about members
of the Audit Committee can be found in the table on page 63.
Auditor
The auditor, elected at the AGM, is responsible for reviewing the
annual accounts and accounting, and examining the Board’s and
CEO’s management of the company.
According to the Articles of Association, Gränges should have at
least one and at most two auditors. Registered auditing firms may
be appointed as auditors. At the 2021 AGM, Ernst & Young AB was
appointed auditor and announced that the authorized public account-
ant Andreas Troberg is auditor in charge until the 2022 AGM.
The external audit of the parent company and Group accounts, and
of the administration of the Board of Directors and CEO, is conducted
according to International Standards on Auditing (ISA), and with gen-
erally accepted auditing standards in Sweden. The auditor conducts a
general review of the quarterly report for the third quarter and audits
the Annual Report and the consolidated accounts. The auditor reports
the results of his audit of the Annual Report and consolidated
accounts as well as his review of the Corporate Governance Report
through the auditor’s report and a special report on the Corporate
Governance Report, which is presented to the AGM. In addition, the
auditor submits reports on audits performed to the Audit Committee
three times a year and to the Board of Directors as a whole once a year.
Information about auditor fees can be found in Note 12.
CEO and Group Management
The CEO is appointed by the Board of Directors and is responsible for
the day-to-day management of the company in accordance with the
Board’s instructions and guidelines. Group Management is responsi-
ble for developing and implementing the Group’s overall strategies
regarding for example product and customer strategies, and acquisi-
tions and disposals. The matters are prepared by Group Management
to be decided upon by the Board.
Gränges’ Group Management comprises six members: President
and CEO, CFO and Deputy CEO, President Asia, President Europe,
President Americas and SVP Sustainability. SVP Corporate Responsi-
bility & Communication was part of the Group Management until
31 March 2021, and Gränges’ General Counsel was part of the Group
Management until 17 December 2021.
In March it was announced that Jörgen Rosengren had been
appointed as new CEO and President in Gränges. He succeeded Johan
Menckel, who in January 2021 had informed the Board that he had
decided to leave his position after eight years as CEO and 18 years
within Gränges. Oskar Hellström, the Deputy CEO, was Acting CEO in
August and September, 2021. Jörgen Rosengren assumed his position
as CEO and President on 1 October 2021.
Group Management holds monthly meetings to review the results
and financial position of the Group. Other questions dealt with at
these meetings include strategy matters and follow-up of budgets and
Board composition, attendance and remuneration 2021
Name
Elected
year
Independent
in relation to
the company/
owners
Attendance
Board
meetings
Attendance
Audit
Committee
meetings
Attendance
Remuneration
Committee
meetings
Board of
Directors’
fees, SEK
Audit
Committee
fees, SEK
Remuneration
Committee
fees, SEK
Total fees,
SEK
Fredrik Arp 2020 X 13/13 n/a 5/5 725,000 – 56,667 781,667
Carina Andersson 2014 X 12/13 n/a 5/5 320,000 – 28,333 348,333
Mats Backman 2018 X 12/13 5/5 n/a 320,000 116,667 – 436,667
Martina Buchhauser
1)
2021 X 6/6 3/5 n/a 216,667 36,667 – 253,333
Peter Carlsson 2016 X 11/13 n/a 4/5 320,000 – 28,333 348,333
Katarina Lindström 2016 X 12/13 5/5 n/a 320,000 53,333 – 373,333
Hans Porat 2016 X 12/13 n/a 5/5 320,000 – 28,333 348,333
Ragnhild Wiborg
2)
2014 X 7/7 2/5 n/a 103,333 16,667 – 120,000
Öystein Larsen 2010 13/13 n/a 5/5 40,000 – – 40,000
Konny Svensson 2013 11/13 5/5 n/a 40,000 – – 40,000
Elin Lindfors 2016 13/13 n/a n/a 40,000 – – 40,000
Fredrika Pettersson 2020 13/13 n/a n/a 40,000 – – 40,000
Total fees 2,805,000 223,333 141,667 3,170,000
1) Elected as new Board member at the AGM on 6 May 2021.
2) Resigned as Board member at the AGM on 6 May 2021.
63 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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forecasts. Subsidiaries are also monitored more directly by someone
from Group Management being chairman of the subsidiaries. These
boards also include other members of Group Management and, where
applicable, employee representatives. The subsidiaries’ boards moni-
tor day-to-day operations and approve each subsidiary’s strategy and
budget.
More information about Group Management can be found on page
69. Information about remuneration to senior executives can be found
on page 62 and in Note 10.
Sustainability governance
Gränges’ sustainability efforts are led by Group Management, which
includes the SVP Sustainability as of 1 April 2021. Group Management
ensures that Gränges’ global sustainability strategy, long-term tar-
gets and policies are aligned with the company’s vision and strategy.
Group Management also reviews and monitors regional sustainability
performance against sustainability targets, as well as makes deci-
sions related to global sustainability priorities.
The Group Sustainability department, headed by the SVP Sustaina-
bility, is responsible for coordinating, facilitating, and driving the
global sustainability strategy and long-term targets as well as issuing
sustainability-related policies. Other responsibilities include regular
communication and reporting on Gränges’ sustainability performance
and progress to internal and external stakeholders as well as coordi-
nating a continuous stakeholder dialogue. The regional Presidents are
responsible for executing and implementing local sustainability strat-
egies and targets, aligned with the global strategy and the local needs.
At the end of 2021, Gränges established an internal Sustainability
Board to ensure a systematic follow-up of Gränges’ sustainability
strategy execution at all regions and sites. This internal board is
chaired by the SVP Sustainability and is also represented by the CEO.
Gränges’ CEO regularly presents global sustainability performance
to the Board of Directors, who reviews and monitors performance
against the company’s targets. The Board of Directors is the body
which approves the company’s global sustainability strategy, long-
term targets, and policies, and adopts the annual sustainability
report.
To ensure integration of sustainability aspects into key functions
such as Purchasing, Sales, Production and Human Resources, as well
as to coordinate group-wide priorities and ensure best practice shar-
ing across the organization, Gränges has established cross-regional
and functional teams which meet regularly and where all regions are
represented.
Gränges has published a sustainability report each year since 2015,
and intends to continue to publish a report annually. The sustainability
information in this report has been prepared in accordance with GRI
Standards: Core option and constitutes Gränges’ Communication on
Progress in line with UN Global Compact guidelines. The report and its
contents have partially been externally assured by the company’s
auditors EY. GRI’s guidance on the reporting principles of materiality,
stakeholder inclusiveness, sustainability context, and completeness,
has been used to define the content of the report. The statutory sus-
tainability report in accordance with the Swedish Annual Accounts Act
has been issued by Gränges’ Board of Directors. See details on page
55. The report relates to the financial year 2021 and covers all fully
owned operations of the Group at the start of 2021. For more informa-
tion, refer to page 110. Gränges’ last sustainability report was pub-
lished on 18 March 2021.
Internal control and risk management regarding financial reporting
Under the Swedish Companies Act and the Code, the Board of Direc-
tors is responsible for ensuring that the company has good internal
control and routines that ensure compliance with established princi-
ples for financial reporting and internal control. The Board of Directors
must also ensure that financial reporting complies with the Compa-
nies Act, applicable accounting standards, and other requirements for
listed companies.
Framework
Gränges’ internal control complies with the established international
framework Internal Control Integrated Framework, published by the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO). According to the COSO model, review and assessment are car-
ried out in the areas of Control environment, Risk assessment and
management, Control activities, Information and communication, and
Monitoring and follow-up.
Gränges’ internal control process is designed to ensure with rea-
sonable certainty the quality and accuracy of financial reporting and
ensure that reporting is prepared in accordance with applicable laws
and regulations, accounting standards, and other requirements for
listed companies in Sweden. This requires a healthy control environ-
ment, reliable risk assessment, established control activities, and
that information, communication, and monitoring works satisfactorily.
1 Control environment
The control environment is defined by the Group’s organizational
structure, Group Management’s working methods and values, and
other roles and responsibilities within the organization. The Audit
Committee assists the Board of Directors with essential accounting
issues, and monitors the internal control of the financial reporting. To
maintain an effective control environment and robust internal con-
trols, the Board of Directors has delegated the day-to-day responsibil-
ity to the CEO, who in turn has allocated responsibilities to other Group
Management members.
Quality in the financial reporting is ensured through different mea-
sures and routines. The company has policies and manuals for finan-
cial reporting, including the Financial Management Policy, the Metal
Management Policy, the Investment Policy and the Group Accounting
>> GROUP MANAGEMENT
President and CEO
Jörgen Rosengren
President Americas
Patrick Lawlor
President Asia
Colin Xu
President Europe
Fredrik Spens
SVP Sustainability
Sofia Hedevåg
CFO and Deputy CEO
Oskar Hellström
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Manual, which were all updated in 2020. In addition to the above, there
are important group-wide steering documents such as the Code of
Conduct, the Insider Policy and the Communication Policy. There is
ongoing work to further develop policies and manuals.
Gränges has an externally managed Whistleblower function which
can be accessed via the company’s intranet, the external website or by
telephone. The function aims to detect irregularities that may seri-
ously harm Gränges’ business or employees, and it enables employees
and external business partners to provide information anonymously
and without fear of retaliation. By quickly uncovering and remediating
irregularities, Gränges is in a better position to deal with the underly-
ing causes before they become unmanageable. Gränges takes great
consideration of the protection of personal privacy and handles sub-
mitted information in line with applicable legislation and regulation.
In 2021, there were two cases (eight) reported through the Whistle-
blower function whereof one related to internal working conditions
and the other one is under investigation. No case qualified as a whis-
tleblower case in line with the GDPR regulation on storing and pro-
cessing of personal data. No confirmed corruption incidents were
detected and no business contracts were breached or not renewed
due to corruption.
2 Risk assessment and management
To handle the internal and external risks that Gränges’ organization is
exposed to, regular risk assessments are carried out. Risks that may
affect financial reporting are identified, measured, and managed. This
is an integral part of the daily reporting to Group Management and the
Board of Directors, and forms the basis for assessing risks of errors in
financial reporting.
Gränges’ operations are characterized by processes with estab-
lished routines and systems. Risk assessment therefore largely
occurs within the framework of these processes. At Group level, only
general risk assessments are conducted. Managers identify, monitor,
and evaluate these risks, which creates the basis for making well-
rounded and correct business decisions at all levels. Financial risks
such as currency, commodity, refinancing, and counterparty risk, as
well as interest rate and credit risk, are mainly handled by the parent
company’s accounting and finance functions according to the Finan-
cial Management Policy, the Metal Management Policy and Group
Accounting Manual.
A description of the Group’s risks and risk management can be
found on pages 47–52.
3 Control activities
The main purpose of control activities is to prevent and discover mate-
rial errors in financial reporting at an early stage, thereby being able to
manage and resolve them. Control activities are conducted at a gen-
eral level as well as at more detailed levels throughout the Group, and
are both manual and automated in nature. Routines and activities
have been designed to manage and resolve material risks related to
financial reporting, and that are identified in risk assessments.
Depending on the character and type of control activity, corrective
action, implementation, documentation, and quality assurance, occur
at a group or subsidiary level. As is the case for other processes, each
manager is responsible for the completeness and accuracy of the con-
trol activities.
The Group has a common consolidation system, where the legal
entities report, which provides good internal control of financial
Gränges’ Board of Directors has adopted a number of steering docu-
ments that apply to all Gränges Group employees globally. These
documents provide a framework and guide for how the company
conducts business at Gränges and outline how responsibility is divided
between the Board of Directors, management and employees. In
some cases, local steering documents are connected to the global
steering documents.
Global Directives
The Global Directives set out the mandatory requirements for all
Group companies and employees of Gränges. Directives can be in the
form of policies, principles, guidelines and instructions. A policy is a
guiding principle to set a direction and dictates what employees are
supposed to do. The Global Directives are adopted by the Board of
Directors.
• Code of Conduct
• Accounting Manual
• Anti-Corruption Policy
• Authorization Policy
• Communication Policy
• Diversity Policy
• Financial Management Policy
• Global Privacy Policy
• Information Security Policy
• Insurance Policy
• Internal Control Policy
• Investment Policy
• Metal Management Policy
• Remuneration Policy
>> INTERNAL STEERING DOCUMENTS
1 Control Environment 3 Control activities
Risk assessment
and management
5 Monitoring and follow-up
>> FRAMEWORK
Information and
communication
42
65 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
reporting. Most controls and processes are automated and authoriza-
tion to access IT systems is limited. Control activities are performed at
all levels of the Group. One example is the established controller func-
tion that analyses and monitors deviations and reports its findings to
other parts of the Group.
Group Management has regular meetings with subsidiary manag-
ing directors to discuss operations, financial position, and results, as
well as key financial and operative key figures. The Board of Directors
continually analyses reports on operations in which Group Manage -
ment describes the previous period, and comments on the Group’s
financial position and results. Significant fluctuations and deviations
are therefore followed up, which limits the risks of errors in the finan
-
cial reporting.
The closing of the books and work on the annual accounts are
processes where there is further risk that errors arise in financial
reporting. Naturally, this work is less repetitive and often includes
several instances where estimates are made. Important control activi-
ties include ensuring that there is a well-functioning reporting struc-
ture in which subsidiaries report using standardized models, and that
important income and balance sheet items are specified and com-
mented on.
4 Information and communication
Effective and accurate internal and external information is important
to ensure full and accurate financial reporting on time. Gränges’ finan-
cial reporting follows Group guidelines and policies, and is updated
and communicated regularly by Group Management to all relevant
staff.
The accounting function has operational responsibility for day-to-
day financial reporting, and works to ensure that the Group’s guide-
lines, policies, and instructions are applied uniformly across the
Group. The accounting function also identifies and communicates
deficiencies in financial reporting.
Policies, guidelines, and manuals are regularly updated and are
available on the company’s intranet.
All communication from Gränges must be timely, reliable, accurate,
and up to date. External communication should be in accordance with
the Group’s Communication Policy, Nasdaq’s regulatory framework for
issuers, and other applicable regulations. The financial information
should provide the capital and equity markets with a comprehensive
and clear picture of the company, its financial position, development,
and strategy. All financial reports and press releases are published
simultaneously to Nasdaq Stockholm and Finansinspektionen and
published on the company’s external website.
5 Monitoring and follow-up
The Board’s monitoring of the internal control of financial reporting
takes place primarily through the Audit Committee, including the mon-
itoring of the internal audit, and through contact with the external
auditors. External auditors annually monitor selected areas of internal
control within the framework of the Group audit and report the out-
come of their audit to the Audit Committee and Group Management.
Material observations are also reported directly to the Board of Direc-
tors. Regarding the 2021 audit, the auditors have monitored the inter-
nal control in selected key processes and have reported their findings
to the Audit Committee.
66 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Board of Directors
FREDRIK ARP
Chairman of the Board
Born: 1953
Education: M.Sc. Economics
and Ec. Doctor h.c., Lund
University.
Position: Chairman of the
Board. Elected to the Board in
2020. Chairman of the Remu-
neration Committee.
Other assignments: Chairman
of the Board in Bravida Holding
AB, Nolato AB and Hövding
Sverige AB. Board member in
Swedfund International AB.
Previous positions: Chairman
of the Board in, among others
Ahlsell AB, Bröderna Edstrand
AB, Munksjö AB, Thule AB, Par-
ques Reunidos SA and Qioptiq
SA. Board member in, among
others Vattenfall AB, Nuevolu-
tion AB, Getinge AB and Techno-
gym S.p.a. CEO for PLM AB,
Volvo Personvagnar AB and
Trelleborg AB.
Own and related parties’
shareholding: 13,636 shares.
MATS BACKMAN
Born: 1968
Education: B.Sc. Business
Administration, Stockholm
University.
Position: Board member.
Elected to the Board in 2018.
Chairman of the Audit Commit-
tee.
Other assignments: Group CFO
in Trustly.
Previous positions: CFO and
Executive Vice President of
Financial Affairs in Veoneer,
Inc. CFO at Autoliv, Inc. Various
management positions within
Sandvik Group, including as
CFO. Various management
positions in Outokumpu,
Nordea and Boliden.
Own and related parties’
shareholding: 10,000 shares.
HANS PORAT
Born: 1955
Education: M.Sc. Engineering,
Material Science, Royal
Institute of Technology.
Position: Board member.
Elected to the Board in 2016.
Member of the Remuneration
Committee.
Other assignments: Board
member in Ecolean AB.
Previous positions: President
and CEO in Nolato AB, various
executive positions in ABB,
Deputy CEO in Trelleborg AB,
President of Gadelius Japan.
Board member in Cloetta AB,
Lindab International AB and
Nolato AB.
Own and related parties’
shareholding: 0 shares.
KATARINA LINDSTRÖM
Born: 1965
Education: M.Sc. Engineering,
Material Science, Royal
Institute of Technology.
Position: Board member.
Elected to the Board in 2016.
Member of the Audit Commit-
tee.
Other assignments: COO and
Executive Vice President Tech-
nology and Operations in
Hempel A/S. Elected member
of the Swedish Royal Engineer-
ing Academy.
Previous positions: Board
member in Skövde Högskola,
Gothia Science Park and Volvo
Bussar AB. President Global
Operations, Munters AB. Senior
Vice President International
Manufacturing & Senior Vice
President, Operations and Sup-
ply Chain Management in Volvo
Group Trucks Operation. Vari-
ous management positions in
AB Volvo 1988–2018.
Own and related parties’
shareholding: 8,687 shares.
CARINA ANDERSSON
Born: 1964
Education: M.Sc. Engineering,
Material Science, Royal
Institute of Technology.
Position: Board member.
Elected to the Board in 2014.
Member of the Remuneration
Committee.
Other assignments: Board
member in Beijer Alma AB,
Systemair AB, BE Group AB,
Detection Technology Oyj and
Swedish Stirling AB.
Previous positions: General
Manager Powder Technology,
Sandvik Materials Technology.
CEO of Ramnäs Bruk. Board
member in Mälardalens Hög-
skola and SinterCast AB.
Own and related parties’
shareholding: 3,274 shares.
MARTINA BUCHHAUSER
Born: 1966
Education: M.Sc. Management,
Stanford University.
Position: Board member.
Elected to the Board in 2021.
Other assignments: Senior
advisor at H&Z Management
Consulting. Member of the
supervisory board at Sono
Group N.V.
Previous positions: Chief Pro-
curement Officer of Volvo Car
Corporation and member of the
management team. Senior Vice
President of Purchasing and
Supplier Network for Interior at
BMW. Vice President of Pro-
curement at MAN Truck & Bus.
Various management positions
within the Purchasing and Sup-
plier Quality areas of Opel and
General Motors.
Own and related parties’
shareholding: 0 shares.
PETER CARLSSON
Born: 1970
Education: B.Sc. Business
Administration, Luleå
University of Technology.
Position: Board member.
Elected to the Board in 2016.
Member of the Remuneration
Committee.
Other assignments: CEO and
Board member in Northvolt.
Board member in Orbital Sys-
tems and Q Group.
Previous positions: Vice Presi-
dent Supply Chain and Chief
Procurement Officer at Tesla
Motors. Senior Vice President
and Chief Procurement Officer
at NXP Semiconductors. Head
of Sourcing at Sony Ericsson.
Board member in Metso and
Rosti Group.
Own and related parties’
shareholding: 0 shares.
67 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Employee representatives Auditor
ÖYSTEIN LARSEN
Employee representative
Born: 1957
Description: Senior IT Advisor,
employed at Gränges since
1979. Employee representative
of the Board since 2010. Repre-
senting Unionen.
Own and related parties’
shareholding: 638 shares.
ELIN LINDFORS
Deputy employee
representative
Born: 1988
Education: B.Sc. Engineering,
Material Science, Royal Insti-
tute of Technology.
Description: Technical man-
ager re-melting, employed at
Gränges since 2013. Deputy
employee representative of the
Board since 2016. Represent-
ing the Swedish Association of
Graduate Engineers and the
Union for Professionals.
Own and related parties’
shareholding: 568 shares.
ANDREAS TROBERG
Auditor in charge
Ernst & Young AB
Born: 1976
Description: Authorized public
accountant and member of
FAR.
Other assignments: Sectra,
Moberg Pharma and Bokus-
gruppen.
KONNY SVENSSON
Employee representative
Born: 1954
Education: Electrician. Basic
Board & Governance Training.
Description: Maintenance
electrician, employed at
Gränges since 1997. Employee
representative of the Board
since 2013. Representing IF
Metall. Employee representa-
tive of Gränges Finspång AB.
Own and related parties’
shareholding: 319 shares.
FREDRIKA PETTERSSON
Deputy employee
representative
Born: 1980
Description: Heavy conveyor/
machine operator, employed at
Gränges since 2017. Deputy
employee representative of the
Board since 2020. Senior safety
representative and vice Chair-
man in Verkstadsklubben IF
Metall in Finspång as well as
assignments on department
and union level.
Own and related parties’
shareholding: 0 shares.
68 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Group Management
OSKAR HELLSTRÖM
CFO and Deputy CEO
Born: 1979
Education: M.Sc. Engineering,
Linköping University and B.Sc.
Business Administration &
Economics, Stockholm
University.
Position: CFO since 2013 and
Deputy CEO since 2017. Mem-
ber of Group Management
since 2013.
Other assignments: Board
member in Beijer Alma AB.
Previous positions: CFO in
Sapa Heat Transfer, 2011–2013.
Director Group Development &
Control in Sapa Group, 2009–
2011. Strategy Manager in
Sapa Group, 2008–2009. Con-
sultant at Booz Allen Hamilton,
2005–2008.
Own and related parties’
shareholding: 21,300 shares,
50,491 synthetic shares
1)
and
150,000 call options.
JÖRGEN ROSENGREN
President and CEO
Born: 1967
Education: M.Sc. Electrical
Engineering, Lund Institute of
Technology.
Position: President and CEO
since 2021. Member of Group
Management since 2021.
Other assignments: Board
member of OEM International.
Previous positions: President
& CEO in Bufab Group, 2012–
2021. Vice President, Global
Category Manager in
Husqvarna Group, 2004–2011,
Electrolux 2003, McKinsey &
Company, 1997–2002, Philips
Electronics 1993–1997.
Own and related parties’
shareholding: 100,000 shares
and 12,444 synthetic shares
1)
.
SOFIA HEDEVÅG
SVP Sustainability
Born: 1980
Education: M.Sc. Business
Administration, Stockholm
School of Economics.
Position: SVP Sustainability
since 2020. Member of Group
Management since 2021.
Other assignments: –
Previous positions: Member of
extended Group Management
2020–2021. VP Sustainability in
Gränges 2017–2020. VP Group
Business Control at Swedish
Match 2014–2017. Director
Corporate Sustainability &
Business Analysis at Swedish
Match 2012–2014. Various
positions at Swedish Match
2008–2012.
Own and related parties’
shareholding: 4,250 shares,
10, 008 synthetic shares
1)
and
33,000 call options.
PATRICK LAWLOR
President Americas
Born: 1964
Education: B.Sc. Economics
and certified Accountant,
College of Commerce, Dublin.
Position: President Americas
since 2016. Member of Group
Management since 2016.
Other assignments: Board
member in CanArt Extrusions
LLP and Aluminium Association
in the US.
Previous positions: President
Americas in Sapa Extrusions,
2010–2015. CFO in Sapa Extru-
sion North America, 2009–
2010. CFO in Indalex, Inc.,
2007–2009. Several manage-
ment positions in Norsk Hydro,
1997–2007.
Own and related parties’
shareholding: 105,385 syn-
thetic shares
1)
and 225,000
synthetic call options
2)
.
COLIN XU
President Asia
Born: 1976
Education: M.Sc. Economics
and Business Administration,
MBA, China Europe Interna-
tional Business School.
Position: President Asia since
2013. Member of Group
Management since 2013.
Other assignments: Supervisor
in Shanghai Realman Energy
Technology Co.
Previous positions: MD in Sapa
Heat Transfer Shanghai, 2011–
2013. Sapa Heat Transfer
Shanghai, 2001–2010, with
several leading management
positions since 2003.
Own and related parties’
shareholding: 42,140 synthetic
shares
1)
and 65,000 synthetic
call options
2)
.
FREDRIK SPENS
President Europe
Born: 1975
Education: M.Sc. Engineering,
Royal Institute of Technology.
Position: President Europe
since 2022. Member of Group
Management since 2022.
Other assignments: –
Previous positions: MD in
Gränges Finspång, 2020–2022.
VP Sales and Marketing,
Gränges Finspång, 2017–2020.
Head of Product Area Primary
Products in Sandvik Materials
Technology, 2014–2017, differ-
ent senior positions at Sandvik,
2006–2014. Consultant at BTS,
2000–2006.
Own and related parties’
shareholding: 4,655 shares,
9,993 synthetic shares
1)
and
43,000 call options.
1) Synthetic shares within investment program for senior management (IP 2020) and synthetic share equivalents within Long Term Incentive Programs (LTI 2019, LTI 2020, LTI 2021).
2) Synthetic call options within investment program for senior management (IP 2020).
69 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Financial statements content
GROUP
Consolidated income statement 71
Consolidated statement of comprehensive income 71
Consolidated balance sheet 72
Consolidated statement of changes in equity 73
Consolidated cash flow statement 74
Notes to the consolidated financial statements 75
Alternative performance measures 101
Definitions 102
Five-year summary 103
PARENT COMPANY
Parent company income statement 104
Parent company statement of comprehensive income 104
Parent company balance sheet 105
Parent company statement of changes in equity 106
Parent company cash flow statement 107
Notes to the parent company financial statements 108
Proposed appropriation of retained earnings 113
Auditor’s report 114
NOTES GROUP
Note 1 General information 75
Note 2 Basis of preparation of consolidated financial statements 75
Note 3 New accounting standards 75
Note 4 Accounting standards 76
Note 5 Significant accounting assessments and assumptions 80
Note 6 Operating segment information 81
Note 7 Geographic breakdown of net sales, non-current assets
and average number of employees
81
Note 8 Revenue from contracts with customers 82
Note 9 Lease income 82
Note 10 Payroll expenses 83
Note 11 Pensions 85
Note 12 Remuneration to auditors 87
Note 13 Other operating expenses 87
Note 14 Items affecting comparability 87
Note 15 Joint arrangements 87
Note 16 Financial income and costs 87
Note 17 Taxes 88
Note 18 Earnings per share 89
Note 19 Intangible assets 89
Note 20 Property, plant and equipment 90
Note 21 Right-of-use-assets and lease liabilities 91
Note 22 Inventories 91
Note 23 Overview of financial instruments 92
Note 24 Current receivables 94
Note 25 Cash and cash equivalents 94
Note 26 Share capital 94
Note 27 Provisions 94
Note 28 Other current liabilities 94
Note 29 Financing and interest-bearing liabilities 95
Note 30 Financial risk 95
Note 31 Derivatives and hedging 98
Note 32 Acquisition 99
Note 33 Pledged assets, guarantees and contingent liabilities 100
Note 34 Related party transactions 100
Note 35 Events after the balance sheet date 100
NOTES PARENT COMPANY
Note 1 Accounting principles 108
Note 2 Financial risk management 108
Note 3 Breakdown of net sales by area of operation 108
Note 4 Items affecting comparability 108
Note 5 Operating lease payments 108
Note 6 Remuneration to auditors 109
Note 7 Payroll expenses 109
Note 8 Financial income and costs 109
Note 9 Taxes 109
Note 10 Intangible assets 109
Note 11 Property, plant and equipment 110
Note 12 Shares in Group companies 110
Note 13 Share capital 110
Note 14 Provision for pensions and similar obligations 110
Note 15 Other provisions 111
Note 16 Interest-bearing liabilities 111
Note 17 Accrued expenses and deferred income 111
Note 18 Pledged assets and contingent liabilities 112
Note 19 Related party transactions 112
Note 20 Proposed appropriation of retained earnings 112
70 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Consolidated income statement
SEK million Note 2021 2020
Sales revenues 34 18,044 10,970
Other operating revenues 86 38
Net sales 6, 7, 8 18, 130 11 ,008
Cost of materials –12,443
1)
–6, 778
2)
Payroll expenses 10, 11 –1 ,640 –1,362
Other operating expenses 13 –2,376 –1 ,697
Depreciation, amortization and impairment charges 19, 20, 21 –678 –553
Items affecting comparability 14 –159 –33
Operating profit 833 584
Profit from joint ventures 15 2 2
Financial income 16 6 10
Financial costs 16 –98 –142
Profit before taxes 743 454
Income tax 17 –147 –91
Profit for the year 595 363
Profit for the year attributable to
– owners of the parent company 595 363
– non-controlling interests 0 0
Earnings per share
Earnings per share, basic, SEK 18 5.60 4.21
Earnings per share, diluted, SEK 18 5.58 4.21
1) Includes items affecting comparability of SEK – 1 6 million, see Note 14 for further information.
2) Includes items affecting comparability of SEK –31 million, see Note 14 for further information.
Consolidated statement of comprehensive income
SEK million Note 2021 2020
Profit for the year 595 363
Items not to be reclassified to profit/loss for the year
Remeasurement of pensions before tax 11 25 1
Tax on above 17 –8 0
Total items not to be reclassified to profit/loss for the year 17 1
Items to be reclassified to profit/loss for the year
Change in hedging reserve before tax 31 –107 69
Tax on above 17 19 –8
Total items to be reclassified to profit/loss for the year –88 61
Translation differences 466 –463
Comprehensive income for the year 990 –37
Comprehensive income for the year attributable to
– owners of the parent company 990 –37
– non-controlling interests 0 0
71 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Consolidated balance sheet
SEK million Note 2021 2020
ASSETS
Non-current assets
Intangible assets 19 1 ,407 1 ,510
Property, plant and equipment 20 6,498 5,834
Right-of-use assets 21 226 232
Deferred tax assets 17 55 20
Interests in joint ventures 15 16 13
Other non-current receivables 23, 30 122 24
Total non-current assets 8,323 7 ,633
Current assets
Inventories 22 3,933 2,398
Receivables 23, 24, 30, 34 2,696 2,021
Interest-bearing receivables 23 5 128
Cash and cash equivalents 25 809 1 ,473
Total current assets 7 ,444 6,020
TOTAL ASSETS 15,767 13,652
SEK million Note 2021 2020
EQUITY AND LIABILITIES
Equity
Share capital 26 142 142
Share premium 26 1 ,885 1 ,885
Reserves 571 176
Retained earnings 4,331 3, 765
Equity attributable to owners of the parent company 6,930 5,968
Non-controlling interests 2 2
Total equity 6,932 5,970
Non-current liabilities
Deferred tax liabilities 17 438 314
Pension liabilities 11 348 358
Interest-bearing liabilities 23, 29 2,414 2,351
Provisions 27 61 20
Other non-current liabilities 23, 30 35 26
Total non-current liabilities 3,297 3,068
Current liabilities
Interest-bearing liabilities 23, 29 1 ,694 2, 184
Current tax liabilities 17 12 6
Provisions 27 29 34
Other current liabilities 23, 28, 30 3,803 2,389
Total current liabilities 5,539 4,614
TOTAL EQUITY AND LIABILITIES 15,767 13,652
72 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Consolidated statement of changes in equity
Reserves
SEK million Note
Share
capital
Share
premium Hedging reserve
Defined
benefit
pension plans
Translation
reserve
Retained
earnings
including profit
for the year
Total Gränges’
shareholders
Non-controlling
interests
Total
equity
Opening balance at 1 January 2021 142 1 ,885 63 –58 171 3, 765 5,968 2 5,970
Profit for the year – – – – – 595 595 0 595
Items in comprehensive income – – –88 17 466 – 395 – 395
Group comprehensive income – – –88 17 466 595 990 0 990
Dividend – – – – – –117 –117 – –117
Share swap 31 – – – – – 88 88 – 88
Closing balance at 31 December 2021 142 1 ,885 –2 5 –41 637 4,331 6,930 2 6,932
Opening balance at 1 January 2020 101 49 2 –59 634 3,587 4,314 – 4,314
Profit for the year – – – – – 363 363 0 363
Items in comprehensive income – – 61 1 –463 – –401 – –401
Group comprehensive income – – 61 1 –463 363 –37 0 –37
Business combinations 32 – – – – – – – 2 2
Share swap 31 – – – – – –193 –193 – –193
Option premium 10 – – – – – 8 8 – 8
Issue in kind 26 3 212 – – – – 215 – 215
Rights issue 26 38 1 ,663 – – – – 1 , 701 – 1 , 701
Rights issue transaction costs 26 – –39 – – – – –39 – –39
Closing balance at 31 December 2020 142 1 ,885 63 –58 171 3, 765 5,968 2 5,970
73 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Consolidated cash flow statement
SEK million Note 2021 2020
Operating profit 833 584
Depreciation and impairment charges 678 553
Other non-cash items 14 215 45
Change in net working capital etc. –623 290
Income taxes paid –116 –59
Cash flow from operating activities 988 1 ,414
Acquisitions 32 –90 –1 , 196
Investments in property, plant and equipment and intangible assets 19, 20 –836 –557
Divestments of property, plant and equipment – 17
Cash flow from investing activities –926 –1 , 736
Dividend –117 –
Share swap 31 – –193
Option premium 10 – 8
Rights issue – 1 ,662
Interest paid 16 –87 –152
Interest received 16 5 11
New loans 6,466 5, 785
Repayment of loans –7 ,061 –5,970
Cash flow from financing activities –793 1, 149
Cash flow for the year –732 827
Cash and cash equivalents at 1 January 1 ,473 747
Cash flow for the year –732 827
Translation difference on cash and cash equivalents 67 –101
Cash and cash equivalents at 31 December 25 809 1 ,473
Reconciliation between opening and closing balance of liabilities whose cash flows
are recognized in financing activities
SEK million 2021 2020
Interest-bearing liabilities at 1 January 4,535 3,853
Cash flow –595 –185
Non-cash items
Translation differences 166 –239
Business combinations – 1,107
Change in accrual borrowing costs 3 0
Interest-bearing liabilities at 31 December 4,109 4,535
74 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Notes to the consolidated financial statements
>> 1 General information
The Group’s parent company, Gränges AB , is a Swedish public listed
company. Company registration number is 556001-6122, and its regis-
tered office is in Stockholm with its head office on Linnégatan 18,
by the Board of Directors of Gränges AB on 16 March 2022.
>> 2 Basis of preparation of consolidated
financial statements
Basis of preparation
The Gränges Group includes, in addition to the parent company
Gränges AB, directly and indirectly held subsidiaries of Gränges AB.
Significant accounting principles applied in preparing these con -
solidated financial statements are described below. Unless otherwise
stated, these principles have been applied consistently for all the
years presented. The consolidated financial statements have been
prepared and presented in compliance with the Inter national Finan-
cial Reporting Standards (IFRS), as adopted by the EU,the Swedish
Annual Accounts Act and RFR 1 Supplementary Accounting Rules for
Groups.
The financial statements have been prepared by applying the cost
method, with the exception of financial assets and liabilities (includ-
ing derivatives), which are measured at fair value.
Preparing financial statements in accordance with IFRS requires
the use of important accounting estimates. Management is also
required to make certain judgements in applying the Group’s
accounting principles. Areas which involve a high degree of judge-
ment, are complex or where assumptions and estimates have a mate-
rial impact on the consolidated accounts are described in Note 5.
An asset or liability is classified as current when it is a part of an
entity’s normal operations, is primarily held for trading, matures
within 12 months and consists of cash and cash equivalents at
the balance sheet date. Other items are classified as non-current.
A dividend is classified as a liability only upon formal approval by
a general meeting of shareholders.
Unless otherwise stated, all amounts are stated in SEK million.
Negative amounts refer to expenses or outgoing payments (cash flow).
Items affecting comparability
Items affecting comparability are presented in Note 14 and refer to
non-recurring income and expenses.
The primary purpose of separating significant non-recurring items
is to facilitate understanding of the underlying business development.
Consolidation
Subsidiaries
All companies over which the Group exercises a controlling influence
are classified as subsidiaries. The Group controls a company when it is
exposed to or has the right to a variable return from its involvement with
the company and has the ability to affect those returns through its power
over the company. Subsidiaries are included in the consoli dated accounts
as of the date when the control is transferred to the Group and are con-
solidated up to the date when the controlling influence ceases.
Business combinations are accounted for in accordance with the
acquisition method. The consideration transferred for the acquisition
of a subsidiary comprises the fair values of the assets transferred,
liabilities incurred to the former owners of the acquired business and
equity interests issued by the Group. The consideration also includes
fair value of all assets or liabilities resulting from a contingent consid-
eration arrangement.
Identifiable assets acquired and liabilities and contingent liabili-
ties assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date. The Group
recognizes any non-controlling interest in the acquired entity either
at fair value or at the non- controlling interest’s proportionate share
of the acquired entity’s net identifiable assets.
Acquisition-related expenditures are expensed as incurred.
Intercompany transactions, balances and unrealized gains on trans-
actions between Group companies are eliminated. Unrealized losses
are also eliminated. When necessary, amounts reported by subsidiaries
have been adjusted to conform with the Group’s accounting policies.
Joint arrangements
Shares in companies in which the Group exercises a controlling influ-
ence are classified as either joint operations or joint ventures depend-
ing on the contractual rights and obligations of each investor. Joint
arrangements are included in the consolidated accounts as of the date
when significant influence is transferred to the Group and are consoli-
dated up to the date when the significant influence ceases.
For joint operations, assets, liabilities, revenues and expenses are
recognized in the consolidated accounts in relation to ownership.
Interests in joint ventures are accounted for using the equity method.
Under the equity method, investments in joint ventures are initially
carried at cost in the consolidated statement of financial position. The
carrying amount is then increased or decreased to take account of the
Group’s share of the profit or loss and other comprehensive income
from its joint ventures after the date of acquisition. The Group’s share
of the profit or loss is presented in the line “Profit from joint ventures”
in the income statement and the line “Interests in joint ventures” in the
balance sheet. For further information regarding joint arrangements,
see Note 15.
Foreign currency translation
Functional currency and presentation currency
Items included in the financial statements of each of the Group’s
entities are measured using the currency of the primary economic
environment in which the operates (’the functional currency’). The
consolidated financial statements are presented in Swedish krona
(SEK), which is the Group’s presentation currency.
Transactions and balance sheet items
Transactions in foreign currency are translated to the functional
currency at the exchange rates applying on the transaction date or
the date when the items were remeasured. Foreign exchange gains
and losses arising from such transactions and upon translation of
monetary assets and liabilities in foreign currency at closing day
rates are recognized in the income statement. The exception is when
the transactions constitute hedges and meet the criteria for hedge
accounting of cash flows or net investments, in which case any gains
and losses are recognized in other comprehensive income.
Financial receivables and liabilities in foreign currency are stated at
the closing rate and any gain or loss is recognized in financial items in
the income statement. Other monetary items in foreign currency are
carried at the closing rate and any gain or loss is recognized in operat-
ing items in the income statement.
>> 3 New accounting standards
New standards, amendments and interpretations effective from
1 January 2021 or later have not had any material impact on these
financial statements.
New standards, amendments and interpretations effective from
1 January 2022 are not expected to have any significant impact on the
Group’s financial statements.
The Group’s exposure to the reform of IBOR-rates is limited. Gränges
has outstanding exposures in STIBOR and USD LIBOR. At year-end
2021, the Group had one floating rate loan of USD 100 million maturing
after the indicated USD LIBOR cessation date.
75 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Revenue from contracts with customers
Revenue is recognized to depict the transfer of promised goods
or services to Gränges’ customers in an amount that reflects the
consideration which expects to be entitled to in exchange for those
goods or services.
Gränges mainly sells rolled products for heat exchangers and
selected niche applications. Revenue is generated through sale of
material that is produced for a certain customer and application.
Revenue is recognized at the point in time when control is transferred
to the customer.
The transaction price for Gränges’ products is based on the added
value Gränges offers in terms of material properties and production
complexity (fabrication price), and the price of the raw material, alu-
minium (metal price). The cost of the aluminium is mainly passed on to
the customer through metal price clauses where the aluminium price
is usually determined in connection with the delivery. Commodity
price risk is described in Note 30.
In determining the transaction price for Gränges’ products the Group
considers the effect of variable consideration. The variable considera-
tion, early payment discounts and retrospective volume discounts, is
estimated at contract inception and included in the transaction price
only to the extent that it is highly probable that a significant reversal of
accumulated revenue will not occur when the uncertainty associated
with the variable consideration is subsequently resolved.
At the end of each reporting period, Gränges updates the estimated
transaction price including updating its assessment of whether an
estimate of variable consideration is constrained.
Other revenue is limited and primarily refer to rental revenue from
properties in Finspång, Sweden. The rental revenue is recognized on a
straight-line basis over the lease term.
Gains or losses on the sale of property, plant and equipment are
accounted for as “Other operating revenues” or “Other operating
expenses” and are included in the income statement.
Statement of comprehensive income
The statement of comprehensive income includes items which are
recognized in equity but which are not included in the regular profit or
loss for the period. The items in the statement are actuarial gains and
losses on pensions, changes in the hedging reserve in hedging trans-
actions and currency translation effects.
Assets
Intangible assets
The Group has expenses for research and development. Expenditure
for research is carried as a cost immediately while expenditure for
development is recognized as an intangible asset if the underlying
economic factors are identifiable and represent future economic
benefits controlled by the Group.
The Group is running a large number of development projects but
the criteria for recognizing the projects as intangible assets are
currently not met as the future economic benefits for the company
cannot be identified and because it is not possible to obtain any
degree of certainty during the development phase of the intangible
assets.
Capitalized expenditure for internally generated or specially adapted
software is recognized as intangible assets. These are depreciated on
a straight-line basis over tio years.
The customer relationships acquired as part of business combina-
tion are recognized at their fair value at the date of acquisition and are
amortized on a straight-line basis over their estimated useful lives of
12 to 20 years.
Goodwill arises on the acquisition of subsidiaries and represents
the excess of the consideration transferred over the fair value of the
identifi able net assets acquired. Goodwill impairment reviews are
undertaken annually or more frequently if events or changes in cir-
cumstances indicate a potential impairment. The carrying amount of
the cash-generating unit to which the goodwill is attributed to is com-
pared with the recover able amount, which is the highest of the value in
use and the fair value less cost of disposal. Any impairment is recog-
nized immediately as an expense and is not sub-sequently reversed.
Other acquired intellectual property rights are amortized over the
time of the rights.
Property, plant and equipment
Property, plant and equipment are tangible, long-lived assets which
are intended for the production or delivery of goods or for administra-
tive purposes. They are stated at cost in the balance sheet less accu-
mulated depreciation and impairment. Maintenance of assets is
recognized in operating expenses when the maintenance is carried
outwhile more significant periodic maintenance and expenses for
replacements and improvements are accounted for as an investment
and added to the cost of the assets.
To distribute the cost down to the estimated residual value, items of
property, plant and equipment are depreciated on a straight-line
basis, divided into different components, over their useful lives using
the following percentage rates:
• buildings and land improvements 10–40 years,
• machinery, inventory and installations 5–30 years,
• fixtures and vehicles 5–20 years,
• IT equipment 5 years.
Useful lives and residual values of assets are reviewed each year and
adjusted where required.
If the residual value exceeds the carrying amount no further depreci-
ation
charges are recognized. This applies especially to buildings. If
there are indications of impairment of an asset, the asset is written
down to its recoverable amount if this is lower than the carrying
amount. The recoverable amount is the higher of net realisable value
and value in use.
Loan expenses directly attributable to the production of the Group’s
own property, plant and equipment are recognized as part of the cost
of the asset.
Right-of-use assets
Carrying amounts for right-of-use assets and lease liabilities are
based on cash flows at present value during expected contract peri-
ods. Discount rates are determined on the basis of assumptions
regarding interest rates for loans during the corresponding period and
with corresponding collateral. Right-of-use assets with contracts
shorter than 12 months or which terminate within 12 months from the
transition date are classified as short-term contracts and are there-
fore not included in the reported liabilities or rights of use. In addition,
rights of use for office equipment or other low-value assets have also
been classified as low-value contracts and are not included in the
reported liabilities or right-of-use assets.
Right of use assets are depreciated from the commencement date
of the contract and follow the depreciation period that is the shortest
of the economic life or the contract period. At the commencement of
a new lease agreement, an assessment is made whether it is reason-
able or not to exercise an option to extend the lease, or the use of the
opportunity to purchase the underlying assets, or utilize early termi-
nation. This means that Gränges as a lessee itself determines which
contract length is considered reasonable instead of taking into
account the termination clause in the agreements.
Inventories
Inventories are measured at the lower of cost and net realisable value.
Purchased goods are measured at cost in accordance with the FIFO
principle while own-produced finished goods and products in progress
are measured at production cost. A deduction is made for obsoles
-
cence. The net realisable value is the estimated selling price less selling
costs. For a description of inventories as hedged item in a fair value
hedge see “Fair value hedging”, under section “Financial Instruments”.
Cash and cash equivalents
Cash and cash equivalents comprise cash and cash equivalents with
maturities of up to three months and only subject to insignificant
changes in value.
Provisions and liabilities
Pensions
The Gränges Group’s pension system in Europe and US primarily con-
sists of defined contribution plans, but defined pension benefit plans
also exists.
>> 4 Accounting standards
76 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
For defined contribution pension plans the company has a responsi-
bility to make contractual payments for its employees’ future pensions.
Future pensions are determined by the size of contributions and the
return on the plan assets. After the contributions have been paid the
company has no further payment obligations under the defined contri-
bution plan. No provisions are therefore made in the balance sheet.
The company’s pension costs for its defined contribution plans
consist of payments to employees’ pension plans during the reporting
period and are accounted for as payroll expenses.
Defined benefit pension plans are based on a promise from the
company to the employees that they will receive a certain pension
upon retirement, normally defined as a percentage of their final
salary. The company is responsible for the size of the future pension
benefit and the economic value of this obligation are recognized in
the income statement and balance sheet.
The liability or asset recognized in the balance sheet in respect
ofdefined benefit pension plans is the present value of the defined
benefit obligation at the end of the reporting period less the fair value
of plan assets. The defined benefit obligation is calculated annually
by independent actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by
discounting the estimated future cash outflows using interest rates
of high-quality corporate bonds that are denominated in the currency
in which the benefits will be paid, and that have terms approximating
to the terms of the related obligation. For the Swedish plans, mort-
gage bonds are used to determine the discount rate.
The cost relating to service during the current period is accounted
for as payroll expenses. The net interest cost is calculated by applying
the discount rate to the net balance of the defined benefit obligation
and the fair value of plan assets. This cost is included in financial
costs in the income statement.
Remeasurement gains and losses arising from experience adjust-
ments and changes in actuarial assumptions are recognized in the
period in which they occur, directly in other comprehensive income.
Provisions
Provisions are recognized for potential loss-making contracts and for
restructuring when the decision to restructure is made. Provisions do
not cover any potential future operating losses. As regards restructur-
ing reserves, there must exist a detailed plan identifying which opera-
tions will be restructured as well as a well-founded expectation
among those affected by the restructuring. It must also be possible
to reliably estimate the cost of the restructuring. The outcome of the
Group’s long-term incentive programme (LTI) is dependent on the
Gränges’ share’s total return. Expected costs for LTI is reported as
provision.
Provisions are calculated based on the best estimate of expected
costs. If the effect is significant, expected future cash flows will be
discounted.
Contingent liabilities and contingent assets
A contingent liability or contingent asset is a potential obligation or
potential asset whose existence is uncertain and which will be confirmed
by the occurrence or non-occurrence of a specific future event, such as
the out-come of legal proceedings or the final settlement of an insurance
claim. If the probability that the liability has been incurred exceeds 50 per
cent a provision is recognized in the balance sheet. If the probability is
lower a contingent liability is shown as an additional disclosure in the
financial statements, unless the probability of an outgoing payment is
remote. An asset is only recognized in the balance sheet if it is highly
probable that the Group will receive the asset. Disclosures regarding
contingent assets are given where an inflow of resources is probable.
Tax
Income tax is the sum of current tax and changes in deferred tax.
Tax is recognized in the income statement, except to the extent that
it relates to items recognized in other comprehensive income or
directly in equity. In this case, the tax is also recognized in other
comprehensive income or directly in equity, respectively. Current
tax is recognized at the amount that is expected to be paid to the tax
authorities based on the taxable income that is reported for the units
included in the consolidated financial statements. The income tax is
determined using tax rates that have been enacted on the balance
sheet date. Uncertain tax positions are taken into account when cal-
culating current tax if it is considered more than 50 per cent probabil-
ity that the position will lead to an additional tax expense.
Deferred tax in the balance sheet has been calculated at the
nominal tax rate based on temporary differences for assets and
liabilities at the balance sheet date.
A provision for deferred tax on retained earnings in foreign subsidi-
aries is recognized to the extent that it is likely that the dividend will
be distributed in a near future.
Deferred tax assets are reviewed continually and recognized in the
balance sheet only to the extent that it is likely that future taxable
profits can be used.
Deferred tax liabilities and deferred tax assets are offset insofar
as this is possible under local tax laws and regulations.
Financial instruments
The Group’s financial assets consists of cash and cash equivalents,
loans and accounts receiv able as well as derivatives. Purchases and
sales of financial assets are recognized at the transaction date, which is
the date when the Group undertakes to buy or sell the asset. Accounts
receivable are recognized when the invoice has been sent. Financial
assets are removed from the balance sheet when the right to receive
cash flows from the instrument has expired or been transferred and the
Group has transferred essentially all risks and benefits associated with
ownership to another party.
The Group’s financial liabilities comprise of borrowings and accounts
payable as well as derivatives. Financial liabilities are recognized in
the balance sheet when the counterparty has performed and a con-
tractual obligation to pay exists. Accounts payable are recognized
when the invoice has been received. Financial liabilities are derecog-
nized from the balance sheet when the contractual obligation has
been fulfilled or in some other way is extinguished.
Financial instruments are initially recognized at fair value plus
transaction costs, which applies to all financial assets and liabilities
that are not measured at fair value through profit and loss. These are
initially recognized at fair value excluding transaction costs.
Financial assets and liabilities are in general not netted even when
there is a legal right of netting the carrying amounts and an intention
to settle them by a net amount or to simultaneously realize the asset
and settle the liability. The legal right must not depend on future
events and must be legally binding for the company and the counter-
party both in case of normal business activities and in the event of
default, insolvency or bankruptcy.
Interest income and interest expense are recognized using the
effective interest method and accounted for under “Financial income”
and “Finance expenses” respectively.
Derivatives
Derivatives are classified either as measured at fair value through
profit and loss or as hedging instrument for which hedge accounting
is applied. Derivatives are measured at fair value at the balance sheet
date and accounted for as assets or liabilities. Gains and losses on
changes in fair value are recognized in profit or loss when the deriva-
tive is not part of a hedge relationship which meets the criteria for
hedge accounting. Purchases and sales of derivatives are recognized
at the transaction date.
Financial assets at amortized cost
The model for the financial assets in this category is to receive contrac-
tual cash flows, which have been assessed to only consist of payments
of principal and interest. Assets in this category comprise of accounts
receivable and other receivable as well as cash and cash equivalents.
They are included in current assets, with the exception of items maturing
later than 12 months from the end of the reporting period, which are clas-
sified as non-current assets.
Accounts receivable are always classified as current assets. The
assets in this category are carried at amortized cost in the balance sheet
applying the effective interest rate method. Accounts receivable are
measured at the amount expected to be paid, that is after deducting
expected credit losses.
The Group applies an impairment model based on forward-looking
expected credit losses (ECL). The ECL allowance applies to all items (from
initial recognition). An analysis of expected credit losses is performed
using a provision matrix adjusted for the market location of the customer
to measure expected credit losses, where historical, current and for-
ward-looking factors are taken into consideration. The ECL allowance is
based on the life-time ECL for all accounts receivables.
>> CONT. NOTE 4
77 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Expected credit losses are calculated as the difference between
the carrying amount of the asset and the present value of estimated
future cash flows, discounted at the financial asset’s original effective
interest rate. For accounts receivables expected credit losses are cal-
culated without discounting. The asset’s carrying amount is written
down and the impairment loss including future changes in expected
credit losses are recognized in the consolidated income statement.
The Group define credit-impaired assets as assets which are past-
due more than 90 days or assets with other observable information
indicating a measurable decrease in estimated future cash flows.
Accounts payable
Accounts payables are obligations to pay for goods or services which
have been acquired from suppliers or service provides in the course of
the company’s operating activities. Accounts payable are classified as
current liabilities and are measured at amortized cost.
Borrowings (loans)
Borrowings are initially recognized at fair value, net of transaction
costs. Subsequently loans are carried at amortized cost and any dif-
ference between the amount received (net of transaction costs) and
the amount repayable is recognized in the income statement over the
term of the loan by applying the effective interest method.
Lease liabilities
Leasing liabilities are based on calculated present value of payments
during expected contract periods. Primarily the discount rate is based
on implicit rate in the agreement. When implicit rate cannot be identi-
fied, the marginal loan interest rate is used instead, which corresponds
to the interest rate the company would be offered if the acquisition
was financed with loans from a financial institution.
Hedge accounting
The Group uses the following criteria for classifying a derivative or
other financial instrument as a hedging instrument: (1) the hedging
instrument is expected to be very effective in offsetting changes in
the fair value of or cash flows for an identifi able item (hedged item),
(2) the hedge efficiency can be reliably measured, (3) satisfactory
documentation is drawn up before the hedging instrument is acquired
showing, in particular, that the hedge relationship is effective, (4) in
case of the use of cash flow hedges, that the future trans action is
deemed to be highly probable, and (5) the hedge relationship is
reviewed on a regular basis.
Gains and losses on the hedging instrument are recognized in the
income statement at the same time as gains and losses from the
hedged item.
Fair value hedging
Changes in the fair values of derivatives designated as hedging instru-
ments are recognized immediately in the income statement. Changes
in the fair value of the hedged item (inventory) relating to the hedged
risk are recognized in the income statement in the same way and are
recognized as an adjustment on the hedged item’s carrying amount.
Hedge accounting is discontinued if: (a) the hedge instrument has
expired, been terminated, exercised or sold or (b) the hedge no longer
meets the aforementioned criteria for hedging. In the case of a discon-
tinued hedge, changes in the fair value of the hedged item are recog-
nized in the balance sheet until the hedged item (inventory) is recog-
nized as cost of materials in the income statement.
Cash flow hedges
The effective portion of changes in the fair value of the hedging instru-
ment is recognized in other comprehensive income and accumulated
in the hedging reserve until the hedged transaction is executed. At
that time the accumulated gains or losses on the hedging instrument
will be reclassified to the income statement. The ineffective portion
of the hedging instrument is recognized immediately in the income
statement. When a hedging instrument has expired, been sold, exer-
cised or terminated, the accumulated gains or losses will remain in the
hedging reserve and will be recognized in the income statement upon
execution of the hedged transaction. If the hedged transaction is no
longer expected to occur, the accumulated gain or loss on the hedging
instrument will be recognized immediately in the income statement.
Operating segments
Following recent years’ successful growth initiatives that have
resulted in a larger production footprint and a more diverse product
portfolio Gränges sees an opportunity to further increase efficiency
and transparency by grouping the different businesses based on pro-
duction technology and end-customer markets. As of the first quarter
of 2021 Gränges established two business areas: Gränges Eurasia and
Gränges Americas. Gränges Eurasia includes three production facili-
ties with direct chill casting and hot rolling technology in Finspång
(Sweden), Konin (Poland), and Shanghai (China), as well as Gränges
Powder Metallurgy’s facility in Saint-Avold (France). The largest end
customer market for Gränges Eur asia is heat exchanger material for
the automotive industry. Gränges Americas uses continuous casting
technology and includes three production facilities in Huntingdon,
Salisbury, and Newport. The largest end-customer markets for
Gränges Americas are heat exchanger material for the HVAC industry
and speciality packaging material. Gränges Americas also serves as a
distributor of heat exchanger material for the automotive industry
from Gränges Eurasia on the North and South American market.
Gränges Eurasia is headed by the CEO and Gränges Americas is
headed by the Regional President for the Americas region.
The grouping of the businesses into two business areas, Gränges
Eurasia and Gränges Americas, is considered to constitute the Group’s
operating segments and is consistent with the internal reporting sub-
mitted to the highest executive decision maker, which consists of the
CEO.
Group functions and other items that cannot be allocated to Gränges
Eurasia or Gränges Americas are reported in Other and eliminations.
The segment reporting presents volume, net sales, adjusted operating
profit, operating profit, capital employed and return on capital
employed for each segment. Financial items and taxes are reported
and followed up for the Group as a whole. No detailed breakdown is
presented for number of employees or items in the balance sheet, in
addition to capital employed. Capital employed does not include any
tax items or accrued interest per business area.
Other principles
Cash flow
The cash flow statement, which has been prepared using the indirect
method, shows cash flows from operating activities, investing activi-
ties and financing activities, and explains changes in “Cash and cash
equivalents” for the reporting period.
Acquisitions
The acquisition method is used to account for the acquisitions of
subsidiaries and operations. All payments to acquire a business are
recorded at fair value at the acquisition date. The excess of the cost
of acquisition over the fair value of the identifiable net assets acquired
is recorded as goodwill.
Non-controlling interests
Non-controlling interests are recognized as a separate item in the
Group’s equity.
Government grants
Government grants are recognized in the financial statements when
it is a reasonable assurance that the grant will be received. The grants
are accounted for either as income or a reduction of expenses, and are
in the later case matched with the expenses which they are intended
to compensate for. Government grants attributable to investments are
accounted for as a reduction of the cost of the asset and reduces the
basis for the depreciation.
Share-based payment
The Group has an investment programme for senior managers and
other key employees where participants have invested an amount cor-
responding to up to 50 per cent of the annual base salary before tax
in shares and call options in Gränges AB (publ). The participants have
received a conditional cash contribution which, after tax deducted
(“net contribution”), amounts to 50 per cent of the investment amount.
If the participant terminates their employment or is terminated within
three years from the date of payment of the contribution, an amount
corresponding to the net contribution shall be repaid to Gränges. Fur-
ther, the participants undertake not to sell the shares or options
within three years, should this happen the participant will be liable for
repayment for an amount corresponding to the net contribution pro
rata number of sold shares or options corresponding to the original
allocation.
>> CONT. NOTE 4
78 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
The cash contribution and attributable social security contributions
are reported as personnel costs in the income statement over the
vesting period of three years.
The call options have been based on market bases and the option
premium has been determined by an independent appraiser according
to a generally accepted valuation model (Black-Scholes). The option
premiums are reported in equity.
No new shares will be issued by Gränges in respect of the shares
that can be acquired by the participants through the exercise of
issued call options. The shares will instead be delivered by Gränges
entering into a share swap agreement with a third party on market
terms, through which the third party in its own name has acquired and
upon exercise transfers shares to the participants. The financial expo-
sure that arose during the issue of the call options has been hedged
through the aforementioned share swap agreement. The share swap
is considered an equity instrument and reported in equity. The swap
is settled in cash.
An adapted synthetic programme for foreign participants who do
not have the opportunity to invest directly in Gränges’ share has been
designed. The synthetic programme is a cash-settled programme and
gives rise to a commitment that is valued at fair value with recalcula-
tion every balance sheet day based on Gränges’ share price and is
reported as personnel costs, with a corresponding liability. The finan-
cial exposure that arises has been hedged by entering into a financial
instrument with a third party where the revaluation at fair value is
reported as part of the operating profit.
>> CONT. NOTE 4
79 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
In preparing Gränges’ consolidated accounts, it is necessary to make
a number of assessments and assumptions which can influence the
carrying amounts of assets and liabilities. Future events and changes
in operating parameters may make it necessary to make other
assessments and assumptions. When preparing the financial state-
Accounting item Note Assessments and assumptions that are of significant importance for carrying amounts
Right-of-use assets and lease liabilities 21 The value of identifiable right-of-use assets and lease liabilities are based on the present value of
future payments during the expected contract periods. The discount rate is set based on assump-
tions in interest rates for loans during the corresponding period and with corresponding collateral.
Pension liability 11 The present value of the pension obligations depends on a number of factors which are determined
on an actuarial basis using a number of assumptions. The assumptions used in determining the net
pension expense (income) include the discount rate.
Taxes 17 The tax rate in China depends on whether Gränges qualifies as a high technology company. This quali-
fication entails an income tax rate of 15 per cent instead of the ordinary rate of 25 per cent. However,
to obtain the classification special requirements established need to be met and approved by local
authorities. Gränges considers it to be more likely than not that the special requirements will be met
for the financial year 2021 and therefore applies a tax rate of 15 per cent for the Chinese operation
for 2021.
Intangible assets 14, 19 Impairment test for goodwill is carried out annually or throughout the year if an event occurs that may
result in the need for impairment. Important assumptions on the basis of impairment testing are fore-
casts of future cash flows, which include assumptions for sales growth and operating margin. The dis-
count rate is set based on assumptions about weighted average cost of capital. Other intangible assets
hare amortized on a straight-line basis over the estimated useful life, and therefore a changed assess-
ment of the useful life entails a change in carrying amount. Impairment test for other intangible assets is
carried out if an event occurs that may result in the need for impairment. During 2021 other intangible
assets of SEK 158 million have been impaired.
Tangible assets 20 Depreciation of tangible assets is recorded over the estimated useful life of components or tested for
impairment in an indication of impairment is identified. Changes in assumptions regarding the recover-
able amount and estimated useful life may lead to significant changes in value. Ongoing expansion
investments regarding the production facilities are essential in their nature. Depreciation begins when
the new facilities are put into use and the balance sheet’s valuation and accounting are dependent on
compliance with timetables and investment calculations.
Inventories 22 Valuation of production costs is done using calculation models based on current prices and cost
levels, where direct and indirect production-related costs are attributed to manufactured products.
For estimation of obsolescence, assumptions and assessments are based on the turnover rate and
how realizable the inventory is.
Purchase price allocation 32 The valuation of identifiable assets and liabilities in connection with the acquisition of subsidiaries
or operations involves that items in the acquired company’s balance sheet as well as items that have
not been recognized in the acquired company’s balance sheet should be valued at fair value. With
exception for metal in the inventory and to some extend buildings and land, quoted market prices are
not available for the assets and liabilities that are to be valued, whereby different valuation tech-
niques have to be used. These valuation methods are based on a number of assumptions. Property,
plant and equipment have been valued based on assessments of the replacement value. The valua-
tion of the customer relationships is based on the Multiple Excess Earnings Method (MEEM).
ments, management makes its best assessments in areas of signifi-
cant importance. Accounting items where changes in assessments
and assumptions would have a significant impact on the consolidated
financial statements during next financial year are:
>> 5 Significant accounting assessments and assumptions
80 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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>> 6 Operating segment information
2021 2020
SEK million
Gränges
Eurasia
Gränges
Americas
Other and
eliminations Total
Gränges
Eurasia
Gränges
Americas
Other and
eliminations Total
Sales volume external, ktonnes 236.6 252.4 – 488.9 131.5 219.1 – 350.6
Sales volume internal, ktonnes 26.9 – –26.9 0 22.5 – –22.5 0
Total sales volume 263.5 252.4 –26.9 488.9 154.0 219.1 –22.5 350.6
Income statement
Net sales, external 8,627 9,502 – 18,130 4,262 6,725 21 11,008
Net sales, internal 1,021 –14 –1,007 0 775 24 –799 0
Total net sales 9,648 9,488 –1,007 18,130 5,037 6,748 –778 11,008
Adjusted operating profit
1)
446 655 –92 1,008 176 503 –30 648
Operating profit
2)
280 691 –138 833 121 498 –35 584
Adjusted operating margin, % 4.6 6.9 n/a 5.6 3.5 7. 5 n/a 5.9
Adjusted operating profit per tonne, kSEK 1.7 2.6 n/a 2 .1 1.1 2.3 n/a 1.8
1) Adjusted for items affecting comparability, see Note 14 for further information.
2) Includes SEK 131 million in write-downs of intangible assets for Gränges Eurasia and SEK 27 million for Other and eliminations.
>> 7 Geographic breakdown of net sales,
non-current assets and average number of employees
Net sales are distributed regionally based on where the customers are located. Non-current assets and the average number of employees are
based on where Gränges is located.
2021
SEK million Sweden Rest of Europe China
Rest of Asia
Pacific USA
Rest of North and
South Americas Total
Net sales 438 4,629 2,191 996 7,968 1,909 18,130
Non-current assets
1)
1,051 2,381 958 0 3,740 – 8,131
Average no. of employees 486 858 503 9 793 – 2,648
2020
SEK million Sweden Rest of Europe China
Rest of Asia
Pacific USA
Rest of North and
South Americas Total
Net sales 228 1,663 1,626 642 5,577 1,271 11,008
Non-current assets
1)
1,156 2,206 854 0 3,359 – 7,576
Average no. of employees 419 145 509 9 710 – 1,792
1) Excluding deferred tax assets, interests in joint ventures, interest-bearing receivables and other non-current receivables.
The ten largest customers accounted for 45 per cent (47) of sales. No customers accounted for more than 10 per cent of total sales in 2021 or 2020.
81 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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>> 8 Revenue from contracts with customers
Gränges mainly sells rolled products for heat exchangers and selected
niche applications in different regions. Gränges’ customers are in the
automotive industry, the HVAC industry and niche markets such as
transformers and food packaging.
The transaction price for Gränges’ products is based on the added
value Gränges offers in terms of material properties and production
complexity (fabrication price), and the price of the rawmaterial, alu-
minium. The fabrication price is to a large extent pre-defined while the
aluminium price is variable and based on metal price clauses
connected to the market price.
Net sales by region
SEK million 2021 2020
Asia Pacific 3,187 2,268
Europe 5,052 1,875
North and South America 9,820 6,848
Total revenue from contracts with customers 18,059 10,991
Other revenue 71 17
Net sales 18,130 11,008
Net sales by business area
SEK million 2021 2020
Gränges Eurasia
Fabrication revenue 3,861 2,642
Raw material and other revenue 5,773 2,395
Revenue from contracts with customers 9,633 5,037
Other revenue 15 –
Total net sales Gränges Eurasia 9,648 5,037
Gränges Americas
Fabrication revenue 3,182 2,855
Raw material and other revenue 6,251 3,893
Revenue from contracts with customers 9,432 6,748
Other revenue 56 –
Total net sales Gränges Americas 9,488 6,748
SEK million 2021 2020
Other and eliminations
Fabrication revenue –588 –512
Raw material and other revenue –419 –282
Revenue from contracts with customers –1,007 –794
Other revenue – 17
Total net sales other and eliminations –1,007 –778
Total fabrication revenue 6,454 4,985
Total raw material and other revenue 11,604 6,006
Total revenue from contracts with customers 18,059 10,991
Total other revenue 71 17
Total net sales 18,130 11,008
Other revenue is limited and primarily refer to insurance compensation
related to a fire in one of the rolling mills in the Newport facility in US
and rental revenue from properties in Finspång, Sweden. Insurance
compensation and rental revenue has not been classified as revenue
from contracts with customers and is recognized in other revenue in
the tables above.
In determining the transaction price for Gränges’ products the
Group considers the effect of variable consideration. The variable con-
sideration (early payment discounts and retrospective volume dis-
counts) is estimated at contract inception and included in the trans-
action price only to the extent that it is highly probable that a
significant reversal of accumulated revenue will not occur when the
uncertainty associated with the variable consideration is subse-
quently resolved. The variable consideration is recognized as accrued
expenses in the balance sheet.
The fabrication price allocated to the remaining (unsatisfied or
partially unsatisfied) performance obligations in contracts with
customers is shown in the table below.
Remaining performance obligations at 31 December
SEK million 2021 2020
Within 1 year 5,238 3,344
After 1 year but within 2 years 3,097 1,399
After 2 years 1,673 412
Total
1)
10,009 5,155
1) Corresponding to sales volume of 684 ktonnes (566).
Since the raw material price is variable, based on metal price clauses,
Gränges only disclosures the amount of fabrication price allocated to
the remaining performance obligations in contracts with customers.
>> 9 Lease income
Future minimum lease payments relating to leases and other leases
as lessor attributable to non-cancellable agreements are distributed
on the balance sheet date over the following maturity dates:
SEK million 2021 2020
Within 1 year 15 15
Within 2–5 years 34 27
After 5 years – 3
Total future lease income 48 45
Lease income amounts to SEK 15 million (17) during 2021 and primarily
refer to rental income from properties in Finspång, Sweden.
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Average number of employees
2021 2020
Average no. of employees Of which, women Average no. of employees Of which, women
Gränges AB
Sweden 37 12 28 10
Subsidiaries
Sweden 449 91 391 78
China 503 58 509 60
US 793 102 710 89
Poland 829 74 134 11
Other countries 37 4 20 2
Group total 2,648 341 1,792 251
Board members and other senior executives
2021 2020
No. at balance sheet date Of which, women No. at balance sheet date Of which, women
Board members 7 3 7 3
CEO, Deputy CEO and
other senior executives 5 1 8 1
Salaries, remuneration, social security contributions and pension costs
2021 2020
SEK million
Salaries and
remuneration
(of which,
variable portion)
1)
Social security
contributions
Pension
cost Total
Salaries and
remuneration
(of which,
variable portion)
1)
Social security
contributions
Pension
cost Total
Gränges AB
Board, CEO, Deputy CEO and
other senior executives –28 (–9) –9 –7 –44 –38 (–19) –13 –6 –57
Other employees –46 –19 –6 –71 –29 –10 –8 –48
Subsidiaries
Other senior executives –25 (–17) –0 –1 –26 –26 (–16) –2 –2 –30
Other employees –1,160 –275 –64 –1,499 –934 –226 –67 –1 228
Group total –1,259 –304 –77 –1,640 –1,027 –252 –83 –1,362
1) Government grants have reduced salaries and benefits by SEK 1 million (23) during 2021.
Salaries and other remuneration to the Board members, CEO,
Deputy CEO and other senior executives
Board members
In 2021, the Board of Directors consisted of a total of nine full members,
of which seven were elected by the Annual General Meeting and two are
employee representatives. All members are independent from the com-
pany and the company’s main owners.
The Chairman and the other six members of the Board, elected by the
Annual General Meeting, receive Directors’ fees in accordance with the
resolutions adopted by the Annual General Meeting.
CEO and other senior executives
The remuneration paid to the CEO, Deputy CEO and other senior execu-
tives consists of a basic salary, variable remuneration, other benefits
and pension. Senior executives refer to the members of Group Manage-
ment.
The basic salary for the CEO is deliberated in the Remuneration Commit-
tee and adopted by the Board of Directors. For all other senior executives
including deputy CEO the salaries are decided by the CEO with the support
of the Chairman of the Board. The variable remuneration is based on results
achieved in relation to defined targets and is made up of two components, a
short-term incentive programme (STI) and a long-term incentive pro-
gramme (LTI). Further, there is an one-time investment programme (IP
2020). Several long-term incentive programmes can run in parallel.
The contract between the company and the CEO stipulates a mutual
12-month period of notice. Additionally, in the case of termination by
the company, severance pay is payable without deduction for an addi-
tional 12 months. The contracts between the company and the Deputy
CEO, and other members of the Group Management stipulates a mutual
six-month period of notice. Additionally, in the case of termination by
the company, severance pay is payable for an additional 12 months,
without deduction for the first six months.
Pension
The retirement age for the CEO is 65 years. The CEO has a direct pension in
form of a company-owned endowment insurance. The premiums to the
endowment insurance amounts to 35 per cent of the basic salary. For
other senior executives, including the Deputy CEO, the retire ment age
is60
–65 years depending on the country of employment and the pensions
are premium-based.
Variable remuneration
Short-term incentive programme (STI)
The remuneration from STI is determined by a number of parameters con-
sisting of financial key ratios for the Group, such as adjusted operating
profit and cash conversion, and individual pre-determined targets.
>> 10 Payroll expenses
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Remuneration under STI 2021 may not exceed 60 per cent of the total
basic salary paid to the CEO, Deputy CEO and to the other members of
Group Management, except for the person holding position as President
Americas, whom may obtain 100 per cent of thetotal basic salary.
Long-term incentive programmes (LTI 2020 LTI 2019 and LTI 2018)
Gränges’ long-term incentive programmes are offered to the company’s
senior executives and certain selected key persons.
The programs are designed to replicate share ownership. An amount
corresponding to corresponding to the outcome from STI for each year and
participant is set aside in a so- called LTI bank. Provided that the partici-
pant is still employed by Gränges, one third of the amount for LTI 2018 is
paid per year during 2020, 2021 and 2022, for LTI 2019 during the years
2021, 2022 and 2023 and for LTI 2020 during the years 2022, 2023 and
2024. The payments are adjusted for the total return of the Gränges share.
The total payment of LTI and STI in any oneyear is limited to 1.5 times an
annual salary, except for the person holding position as President Ameri-
cas, for whom such total payout is limited 2.0 times the annual salary.
The costs for the long-term incentive programmes are provided for
during the performance years and are shown in the table Remuneration
and other benefits.
Investment programme (IP 2020)
The 2020 Annual General Meeting resolved on a one-time investment
programme for senior managers and a number of key employees in
which the participants invested an amount corresponding to up to
50 per cent of the annual base salary before tax in shares and call
options in Gränges AB (publ). The participants have received a condi-
tional cash contribution which, after tax deducted (net contribution),
amounts to 50 per cent of the investment amount. If the participant
terminates their employment or has been terminated within three
years from the date of payment of the contribution, November 2020,
an amount corresponding to the net contribution shall be repaid to
Gränges. Furthermore, the shares or options may not be sold within
three years, the participant will then be liable for repayment for an
amount corresponding to the net contribution pro rata of the sale.
The cash contribution is reported over the vesting period of three years
and the cost is shown in the table Remuneration and other benefits.
The option premium was determined by an independent appraiser
according to a generally accepted valuation model (Black-Scholes)
and amounts to SEK 7.38 per option. Each option gives the right to
acquire 1.13 shares in the company at an exercise price of SEK 77.16.
The number of call options issued as of December 31, 2021 was
1,080,000 (1,080,000)
An adapted synthetic programme for foreign participants who do
not have the opportunity to invest directly in Gränges shares has been
designed. The synthetic programme was effective from 2021. The total
number of synthetic options amounts to 792,000 and synthetic shares
to 92,312 as of December 31, 2021.
Other benefits
Other benefits mainly consist of company cars and medical care benefits.
Remuneration and other benefits in 2021
SEK million
Basic salary/
Directors’ fee STI
3)
LTI IP 2020
4)
Total variable
remuneration
Other
benefits
Pension
cost Total
Board of Directors
Fredrik Arp –0.8 – – – – – – –0.8
Carina Andersson –0.3 – – – – – – –0.3
Mats Backman –0.4 – – – – – – –0.4
Martina Buchhauser –0.3 – – – – – – –0.3
Peter Carlsson –0.3 – – – – – – –0.3
Katarina Lindström –0.4 – – – – – – –0.4
Hans Porat –0.3 – – – – – – –0.3
Ragnhild Wiborg –0 .1 – – – – – – – 0 .1
Senior executives
CEO Jörgen Rosengren
¹
)
–2.5 –1.5 –0.5 – –2.0 –0,1 –0.8 –5.4
CEO Johan Menckel
2)
–3.5 – – –1.4 –1.4 –0,1 –1.2 –6.2
Deputy CEO Oskar Hellström
2)
–4.6 –2.8 –3.4 –0.7 –6.9 –0,3 –2.3 –14.1
Other senior executives (5 individuals)
5)
–14.7 –6.2 –4 .1 –4.7 –15.0 –0,9 –3.0 –33.6
Total –25.3 –10.5 –7. 9 –6.8 –25.2 –1.4 –7. 4 –59.2
1) Jörgen Rosengren assumed his position as President and CEO on 1 October 2021. STI is issued in accordance with guidelines decided by the Annual General Meeting for senior
executives, adjusted pro rata. LTI payment 2022 is paid with 1/3 of the STI amount.
2) Johan Menckel resigned as CEO on 31 July 2021, Oskar Hellström was acting CEO from 1 August to 30 September 2021.
3) The amounts are attributable to 2021 but will be disbursed in 2022.
4) The number of synthetic options granted to other senior executives during 2021 amounts to 290,000, and the number of synthetic shares to 31,490. As payment, SEK 4.4 million
has been made through gross salary deductions.
5) Gränges has decided to simplify its organization, which has led to restructuring costs of SEK 21 million for other senior executives. See Note 14 for further information.
Remuneration and other benefits in 2020
SEK million
Basic salary/
Directors’ fee STI
7)
LTI IP 2020
6)
Total variable
remuneration
Other
benefits
Pension
cost Total
Board of Directors
Fredrik Arp –0.5 – – – – – – –0.5
Carina Andersson –0.3 – – – – – – –0.3
Mats Backman –0.4 – – – – – – –0.4
Peter Carlsson –0.3 – – – – – – –0.3
Katarina Lindström –0.4 – – – – – – –0.4
Hans Porat –0.3 – – – – – – –0.3
Ragnhild Wiborg –0.4 – – – – – – –0.4
Anders G. Carlberg –0.2 – – – – – – –0.2
Senior executives
CEO Johan Menckel –5.9 –3.6 –4.1 –0.2 –7. 9 –0 .1 –1.9 –15.8
Deputy CEO Oskar Hellström –4.4 –2.7 –2.4 – 0 .1 –5.2 –0.4 –2.2 –12.2
Other senior executives (6 individuals) –17.8 –10.5 –10.8 –0.2 –21.5 –0.9 –3.6 –43.8
Total –28.1 –16.8 –17.4 –0.5 –34.7 –1.4 –7. 6 –71.8
6) The CEO has received a cash contribution of SEK 3.0 million, corresponding to a net contribution of SEK 1.5 million. The CEO’s investment in shares amounts to SEK 1.3 million
and in options to SEK 1.7 million, corresponding to 225,000 number of options. The Deputy CEO has received a cash contribution of SEK 2.2 million, corresponding to a net contri-
bution of SEK 1.1 million. The Deputy CEO’s investment in shares amounts to SEK 1.1 million and in options to SEK 1.1 million, corresponding to 150,000 options. Other senior
executives have received cash contributions of SEK 3.7 million, corresponding to net contributions of SEK 1.8 million. Other senior executives’ investment in shares amounts to
SEK 1.5 million in shares, and SEK 2.0 million in options, corresponding to 275,333 options.
7) The amounts are attributable to 2020 but were disbursed in 2021.
>> CONT. NOTE 10
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>> 11 Pensions
Gränges has pension plans in Sweden, Poland and the US. Approxi-
mately 79 per cent
(75) of the employees in Sweden are covered by
defined contribution pension plans, with the remainder covered by
defined benefit plans. All permanent full-time employees in the US
are eligible for the defined contribution plan. Approximately 9 per cent
(12) of permanent full time employees in the US are eligible for the
defined benefit pension plan.
Defined contribution plans
Employees of Gränges in the Swedish and American operations are
mainly covered by pension plans classified as defined contribution
plans. Defined contribution plans are arrangements in which the com-
pany pays annual contributions to its employees’ pension plans and
where future pensions are determined by the amount of contributions
paid and the return on the pension assets. In Sweden employees cov-
ered by a collective bargaining agreement have defined contribution
pension plans, as do salaried employees born after 1979 under
theITP1 supplementary pension plan.
Defined benefit plans
The defined benefit pension plan in Sweden applies for salaried
employees covered by the ITP2 supplementary pension plan, based on
a collective agreement between the Confederation of Swedish Enter-
prise and the trade unions for salaried employees in the private sector.
The pension plan is a net plan under which the pension obligation is
not linked to changes in Swedish social insurance schemes. Under the
applicable collective agreement, all salaried employees born in 1979
or after are covered by a defined contribution plan. This means that
the scope of the defined benefit plan will be reduced over time. The
Group also operates defined benefit pension plans for hourly union
employees in the US under broadly similar regulatory frameworks. All
of the plans are final salary pension plans, which provide benefit to
members in the form of a guaranteed level of pension payable for life.
The level of benefits provided depends on members’ length of service
and their salary in the final years leading up to retirement. In the
Swedish plans, pensions in payment are generally updated in line with
the retail price index, whereas in the US plans, pensions generally do
not receive inflationary increases once in payment. With the exception
of this inflationary risk in Sweden, the plans face broadly similar risks,
including the risk of increased life expectancy and sensitivity to
changes in interest rates.
The Swedish, Polish and US defined benefit plans are accounted for
as a provision in the balance sheet. Swedish plans are unfunded and
US plans are partially funded. To secure unfunded accrued pension
rights of their employees in Sweden, companies need to take out a
Credit Insurance Policy with Försäkringsbolaget PRI Pensionsgaranti.
PRI Pensionsgaranti also administers and calculates the Group’s
unfunded pension obligations. The Group’s pensions in Sweden are
regulated by the Act (1967:531) respecting retirement pensions.
The Gränges Benefits Committee in the US is responsible for the over-
sight and management of the plans’ investments. It has a written
Investment Policy. The aim of the investment decisions made by the
Committee is to achieve optimal returns while taking into account a
reasonable level of risk. Investments are diversified, such that the fail-
ure of any single investment would not have a material impact on the
overall level of assets. An asset liability management assessment is
conducted periodically.
Assumptions for defined benefit plans
The assumptions are defined in consultation with professional actuaries.
Assumptions on future salary adjustments and sales are specific to the
Group. The discount rate is determined by reference to high-quality
corporate bonds traded in a well functioning market, which reflect the
duration of the pension obligation. In Sweden the discount rate is
based on secured mortgage bonds.
Distribution of pension costs
Sweden US Poland Total
SEK million 2021 2020 2021 2020 2021 2020 2021 2020
Defined contribution plans –28 –40 –30 –24 – – –58 –65
Current service costs –10 –11 –3 –3 –1 0 –13 –14
Administrative expenses – – –4 –4 – – –4 –4
Pension costs recognized as operating expenses –38 –51 –37 –31 –1 0 –71 –83
Interest on net pension liabilities recognized as a financial expense –3 –3 –3 –3 0 0 –5 –7
Pensions costs recognized in the income statement –41 –54 –39 –35 –1 –1 –81 –89
Actuarial gains and losses recognized in the statement
of comprehensive income –3 –4 15 –32 –1 –1 12 –36
Return on plan assets greater than discount rate – – 13 37 – – 13 37
Total pension costs –44 –58 –11 –29 –1 –1 –56 –88
Distribution of pension liabilities at 31 December
Sweden US Poland Total
SEK million 2021 2020 2021 2020 2021 2020 2021 2020
Present value of unfunded pension obligations –270 –258 –7 0 –93 –8 –7 –348 –358
Present value of funded and partially funded pension obligations – – –388 –347 – – –388 –347
Funded plan assets – – 388 347 – – 388 347
Total pension liabilities –270 –258 –7 0 –93 –8 –7 –348 –358
Assumptions for defined benefit plans
Sweden US Poland
2021 2020 2021 2020 2021 2020
Discount rate, % 1.9 1.2 2.6–2.8 2.4–2.7 2.0 1.3
Future salary
adjustments , % 3.5 2.8 n/a 4.0 2.8 1.8
Income base amount, % 3.2 2.5 n/a n/a n/a n/a
Inflation, % 2.2 1.5 n/a n/a n/a n/a
Employee turnover, % 5.0 5.0 4.0–20.0 4.0–20.0 1.0–5.0 1.0–5.0
Weighted average
remaining duration, years 20.0 20.0 12.0 12.0 n/a n/a
The assumptions for life expectancy in Sweden are based on DUS14
life expectancy tables.
The mortality assumption in the US is based on the Pri-2012
(Pri-2012) mortality tables, Scale MP-2021 (MP-2020).
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Changes in the present value of pension obligations
Sweden US Poland Total
SEK million 2021 2020 2021 2020 2021 2020 2021 2020
Pension obligations at 1 January –258 –246 –439 –474 –7 – –705 –719
Business combinations – – – – – –6 0 –6
Current service costs –10 –11 –3 –3 –1 0 –13 –14
Interest on pension provision –3 –3 –12 –13 0 0 –15 –16
Actuarial gains and losses recognized in
the statement of comprehensive income:
– due to changes in financial assumptions 5 –7 10 –34 0 0 15 –40
– due to changes in demographic assumptions 0 0 –2 6 0 0 –2 6
– due to experienced-based adjustments –8 3 7 –4 0 –1 –2 –1
Benefits paid during the year 5 5 27 24 0 1 32 30
Translation differences – – –46 58 0 0 –46 58
Pension obligations at 31 December –270 –258 –458 –439 –8 –7 –736 –705
Changes in the present value of plan assets
Sweden US Poland Total
SEK million 2021 2020 2021 2020 2021 2020 2021 2020
Plan assets at 1 January – – 347 356 – – 347 356
Administrative expenses – – –4 –4 – – –4 –4
Interest on plan assets – – 9 10 – – 9 10
Return on plan assets greater than discount rate – – 13 37 – – 13 37
Employer contributions – – 13 15 – – 13 15
Benefits paid during the year – – –27 –24 – – –27 –24
Translation differences – – 36 –44 – – 36 –44
Plan assets at 31 December – – 388 347 – – 388 347
Net pension liabilities –270 –258 –7 0 –93 –8 –7 –348 –358
Distribution of plan assets
Sweden US Poland Total
SEK million 2021 2020 2021 2020 2021 2020 2021 2020
Quoted
Equity instruments – – 221 129 – – 221 129
Interest-bearing securities – – 166 193 – – 166 193
Real estate – – – 18 – – – 18
Total – – 388 340 – – 388 340
Unquoted
Cash – – – 7 – – – 7
Total – – – 7 – – – 7
Total plan assets – – 388 347 – – 388 347
>> CONT. NOTE 11
Sensitivity analysis of the effect on the pension liabilities
(+increase/-decrease in pension liabilities)
SEK million Sweden US Total
Discount rate, %
+0.5 –22 –23 –45
– 0.5 25 25 50
Increased/decreased
life expectancy, years
+1 11 16 26
–1 –10 –16 –26
The sensitivity analysis is based on a change in an individual actuarial
assumption while other assumptions remain unchanged. This method
shows the obligation’s sensitivity to a single assumption. This is a simpli-
fied method, as actuarial assumptions are normally correlated.
Defined benefit pension liabilities terms
SEK million Sweden US Poland Total
Benefits scheduled for
disbursement within
12 months 6 28 0 34
Benefits scheduled for
disbursement within
1–5 years 31 114 2 146
Benefits scheduled for
disbursement after
5 years or more 319 137 5 462
Contributions to plans for post-employment remuneration are
estimated at SEK 11 million for the financial year 2022.
>> 12 Remuneration to auditors
SEK million 2021 2020
EY
Audit engagement –7. 0 –7.7
Audit services in addition
to audit engagement –0.8 –2.5
Tax advisory services –0.2 – 0 .1
Total remuneration to auditors –8.0 –10.3
Audit engagement refers to the examination of the annual report and
accounting records and of the Board of Directors and CEO’s manage-
ment of the company, other tasks incumbent on the company’s audit or
as well as advice and other assistance occasioned by observations
made in the course of such examinations or the performance of such
other tasks. Audit services in addition to audit engagement is mainly
related to review of interim reports.
Tax advisory services include advice on tax, including transfer
pricing issues, as well as value-added tax.
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>> 13 Other operating expenses
SEK million 2021 2020
Energy and utility expenses –654 –403
Freight expenses –460 –315
Consumable material –347 –205
Repair and maintenance expenses –328 –272
Consultant fees –173 –168
Insurance –48 –32
Vehicle operating expenses –35 –33
Travel expenses –16 –13
Other –315 –255
Total other operating expenses –2,376 –1,697
Government grants have reduced other operating expenses by SEK 34
million (21) during 2021.
>> 14 Items aecting comparability
SEK million
Financial
statement line 2021 2020
Write-down of intangible assets
Items affecting
comparability –158 –
Restructuring costs
Items affecting
comparability –42 –14
Insurance compensation
Items affecting
comparability 40 –
Realisation of fair value inventory
step-up on acquired business
Cost of
materials –16 –31
Merger and acquisition costs
Items affecting
comparability – –19
Total items affecting comparability –175 –64
Gränges has decided to simplify its organization by decentralizing the
responsibility for innovation, digitalization and continuous improve-
ment. The decentralization of digitalization has led to that certain
investments in group-wide IT systems are no longer relevant and have
been written down by SEK 138 million. Remaining write-down of SEK 19
million refers to other intangible assets. The simplified organization has
also led to restructuring to a cost of SEK 42 million. None of the items
affect the cash flow.
In May 2021, a fire occurred in one of the rolling mills in the Newport
facility in US. The event is covered by property damage and interrup-
tion insurance with a deductible of SEK 10 million. Insurance compensa-
tion, less deductible, corresponding to the costs for the fire have been
reported as part of adjusted operating profit. Insurance compensation
in addition to cost coverage and deductible, amounting to SEK 40 mil-
lion, is handled as an item affecting comparability. The insurance claim
has not been finally settled yet and additional compensation may be
obtained during 2022.
In 2020 Gränges acquired Aluminium Konin, a Polish flat rolled alu-
minium producer. The costs for the acquisition amounted to SEK 19 mil-
lion and were reported as an item affecting comparability. All of Alumin-
ium Konin’s assets were valued at fair value by Gränges, as was the
inventory. Upon sale of the acquired inventory, the difference between
fair value and book value was realized. The amount was reported in the
financial statement line cost of materials and deemed to be an item
affecting comparability. The item amounted to SEK 16 million for 2021
and the corresponding amount for 2020 was SEK 31 million. For further
information on the acquisition, see Note 32.
Restructuring costs for 2020 refer to organizational changes in
Gränges’ Swedish and US operations.
>> 15 Joint arrangements
Gränges has a joint arrangement with Shanghai Gränges Moriyasu
Aluminium Co Ltd which provides stamping capacity for Gränges’
customers in China. Gränges owns 50 per cent of the company and
the holding is classified as a joint venture and is accounted for using
the equity method.
Investments accounted for in accordance with the equity method
SEK million
Shanghai Gränges
Moriyasu Aluminium
Carrying amount at 1 January 2021 13
Acquisitions/sales –
Share of profit/loss 2
Dividend –
Tax –
Translation differences 2
Carrying amount at 31 December 2021 16
Carrying amount at 1 January 2020 12
Acquisitions/sales –
Share of profit/loss 2
Dividend –
Tax –
Translation differences –1
Carrying amount at 31 December 2020 13
No capital injection is deemed to be required to Shanghai Gränges
Moriyasu Aluminium Co Ltd in 2022.
>> 16 Financial income and costs
SEK million 2021 2020
Interest income 5 10
Net foreign exchange gain 1 –
Total financial income 6 10
Interest expense –67 –88
Net interest expense, pensions –5 –7
Interest expense on lease liabilities –11 –10
Net foreign exchange loss – –3
Other financial expenses –15 –33
Total financial costs –98 –142
Total financial income and costs –92 –132
Financial income during 2021 is mainly related to interest income from
bank deposits in China. Other financial expenses primarily consisted of
cost for financing and bank fees.
87 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
>> 17 Taxes
Tax expense
SEK million 2021 2020
Profit before taxes 743 454
Current tax –74 –58
Deferred tax –74 –33
Total tax –147 –91
Tax as % of profit before taxes 20 20
Reconciliation of the Group’s tax rate
The following table shows a reconciliation of reported tax and tax
calculated on Swedish tax rate of 20.6 per cent (21.4). The main tax
components are shown below.
SEK million 2021 2020
Earnings before tax multiplied by nominal
tax rate in Sweden –153 –97
Effect of foreign operations with tax rates
other than 20.6 % (21.4) 9 11
Non-deductible expenses –13 –4
Non-taxable income 8 11
Tax subsidies abroad 21 7
Other income tax paid abroad –24 –18
Adjustment of tax in respect of prior years 5 –2
Changes in tax legislation 0 1
Total tax –147 –91
Gränges’ Chinese subsidiary has for tax purpose received a pre-
qualification as a High and New-Technology Enterprise for the three-
year period 2019 to 2021. The pre-qualification means that the com-
pany preliminary pays 15 per cent in corporate income tax instead of
the ordinary tax of 25 per cent for the period. In order to finally obtain
the lower tax rate, the company must meet special requirements
established by the authorities in China for each one of the three years.
Gränges currently considers it to be more likely than not that the spe-
cial requirements will be met for the financial year 2021 and therefore
applies a tax rate of 15 per cent for the Chinese operation.If the ordinary
tax rate of 25 percent had been applied for 2021, tax as a percentage of
profit before tax for the Group would not have deviated significantly
from the current 20 percent. A new application for qualification as a
High and New-Technology Enterprise for an additional three-years
period, 2022 to 2024, will be filed during 2022.
Tax subsidies abroad mainly refers to deduction in China where an
enterprise enjoy 200 per cent deduction for eligible research and
development expenses for income tax purpose. This is an increase in
comparision to previous year when the percentage was 175 per cent.
Other income tax paid abroad for 2021 mainly consists of base ero-
sion and anti-abuse tax (BEAT) in the US. Previous years amount mainly
consists of paid income tax in China on dividends from the subsidiary in
Shanghai to Gränges AB.
Deferred tax
Deferred tax consists of the Group’s tax items, which are settled in the
future. The table below specifies deferred tax assets and tax liabilities
relating to temporary differences between the carrying amounts and
tax bases of assets and liabilities.
Deferred tax asset in respect of tax losses have been taken into
account in full since the company is of the opinion that sufficient
income will be generated in the future to be utilized against the tax
losses. The tax losses amount to SEK 699 million (835) per 31 Decem-
ber 2021 and can be carried forward indefinitely. The tax losses car-
ried forward are mainly attributable to direct tax deductions for
investments in the US in 2019.
Deferred tax asset on other non-current items mainly refers to
interest limitation deductions in US.
Deferred tax asset on other current items mainly refers to accrued
expenses in China.
Deferred tax on temporary differences
2021 2020
SEK million
Deferred
tax asset (+)
Deferred
tax liability (–)
Net deferred
tax
Deferred
tax asset (+)
Deferred
tax liability (–)
Net deferred
tax
Intangible assets – –93 –93 – –111 –111
Property, plant and equipment 6 –598 –592 3 –514 –511
Financial instruments 28 –15 12 17 –22 –6
Pension provisions 41 –20 21 43 –12 31
Other non-current items 16 – 16 61 0 61
Total non-current items 90 –726 –636 123 –659 –536
Inventories 15 –1 13 18 – 18
Other current items 96 –3 93 50 0 50
Total current items 111 –5 107 67 0 67
Tax losses 146 – 146 175 – 175
Set-off –293 293 0 –346 346 0
Net deferred tax assets (+) / liabilities (–) 55 –438 –384 20 –314 –294
Uncertain tax positions
Gränges has an uncertain tax position in Poland of SEK 25 million
related to tax relief on investments. The relief was utilised in the
income tax for the years 2019 and 2020. A decision if the incentive
finally will be obtained is expected during 2022.
Change in deferred tax in the income statement
SEK million 2021 2020
Change in deferred tax in balance sheet –89 –198
Business combinations 7 140
Change in deferred tax, hedging reserve in
other comprehensive income –19 8
Change in deferred tax, actuarial gains and
losses on pensions in other comprehensive
income 9 0
Translation effects in other comprehensive
income 19 18
Change in deferred tax in the
income statement –7 4 –33
88 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
Earnings per share are calculated by dividing the profit for the year
by the weighted average number of outstanding shares.
Gränges has issued 1,080,000 options related to an investment
programme (see Note 10 for further information of IP 2020) which has
led to a dilution of 269,967 weighted average number of outstanding
shares in 2021. The corresponding number of shares as a result of
dilution in 2020 was 11,814.
2021 2020
Profit for the year attribute to owners
of the parent company (SEK million) 595 363
Weighted average number of
outstanding shares, basic 106,308,618 86,324,752
Weighted average number
of outstanding shares, diluted 106,578,585 86,336,566
Earnings per share, basic, SEK 5.60 4.21
Earnings per share, diluted, SEK 5.58 4.21
>> 18 Earnings per share
Impairment test of goodwill
Impairment testing for goodwill is made annually or continuously dur-
ing the year if an event that may result in impairment need arises. In
2021, Gränges has redefined cash-generating units (CGUs) from previ-
ously constituting of one unit for the entire Group to the two newly
established business areas Gränges Eurasia and Gränges Americas.
Goodwill for Gränges Eurasia amounts to SEK 511 million and for
Gränges Americas to SEK 355 million as of 31 December 2021.
The forecast period is five years with an average growth rate of
6.7 per cent for Gränges Eurasia and 2.8 per cent for Gränges Americas.
Estimated growth rate beyond the forecast period amounts to 2.0 per
cent for both of the CGUs. Cash flows have been discounted at a pres-
ent value using a discount rate calculated at 8.0 per cent after tax,
corresponding to 8.7 per cent before tax. Sensitivity analyses have
been performed to evaluate whether reasonable changes in discount
rate and the growth rate would indicate need for impairment. No rea-
sonable changes in assumptions or events during the year or after its
expiration indicate need for impairment for either of the two CGUs.
IT
Gränges has decided to simplify its organization, which includes decen-
tralization of digitization. This has led to certain investments in group-
wide IT systems no longer being relevant and they have therefore been
impaired by SEK 138 million.
Customer relationships
The majority of the customer relationships arose in conjunction with
the acquisition in US during 2016 and in Poland 2020. The acquired
businesses had a number of customers that they have had long rela-
tionships with. The customer relationships are recognized at their fair
value at the date of acquisition and are subsequently amortized on a
straight-line basis over their estimated useful lives.
Other
Previous acquired intellectual property rights has been impaired with
SEK 19 million during the year.
The Group is running a large number of development projects
butthe criteria for recognising the projects as intangible assets are
currently not met. Total costs for research and development projects
amount to SEK 72 million (85) for 2021.
SEK million Goodwill IT
Customer
relationships Other Total
Carrying amount at 1 January 2021 814 227 442 27 1,510
Business combinations 24 – 24 3 51
Acquisitions – 0 – 13 13
Impairment – –138 – –19 –158
Amortization – –25 –36 –6 –67
Translation differences 35 6 16 0 56
Carrying amount at 31 December 2021 873 71 445 18 1,407
Cost at 31 December 2021 873 286 532 75 1,767
Accumulated amortization and impairment – –216 –86 –57 –360
Carrying amount at 31 December 2021 873 71 445 18 1,407
Carrying amount at 1 January 2020 404 259 180 30 874
Business combinations 497 1 324 3 826
Acquisitions – 0 – – 0
Amortization – –26 –15 –6 –47
Translation differences –87 –7 –49 0 –142
Carrying amount at 31 December 2020 814 227 442 27 1,510
Cost at 31 December 2020 814 287 487 58 1,647
Accumulated amortization and impairment – –60 –45 –31 –137
Carrying amount at 31 December 2020 814 227 442 27 1,510
>> 19 Intangible assets
89 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
>> 20 Property, plant and equipment
SEK million
Land, land improve-
ments and buildings
Machinery and
equipment
Fixed assets under
construction
Fixtures,
vehicles, etc. Total
Carrying amount at 1 January 2021 1,316 3,505 926 87 5,834
Business combinations – 9 –1 0 8
Acquisitions
1)
2 10 810 2 824
Divestments and disposals 0 0 – 0 0
Transferred assets, fixed assets under construction 185 536 –737 15 0
Impairment –15 –26 – – –41
Depreciation –66 –430 – –23 –519
Translation differences 90 281 22 2 395
Carrying amount at 31 December 2021 1,512 3,883 1,020 84 6,498
Cost at 31 December 2021 2,019 8,413 1,020 362 11,814
Accumulated depreciation and impairment –507 –4,531 – –278 –5,316
Carrying amount at 31 December 2021 1,512 3,883 1,020 84 6,498
Carrying amount at 1 January 2020 1,114 3,215 459 58 4,846
Business combinations 379 622 383 22 1,407
Acquisitions
1)
1 5 548 3 557
Divestments and disposals –27 –8 – –3 –38
Transferred assets, fixed assets under construction 32 379 –441 29 0
Depreciation –61 –376 – –20 –457
Translation differences –122 –333 –23 –1 –480
Carrying amount at 31 December 2020 1,316 3,505 926 87 5,834
Cost at 31 December 2020 1,976 7,595 926 354 10,851
Accumulated depreciation and impairment –660 –4,090 – –267 –5,017
Carrying amount at 31 December 2020 1,316 3,505 926 87 5,834
1) Includes government grants of SEK 7 million (2) for 2021. The grant has reduced the acquisitions.
As a result of a fire in one of the rolling mills in the Newport facility in
the US, assets amounting to SEK 41 million were impaired during the
year. See Note 14 for further information on the fire.
90 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
>> 21 Right-of-use-assets and lease liabilities
SEK million
Land and
buildings
Machinery and
equipment
Fixtures,
vehicles, etc.
Total right-
of-use-assets
Total lease
liabilities
Carrying amount at 1 January 2021 70 133 29 232 237
Business combinations – – – – –
Acquisitions 16 8 6 30 30
Interest expense on lease liabilities – – – – 11
Extension and termination options 0 0 – 0 0
Lease payments – – – – –57
Depreciation –15 –17 –18 –50 –
Remeasurements – 0 0 0 0
Canceled contracts 0 0 0 0 0
Translation differences 1 14 0 15 15
Carrying amount at 31 December 2021 72 137 17 226 236
Cost at 31 December 2021 100 187 49 336
Accumulated depreciation –28 –50 –32 –110
Carrying amount at 31 December 2021 72 137 17 226
Carrying amount at 1 January 2020 46 165 44 255 259
Business combinations 41 1 0 42 42
Acquisitions 6 1 3 10 10
Interest expense on lease liabilities – – – – 10
Extension and termination options 0 0 – 0 0
Lease payments – – – – –57
Depreciation –14 –16 –18 –49 –
Remeasurements – – 1 1 1
Canceled contracts –7 – 0 –7 –7
Translation differences –2 –18 0 –20 –20
Carrying amount at 31 December 2020 70 133 29 232 237
Cost at 31 December 2020 98 164 66 328
Accumulated depreciation –28 –31 –37 –96
Carrying amount at 31 December 2020 70 133 29 232
The expense related to short-term leases and leases of low-value
assets for 2021 amounts to SEK 4 million (5). The expense related
to variable lease payments not included in the lease liabilities is not
significant.
>> 22 Inventories
SEK million 2021 2020
Raw materials 1,039 717
Work in progress 1,583 829
Finished goods and merchandise 1,139 733
Derivatives 53 15
Other 142 127
Provision for obsolescence –22 –23
Total inventories 3,933 2,398
Inventories are measured at the lower of cost and fair value after
deduction of selling costs.
The amount of inventories recognized as an expense is included in cost
of materials and amounted in 2021 to SEK 12,427 million (6,747) including
the change in the provision for obsolescence of SEK
–4 million (–6).
For further information about non-current and current lease
liabilities, see Note 29. For maturity analysis for lease liabilities,
see Note 30.
91 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
>> 23 Overview of financial instruments
2021
SEK million Note
Measurement
level
Financial
instruments at
fair value
through profit
or loss
Derivatives
included in
hedge
accounting
Financial
assets
measured at
amortized cost
Financial
liabilities
measured at
amortized cost Total
Of which
interest-
bearing
Non-current assets
Non-current financial
receivables 29, 34 – – – – 0 –
Non-current derivatives 31 2 – 105 – – 105 –
Total – 105 – – 105 –
Current assets
Accounts receivable 24 – – 2,153 – 2,153 –
Other current receivables – – 195 – 195 –
Current derivatives 24, 29, 31 2 125 9 – – 134 5
Cash and cash equivalents 25 – – 809 – 809 809
Total 125 9 3,157 – 3,291 814
Non-current liabilities
Non-current financial
liabilities 29 – – – 2,414 2,414 2,414
Non-current derivatives 31 2 – 1 – – 1 1
Total – 1 – 2,414 2,414 2,414
Current liabilities
Current financial liabilities 29 – – – 1,646 1,646 1,646
Accounts payable 28 – – – 3,009 3,009 –
Other current liabilities 28 – – – 5 5 –
Current derivatives 28, 29, 31 2 136 66 9 39 249 48
Total 136 66 9 4,700 4,909 1,694
Total financial instruments
(receivables + / liabilities –) –11 47 3,148 –7,1 14 –3,929 –3,296
Measurement of financial instruments
The Group uses the following hierarchy to determine the fair values
of financial instruments:
Level 1: Quoted, unadjusted prices in active markets for identical
instruments.
Level 2: Inputs other than quoted prices included in Level 1 that are
directly or indirectly observable for the instrument.
Level 3: Non-observable inputs that have significant impact on the
fair value of the instrument.
Currency forwards
Fair value of currency forward contracts is calculated by discounting
the difference between the contracted forward rate and the forward
rate that can be contracted on the balance sheet date for the remaining
contract period.
Aluminium futures
Aluminium futures are measured at observable quoted prices on LME
(London Metal Exchange) and SHFE (Shanghai Futures Exchange) for
similar assets and liabilities.
Interest-bearing receivables and liabilities
The fair value of interest-bearing assets and liabilities is provided for
disclosure purposes and is estimated by discounting the future cash
flows of principal and interest at the current market rate. In the fair
value measurement of borrowings the credit spread has remained
constant unless there is clear evidence that a change in the Group’s
creditworthiness has resulted in an observable change in the credit
spread. The fair value of borrowings amounted in 2021 toSEK 4,117
million (4,547).
Other receivables and liabilities
For other receivables and liabilities, which are short-term, the carrying
amount is considered to reflect the fair value.
No transfers from one level to another in the valuation hierarchy
were made in 2021 and 2020.
92 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
2020
SEK million Note
Measurement
level
Financial
instruments at
fair value
through profit
or loss
Derivatives
included in
hedge
accounting
Financial
assets
measured at
amortized cost
Financial
liabilities
measured at
amortized cost Total
Of which
interest-
bearing
Non-current assets
Non-current financial
receivables 29, 34 – – – – 0 –
Non-current derivatives 31 2 – 6 – – 6 –
Total – 6 – – 6 –
Current assets
Accounts receivable 24 – – 1,510 – 1,510 –
Other current receivables – – 200 – 200 –
Current derivatives 24, 29, 31 2 91 52 107 – 249 128
Cash and cash equivalents 25 – – 1,473 – 1,473 1,473
Total 91 52 3,290 – 3,433 1,473
Non-current liabilities
Non-current financial
liabilities 29 – – – 2,351 2,351 2,351
Non-current derivatives 31 2 – – – – – –
Total – – – 2,351 2,351 2,351
Current liabilities
Current financial liabilities 29 – – – 2,159 2,159 2,159
Accounts payable 28 – – – 1,687 1,687 –
Other current liabilities 28 – – – 6 6 –
Current derivatives 28, 29, 31 2 82 31 – 25 138 25
Total 82 31 – 3,877 3,990 2,184
Total financial instruments
(receivables + / liabilities –) 9 27 3,290 –6,228 –2,902 –3,062
>> CONT. NOTE 23
93 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
>> 24 Current receivables
SEK million 2021 2020
Accounts receivable 2,153 1,510
Derivatives 129 122
Other current receivables 263 285
Total financial receivables 2,545 1,917
Advances to suppliers/accrued income 79 79
Tax receivables 72 25
Total current receivables 2,696 2,021
Change in provisions for expected credit losses
SEK million 2021 2020
Provisions for expected credit losses at 1 January
–29 –21
Business combinations – –17
Expected credit losses recognized in income
statement –13 1
Used during the year 8 6
Translation differences –2 2
Provisions for expected credit losses
at 31 December –36 –29
Accounts receivables maturity structure
SEK million 2021 2020
Not yet due 1,840 1,304
Overdue 1–30 days 234 165
Overdue 31–60 days 47 26
Overdue 61–90 days 17 11
Overdue more than 90 days 51 34
Provisions for expected credit losses
at 31 December –36 –29
Accounts receivable, carrying amount
at 31 December 2,153 1,510
The maturity structure of overdue receivables has been relatively
stable over time and reflects the fact that Gränges operates in certain
regions and markets where payments from customers are generally
somewhat slow. Overdue accounts receivable are allocated across the
whole customer base.
Credit losses have historically been relatively small and stable. Five
customers accounted for 33 per cent of total outstanding accounts
receiv able at 31 December 2021 (five customers accounted for 24 per
cent of the total outstanding accounts in 2020).
A more detailed description of the customer base is given in Note 8.
>> 25 Cash and cash equivalents
SEK million 2021 2020
Cash and bank balances 809 1,473
Total cash and cash equivalents 809 1,473
>> 26 Share capital
2021 2020
Opening numbers of shares
106,308,618
75,517,386
Issue in kind – 2,442,268
Rights issue – 28,348,964
Closing numbers of shares
106,308,618
106,308,618
SEK million 2021 2020
Share capital, opening balance 142 101
Issue in kind – 3
Rights issue – 38
Share capital, closing balance 142 142
SEK million 2021 2020
Share premium, opening balance 1,885 49
Issue in kind – 212
Rights issue – 1,624
Share premium, closing balance 1,885 1,885
The articles of association for Gränges AB state that the share cap-
ital shall be not less than SEK 100,000,000 and not more than SEK
400,000,000. The number of shares shall be not less than 75,000,000
and not more than 300,000,000.
The share capital comprises a single class of share and amounts to
SEK 142 million as of 31 December 2021. Share capital is divided into
106,308,618 shares, each with a quota value of SEK 1.339775. For
earnings per share and dilutive effect, see Note 18.
>> 27 Provisions
Employee benefits
SEK million 2021 2020
Carrying amount at 1 January 54 51
Provisions made during the year 76 32
Provisions used during the year –41 –27
Unutilized provisions reversed during the year –5 0
Reclassifications 3 –1
Translation differences 2 –2
Carrying amount at 31 December 89 54
of which non-current 61 20
of which current 29 34
A provision for employee benefits is recognized in accordance with
agreements entered for long-term incentive programmes and other
personnel obligations.
>> 28 Other current liabilities
SEK million 2021 2020
Accounts payable 3,009 1,687
Derivatives 201 113
Non-interest-bearing liabilities 5 6
Total non-interest-bearing financial
liabilities 3,215 1,806
Employee-related liabilities 290 273
Accrued expenses 244 214
Employee withholding tax tax 18 27
Other current liabilities 36 69
Total other current liabilities 3,803 2,389
94 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Financing
At 31 December 2021, Gränges’ long-term interest-bearing debt con-
sisted of term loans of USD 125 million (125), SEK 200 million (400) and
bonds of SEK 900 million (300) issued under the Group’s MTN pro-
gramme (Medium Term Note). Gränges had a long-term revolving credit
facility of SEK 2,000 million. At 31 December 2021, the facility was unu-
tilized and the remaining average time to maturity was two years.
Short-term term loans amounted to SEK 226 million (734) and other
short-term debt to SEK 71 million (100) at 31 December 2021. Gränges’
commercial paper programme was utilized with SEK 1,200 million (840).
Gränges had short-term revolving credit facilities corresponding to SEK
502 million. At 31 December 2021 USD 0 million (50) and PLN 47 (62) mil-
lion was utilized. The duration of the interest -bearing debt portfolio was
two months at 31 December 2021.
Carrying amount
SEK million 2021 2020
Non-current interest-bearing liabilities
Interest-bearing loans 1,323 1,451
Bonds in MTN programme 900 300
Revolving Credit Facilities – 410
Interest-bearing derivatives – –
Lease liabilities 191 190
Total non-current interest-bearing liabilities 2,414 2,351
Current interest-bearing liabilities
Interest-bearing loans 297 834
Bonds in MTN programme – 300
Revolving Credit Facilities 105 139
Commercial papers 1,200 840
Interest-bearing derivatives 48 25
Lease liabilities 44 47
Total current interest-bearing liabilities 1,694 2,184
Total interest-bearing liabilities 4,109 4,535
Interest-bearing receivables
Non-current interest-bearing receivables – –
Current interest-bearing derivatives 5 128
Cash and cash equivalents 809 1,473
Total interest-bearing receivables 814 1,601
Net interest-bearing liabilities 3,295 2,934
The loan facilities are subject to covenants, which are Net Debt/EBITDA
and Interest coverage ratio. The covenants were fulfilled at 31 Decem-
ber 2021.
Gränges issued its first senior unsecured Sustainability-Linked
Bond in September 2021 with a nominal amount of SEK 600 million
and a tenor of five years. The Sustainability-Linked Bond is tied to
three Sustainability Performance Targets (SPTs). Gränges ability to
fulfill the SPTs will affect the repayment amount of the bond at the
maturity date. A step-up of 0.40 per cent per SPT will be applicable on
the redemption price, which equals to a maximum of 101.2 per cent of
the nominal value in total, should the targets not be fulfilled.
Under the current loan agreements Gränges AB has entered into
customary undertakings not to pledge assets or in a similar manner
use its property to give creditors a priority over the banks providing
the long-term credit facility.
>> 30 Financial risk>> 29 Financial
and interest-bearing liabilities
Financial risk management
Gränges operates globally and is exposed to various financial risks -
such as market risk related to currency rates, commodity prices and
interest rates, but also to liquidity risk and credit risk. Gränges uses
derivatives and other financial instruments to mitigate these risks in
accordance with the Group’s Financial
Management Policy.
Gränges manages financial risks in a non- speculative manner and
all transactions in financial derivates are executed in order to limit
financial risks within the Group.
Currency risk
Transaction exposure
Gränges is exposed to currency risk as sales and purchases are partly
made in different currencies. Movements in the exchange rates may
cause fluctuations in the value of financial instruments, such as debt
instruments, accounts receivables and accounts payables, and the
value of expected and contracted cash flows. In 2021, sales volume to
countries outside Sweden accounted for 98 per cent (99) of Gränges’
total sales volume while net sales in foreign currencies totalled
SEK 17,693 million (10,780). The largest currencies were USD,
CNY and EUR.
The sales price for Gränges’ products is divided into a metal price
component for the raw material and a conversion price component
covering Gränges’ processing costs and margin. The cost of the alu-
minium is passed on to the customer through metal price clauses. Both
purchase and sales price for the metal component are generally
based on the same price index and in the same currency, for example
the London Metal Exchange (LME) or Shanghai Futures Exchange
(SHFE). Therefore, no material currency exposure arises from the metal
price component. The largest portion of Gränges’ cost base for pro-
cessing is in USD, CNY, PLN and SEK while the conversion price is set
primarily in USD, CNY and EUR. The conversion price is generally con-
tracted for a longer period of time, and it may result in currency risk
exposure.
The Group’s sensitivity to exchange rate fluctuations before cur-
rency hedges, i.e. excluding the impact of currency derivatives, is
shown in the table on the next page.
95 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Currency contracts linked to hedging of future income and expenses
EUR/SEK USD/SEK USD/CNY EUR/PLN USD/PLN
Maturity
31 Dec 2021
Sold vol-
umes, EUR
million net Price
Sold vol-
umes, USD
million net Price
Sold vol-
umes, USD
million net Price
Sold vol-
umes, EUR
million net Price
Sold vol-
umes, USD
million net Price
FY 2022 60 10.29 26 8.60 49 6.56 95 4.61 –4 3.98
FY 2023 20 10.26 – – 3 6.58 6 4.56 – –
Total 80 10.28 26 8.60 52 6.56 101 4.61 –4 3.98
31 Dec 2020
FY 2021 and FY 2022 68 10.49 28 8.95 44 6.90 98 4.52 0 3.56
Metal related currency contracts linked to hedging of future income and expenses
EUR/SEK USD/SEK USD/CNY EUR/PLN USD/PLN
Maturity
31 Dec 2021
Sold vol-
umes, EUR
million net Price
Sold vol-
umes, USD
million net Price
Sold vol-
umes, USD
million net Price
Sold vol-
umes, EUR
million net Price
Sold vol-
umes, USD
million net Price
Q1–2 2022 –4 10.28 2 9.95 10 6.55 79 4.64 –23 4.09
31 Dec 2020
Q1–2 2021 –1 9.33 7 9.41 6 6.90 44 4.51 –5 3.66
1) Besides the currency pairs above, currency pairs where the net hedged position is less than SEK 20 million have been excluded.
2021 Change, % Effect on operating profit, SEK million
USD/CNY +/–10% +/–52
USD/SEK +/–10% +/–24
EUR/SEK +/–10% +/–57
EUR/PLN +/–10% +/–90
USD/PLN +/–10% –/+8
The objective for Gränges’ currency hedging activities is to minimize
the effect of rapid changes in currency rates in the short and medium
term by hedging a part of the Group’s foreign currency exposure. Expo-
sures relating to customer orders without firm commitments are
hedged up to 24 months in advance. In 2021, 50–70 per cent of the
forecasted currency exposure of the coming 12 months was hedged.
The Group’s total outstanding currency hedges at the balance sheet
date are shown in the tables below.
Gränges applies hedge accounting for most hedges, either cash
flow hedges or fair value hedges of firm commitments. The various
types of hedging are described in Note 31.
Translation exposure
As SEK is the presentation currency for the Group, Gränges is exposed
to currency risk upon translation of net investments in foreign opera-
tions. This refers mainly to CNY, USD and PLN, and the total trans-
lation exposure was SEK 3,503 million (2,381) at 31 December 2021.
Gränges does not hedge this exposure.
Commodity price risk
The price of aluminium is Gränges most significant commodity price risk.
Aluminium is traded on the LME and SHFE and the prices set on these
exchanges are used as basis for Gränges metal purchases and sales.
Commodity price exposure arises as there is a time lag between purchase
of raw materials and sales of finished goods. Price changes that may
occur may affect Gränges operating profit negatively.
>> CONT. NOTE 30
Gränges primarily reduces the exposure by matching price terms
from suppliers with price terms offered to its customers. Furthermore,
Gränges is also using financial derivatives, such as forwards and
futures contracts with LME and SHFE as underlying price index, to
reduce the metal price exposure.
As per 31 December 2021, Gränges had sold a net volume of
58,200 tonnes (30,200) based on LME and 11,225 tonnes (12,745)
based on SHFE.
Interest rate risk
Gränges’ interest rate risk is primarily related to the Group’s interest-
bearing liabilities and assets. The majority of Gränges’ interest-bear-
ing liabilities have variable interest rates. The average duration of the
loan portfolio at 31 December 2021 was two months (one). The dura-
tion of the loan portfolio may be prolonged either by changing interest
rate terms in loan agreements or by using financial instruments, such
as interest rate swaps. The duration of the interest-bearing debt was
not prolonged with financial instruments during 2021.
Credit risk
Credit risks related to accounts receivable and other current assets is
managed as part of the commercial risk and is monitored continuously
by the operating units. Gränges’ customers are spread over various
countries and geographic markets. Credit losses have historically been
low due to the relatively strong financial position of Gränges’ custom-
ers as well as strict credit pro cedures. Credit insurances are used
occassionally, however not in a large extent.
Gränges’ credit risks related to financial instruments are managed
by choosing counterparties with a good credit rating and bylimiting
the risk per counterparty. Gränges also enters into ISDA agreements
with financial counterparties, which entails a right to offset assets
and liabilities in relation to the same counterparty in the case of a
credit event.
Liquidity risk
Liquidity risk is the risk that Gränges will be unable to fulfil its pay ment
obligations. Gränges’ Financial
Management Policy stipulates metrics to
ensure adequate liquidity in the Group. Cash flow from operating activi-
ties is managed centrally and Gränges monitors both short and long-
term liquidity in the Group.
The table on the next page shows the maturity structure for the
Group’s contractual financial liabilities. The amounts refer to non-
discounted future cash flows and may therefore differ from the rec-
ognized figures. All variable interest cash flows have been calculated
at the rate prevailing on the balance sheet date and all future cash
flows in foreign currency are translated to SEK using the closing rate
at year-end. The table also includes derivatives which are recognized
as assets at the balance sheet date, as derivatives can include both
positive and negative cash flows, and the fair value var ies over time.
96 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
>> CONT. NOTE 30
2021
SEK million Carrying amount
Contractual
cash flows <1 year 1–2 years 2–4 years >4 years
Lease liabilities 236 329 46 38 54 191
Other interest-bearing liabilities 3,874 3,935 1,641 557 1,132 605
Accounts payable 3,009 3,009 3,009 – – –
Other current liabilities 5 5 5 – – –
Net-settled derivatives
1)
– aluminium derivatives –54 – – – – –
Inflow – 93 93 – – –
Outflow – –147 –147 – – –
Gross-settled derivatives
1)
– currency derivatives –43 – – – – –
Inflow – -64 -64 0 – –
Outflow – 21 21 0 – –
Total 7,027 7,181 4,604 595 1,186 796
2020
SEK million Carrying amount
Contractual
cash flows <1 year 1–2 years 2–4 years >4 years
Lease liabilities 237 331 49 38 55 189
Other interest-bearing liabilities 4,299 4,393 2,565 269 1,357 203
Accounts payable 1,687 1,687 1,687 – – –
Other current liabilities 6 6 6 – – –
Net-settled derivatives
1)
– aluminium derivatives –35 – – – – –
Inflow – 24 24 – – –
Outflow – –59 –59 – – –
Gross-settled derivatives
1)
– currency derivatives 74 – – – – –
Inflow – 125 121 4 – –
Outflow – –51 –51 0 – –
Total 6,268 6,456 4,341 312 1,412 392
1) Including derivatives recognized as assets.
SEK million
Accounting before tax effects on
Income statement Other comprehensive income
2021 2020 2021 2020
Interest rate risk: +/–100 bp parallel shift in yield curves,
all currencies –/+30 –/+28 – –
Currency risk: +/–10 % change in FX rate, USD/SEK –/+13 –/+5 –/+22 –/+21
Currency risk: +/–10 % change in FX rate, EUR/SEK –/+20 –/+6 –/+48 –/+53
Currency risk: +/–10 % change in FX rate, CNY/USD – – –/+22 –/+25
Currency risk: +/–10 % change in FX rate, USD/PLN +/–17 +/–6 +/–8 –/+1
Currency risk: +/–10 % change in FX rate, EUR/PLN –/+15 –/+13 –/+173 –/+134
Price risk: +/–20 % change in LME prices –/+285 –/+120 –/+13 –/+0
Financial liabilities are managed using operating cash flow, liquid
and interest- bearing assets and available credit facilities.
Sensitivity analysis
Gränges financial instruments are exposed to different type of market
risks which can affect the income statement or equity. Financial
instruments, especially derivatives, are used as a means of hedging
financial and operational exposures.
The table shows a partial analysis of the sensitivity of financial
instruments, where the isolated effect on the income statement and
other comprehensive income is calculated. This is done on the basis of
a chosen hypothetical change in market prices or prices in the balance
sheet at 31 December. In accordance with IFRS, the analysis only cov-
ers financial instruments and is not intended to provide a full overview
of the Group’s market risk, for example:
• For currency hedges of concluded contracts changes in the fair
value of the hedging instrument will affect the income statement
while changes in the fair value of the underlying hedged contract
that is offset by the hedging instrument will not be shown, as this
is not a financial instrument.
• If one of the parameters changes the analysis will not take into
account any correlations with other parameters.
• Financial instruments in the functional currency of individual units
do not create a currency risk and are therefore not included in this
analysis. For the same reason the currency exposure is not included
upon translation of such financial instruments into the presentation
currency.
Generally, the effect on the income statement and other comprehen-
sive income of financial instruments shown in the table is expected to
offset the effects of the hedged items in cases where the financial
instruments are included in a hedging relation ship.
Accounting effects of changes in market risk are recognized in the
income statement and other comprehensive income depending on
classification according to hedge accounting. Effects which are
accounted for in the income statement also affect other comprehen-
sive income in addition to the figures presented in the table.
97 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Fair value hedging
Gränges is using aluminium forwards and futures to hedge the inven-
tory. Currency exposure related to the inventory is hedged with cur-
rency forwards. Metal and currency derivatives are jointly designated
as a hedging instrument in the fair value hedge. Gain and loss on
hedged items, as well as the hedging instrument, are recognized as
cur rency gain and loss in the income statement. The value of inventory
is adjusted with the change in fair value of the hedged item. Loss on
the hedging instruments amounted to SEK –15 million in 2021 (–18)
and gain on the hedged items attributable to the hedged risk
amounted to SEK
15 million in 2021 (18).
Interest rate swaps
Gränges uses basis swaps to convert external financing from Stibor/
SEK exposure to Libor/USD exposure. The purpose is to allow for a
flexible financing, while maintaining an efficient hedging of the under-
laying risk exposure. The total nominal value of the basis swaps corre-
sponded to USD 20 million (110) at 31 December 2021.
Share swap
Gränges has, in accordance with the resolution at the Annual General
Meeting 2020, entered into a share swap agreement in order to be able to
deliver shares to the participants in the incentive programme, IP 2020.
The number of shares in the share swap amounted to 2,192,000, corre-
sponding to approximately 2.1 per cent of the number of shares in Gränges
AB per 31 December 2021. The share swap is considered an equity instru-
ment reported in equity.
Offsetting
Financial assets and liabilities subject to an enforceable master
netting arrangement or similar agreement relate to the Group’s deriv-
atives. Gränges has entered into ISDA-agreements with relevant
financial counterparties.
SEK
million
Gross
amounts Offset
Net
amounts
in balance
sheet
Derivatives
not intended
to be settled
net
Collaterals
received/
pledged
Net
amounts
2021
Derivative
assets 146 – 146 125 – 21
Derivative
liabilities –254 – –254 –125 – –129
2020
Derivative
assets 159 – 159 67 – 93
Derivative
liabilities –148 – –148 –67 – –82
>> 31 Derivatives and hedging
The table below shows the fair value of all outstanding derivatives grouped by their treatment in the financial statements.
Derivatives and hedging
2021 2020
SEK million Assets (+) Liabilities (
–) Assets (+) Liabilities (–)
Cash flow hedges
Share derivatives 105 – – –
Currency forwards, currency swaps 7 –36 49 –28
Aluminium futures 3 –32 9 0
Total 115 –68 58 –29
Fair value hedges
Currency forwards, currency swaps 3 –15 25 –5
Aluminium futures 89 –115 15 –58
Total 92 –130 39 –62
Other derivatives – changes in fair value
recognized in income statement
Currency forwards, currency swaps 32 –44 51 –46
Interest rate swaps 0 –9 107 –
Aluminium futures 1 0 0 0
Total 33 –53 158 –47
Total derivatives 239 –251 255 –138
Cash flow hedges
Gränges’ purchases of aluminium forwards and futures with LME and
SHFE as price base and currency forwards are identified as hedging
instruments in the category cash flow hedges. All derivatives that are
classified as hedging instruments in cash flow hedges are accounted
for at fair value in the balance sheet. Changes in fair value are recog-
nized in other comprehensive income and accumulated in the hedging
reserve in equity and are reclassified to the income statement when
the hedged cash flows are recognized in the income statement.
No gain or loss has been recognized in the income statement as a
result of ineffective hedging in 2021 and 2020. All expected cash flows
that were hedged in 2021 still qualify for hedge accounting.
Change in hedging reserve
SEK million 2021 2020
Opening hedging reserve before tax 74 2
Reclassified to income statement –21 1
Change in value during the year –85 71
Closing hedging reserve before tax –32 74
Deferred tax, hedging reserve 10 –8
Closing hedging reserve after tax –21 65
A positive hedging reserve will result in a positive recognition in the income
statement in the future. Accumulated hedging gains and losses from cash
flow hedges which were recognized in the hedging reserve as at 31 Decem-
ber
2021 and are expected to be recognized in the income statement
(before tax) are SEK
–57 million for 2022 and SEK 104 million after 2022.
98 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
>> 32
Acquisition
Aluminium Konin
On 6 November 2020 Gränges acquired Aluminium Konin, a Polish flat
rolled aluminium producer. The preliminary purchase price allocation
presented at 31 December 2020 was updated during 2021 with SEK 15
million (PLN 6 million) due to increased purchse price. The Goodwill
has increased with SEK 4 million and net identifiable assets and liabil-
ities with SEK 11 million.
No further adjustments are expected, and the purchase price allo-
cation is determined as below.
Purchase price allocation Aluminium Konin PLN million SEK million
Intangible assets 138 335
Property, plant and equipment 624 1,514
Other non-current receivables 15 35
Inventories 242 586
Other current receivables 159 388
Cash and cash equivalents 24 57
Interest-bearing liabilities 507 1,231
Provision and other liabilities 290 704
Net identifiable assets and liabilities 406 981
Goodwill 204 495
Issue in kind 90 215
Cash consideration 521 1,261
Purchase price 611 1,476
Cash consideration –521 –1,261
Cash and Cash equivalents in acquired operation 24 57
Effect on the Group’s cash and cash equivalents –497 –1,204
Getek
In 2020 it was announced that Gränges would acquire the remaining
49 per cent of the shares in Getek GmbH as well as the business
DISPAL
®
. Getek was until 1 October 2020 jointly owned by Gränges
(51 per cent) and Erbslöh (49 per cent) and classified as a joint operation.
Gränges has recognized its direct right to jointly owned assets, liabilities,
revenues and expenses in the financial statements since 2017. The acqui-
sition of the remaining 49 per cent shares in Getek was done 1 October
2020 and the operation has been consolidated in full since then. The
DISPAL
®
business was acquired 1 January 2021 and is included from
2021. The preliminary acquisition balance presented at 31 December
2020 was updated during 2021 due to updated fair value valuations of
the net assets and adjustment of the purchase price.
No further adjustments are expected, and the purchase price
allocation is determined as below.
Purchase price allocation Getek EUR million SEK million
Non-current assets 6.5 66
Current assets, excluding cash 2.7 27
Cash 0 .1 1
Non-current liabilities 1.0 10
Current liabilities 1.0 11
Net identifiable assets and liabilities 7. 2 73
Goodwill 5.3 52
Initial investment in joint operation 4.6 44
Cash consideration 8.0 80
Purchase price 12.6 124
99 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
>> 33 Pledged assets, guarantees
and contingent liabilities
Pledged assets
SEK million 2021 2020
Pledged financial assets in form of receivables – 97
Other pledged assets – 374
Total pledged assets – 471
Own liabilities covered by pledged assets – 626
For the loan agreements described in Note 29, Gränges AB has entered
into a customary undertaking to not pledge assets or in a similar man
-
ner use its property to give creditors a better right than the banks that
are providing the credit facilities. Pledged assets in 2020 referred to
assets in the then recently acquired Aluminium Konin, see Note 32
for further information on the acquisition. These pledges were dis-
continued during the first half of 2021.
Contingent liabilities
SEK million 2021 2020
Guarantee for supply of electricity 15 13
Other guarantees 7 9
Total contingent liabilities 22 22
Disputes
From time to time disputes with counterparties arise in the ongoing oper-
ations. The Group regularly makes assessments and provisions if neces-
sary in the accounts. Currently, the Group is not involved in any major liti-
gation that is expected to substantially affect the accounts negatively.
Environmental issues
The Group has conducted industrial production for a long time at facil-
ities in Finspång, Västerås and Upplands Väsby. In light of the public
review of potentially polluted areas in Sweden that is being conducted
by the Swedish Environmental Protection Agency and country admin-
istrative boards, Gränges may be involved in reviews and investigations
relating to facilities where industrial production has historically taken
place. For instance, industrial production has been conducted by vari-
ous operators at Gränges’ facility in Finspång since the 16th century.
Gränges, together with a third party, has entered into a commitment
to carry out sampling linked to the previously conducted operations in
Upplands Väsby. At present, however, there is no obligation for Gränges
regarding remediation or restoration of land or watercourses and no
provision or contingent liability has been reported.
>> 34 Related party transactions
Intra Group transactions are executed in accordance with specific
arrangements at arm’s length and shared costs in Gränges are allo-
cated among the companies in the Group using allocation formulas
depending on the types of expenditure.
Transactions with Moriyasu Aluminium Co Ltd. are specified in the
table below.
SEK million 2021 2020
Transactions with joint ventures
Sales 12 7
Accounts receivable 3 2
For information on remuneration and benefits to board members and
senior executives, see Note 10.
There are no other significant trans actions with related parties.
>> 35 Events aer the balance sheet date
On March 1, 2022, Fredrik Spens took over as President Europe.
He succeeded Jörgen Rosengren, who held the position on an interim
basis. From the same date, Fredrik Spens is part of Gränges’ Group
Management.
No other significant events have occurred after the balance sheet
date.
100 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Alternative performance measures
Gränges makes use of the alternative performance measures return on capital employed, net debt, equity
to assets ratio and cash conversion. Gränges believes that these performance measures are useful for
readers of the financial reports as a complement to other performance measures when assessing the
possibility of dividends, the implementation of strategic investments, and the Group’s ability to meet
financial commitments. Further, Gränges uses the alternative performance measures adjusted operating
profit, adjusted operating profit per tonne and adjusted EBITDA, which are measures that Gränges con-
siders to be relevant for investors who want to understand the profit generation excluding items affecting
comparability. For definitions of the measures, see page 102.
SEK million 2021 2020
Adjusted operating profit
Operating profit 833 584
Items affecting comparability 175 64
Adjusted operating profit 1,008 648
Adjusted operating profit per tonne
Adjusted operating profit 1,008 648
Sales volume, ktonnes 488.9 350.6
Adjusted operating profit per tonne, kSEK 2.1 1.8
Adjusted EBITDA
Adjusted operating profit 1,008 648
Depreciation and amortization 678 553
Adjusted EBITDA 1,686 1,201
Return on capital employed
Total assets less cash and cash equivalents and
interest-bearing receivables, rolling 12 months average 13,717 10,119
Non-interest bearing liabilities, rolling 12 months average –3,948 –2,468
Pensions, rolling 12 months average 348 377
Capital employed (rolling 12 months average) 10,117 8,028
Adjusted operating profit 1,008 648
Return on capital employed, % 10.0 8.1
Net debt
Cash and cash equivalents and interest–bearing receivables –814 –1,601
Interest-bearing liabilities 4,109 4,535
Pensions 348 358
Net debt 3,643 3,292
SEK million 2021 2020
Net debt/Adjusted EBITDA
Net debt 3,643 3,292
Adjusted EBITDA 1,686 1,201
Adjusted EBITDA for the acquired business in Poland for the period prior to
the acquisition – 276
Net debt/Adjusted EBITDA 2.2 2.2
Equity to assets
Equity 6,932 5,970
Total assets 15,767 13,652
Equity to assets, % 44.0 43.7
Adjusted cash flow before financing activities
Cash flow before financing activities 62 –322
Cash flow from expansion investments 456 306
Cash flow from acquisitions and other capital transactions 90 1,196
Adjusted cash flow before financing activities 607 1,180
Cash conversion
Adjusted cash flow before financing activities 607 1,180
Adjusted operating profit 1,008 648
Cash conversion, % 60 182
101 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Definitions
Adjusted EBITDA
Adjusted operating profit before depreciation
and impairment charges.
Adjusted cash flow before financing activities
Cash flow before financing activities excluding
cash flow from non-maintenance investments
and acquisitions.
Adjusted operating profit
Operating profit excluding items affecting
comparability.
Adjusted operating profit per tonne
Adjusted operating profit divided by sales
volume.
Average number of employees
The average number of employees converted to
full-time positions.
Capital employed
Total assets less cash and cash equivalents and
interest-bearing receivables, minus non-interest
bearing liabilities.
Cash conversion
Adjusted cash flow before financing activities divided
by adjusted operating profit.
Cash flow before financing activities
Cash flow from operating activities plus cash
flow from investing activities.
Earnings per share
Profit for the period divided by the total number
of shares.
Equity to Assets
Equity divided by total assets.
Items affecting comparability
Non-recurring income and expenses.
ktonnes
Volume expressed in thousands of metric tonnes.
Net debt
Cash and cash equivalents and interest- bearing
receivables minus interest- bearing liabilities,
including pensions.
Operating profit
Profit before net financial items and tax.
Return on capital employed
Adjusted operating profit divided by average
capital employed during the past 12 months
period.
Return on equity
Profit for the period divided by average equity
during the past 12 months period.
Sales volume
Volumes sold in metric tonnes.
102 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Five-year summary
SEK million 2021 2020 2019 2018 2017
Sales volume, ktonnes 488.9 350.6 347.3 375.0 373.0
Income statement
Net sales 18,130 11,008 11,978 12,910 11,435
Adjusted EBITDA
1)
1,686 1,201 1,327 1,357 1,303
Adjusted operating profit
1)
1,008 648 866 1,005 933
Operating profit 833 584 836 940 917
Profit for the year 595 363 600 688 652
Adjusted EBITDA margin 9.3 10.9 11.1 10.5 11.4
Adjusted operating margin 5.6 5.9 7. 2 7. 8 8.2
Operating margin 4.6 5.3 7. 0 7. 3 8.0
Net margin 3.3 3.3 5.0 5.3 5.7
Balance sheet
Non-current assets 8,323 7,633 6,025 4,489 3,827
Current assets 7,444 6,020 4,455 4,285 4,179
Equity 6,932 5,970 4,314 3,873 3,322
Non-current liabilities 3,297 3,068 3,414 2,522 2,555
Current liabilities 5,539 4,614 2,752 2,378 2,128
Cash flow
Operating activities 988 1,414 1,441 1,351 968
Investing activities –926 –1,736 –1,590 –819 –396
Cash flow before financing activities 62 –322 –148 531 572
Financing activities –793 1,149 440 –825 –650
Cash flow for the year –732 827 292 –294 –79
1) Adjusted for items affecting comparability (see Note 14 in the notes to the consolidated accounts).
Capital structure, return indicators and
employees
Capital employed 10,574 9,262 7,779 6,367 5,615
Net debt 3,643 3,292 3,465 2,494 2,292
Equity/assets ratio, % 44.0 43.7 41.2 44.2 41.5
Net debt/Adjusted EBITDA, multiple 2.2x 2.2x 2.6x 1.8x 1.8x
Capital employed (rolling 12 months average) 10,117 8,028 7,411 6,098 5,581
Return on capital employed, % 10.0 8.1 11.7 16.5 16.7
Equity (rolling 12 months average) 6,521 4,752 4,175 3,633 3,093
Return on equity, % 9.1 7. 6 14.4 18.9 2 1.1
Average number of employees 2,648 1,792 1,805 1,699 1,568
2021 2020 2019 2018 2017
Data per share, SEK
1)
Earnings per share, basic 5.60 4.21 7.0 5 8.08 7.67
Earnings per share, diluted 5.58 4.21 7.0 5 8.08 7.66
Equity 65.04 69.13 50.65 45.47 39.01
Cash flow from operating activities 9.27 16.38 16.92 15.86 11.37
Dividend 2.25
2)
1.10 – 2.84 2.66
Dividend yield, % 2.12 1.1 0 – 3.98 3.56
Share price at year-end 106.10 100.20 87.73 71.37 74.70
Weighted outstanding ordinary shares,
basic in thousands 106,308.6 86,324.8 85,177.3 85,177.3 85,011.8
Weighted outstanding ordinary shares,
diluted in thousands 106,578.6 86,336.6 85,177.3 85,177.3 85,090.9
Sales volume by region, ktonnes
Asia Pacific 81.6 69.4 79.0 86.2 86.3
Europe 143.6 58.3 58.3 65.4 65.6
North and South Americas 263.7 222.9 210.1 223.3 221.1
Total 488.9 350.6 347.3 375.0 373.0
Sales volume by end-customer, ktonnes
Automotive 193.7 146.1 – – –
HVAC 106.9 86.2 – – –
Speciality packaging 85.6 64.4 – – –
Other niches 102.7 53.9 – – –
Total 488.9 350.6 – – –
Net sales by region, SEK million
Asia Pacific 3,187 2,268 2,736 3,004 2,911
Europe 5,067 1,892 2,091 2,424 2,230
North and South Americas 9,876 6,848 7,150 7,482 6,294
Total 18,130 11,008 11,978 12,910 11,435
1) Calculated on weighted outstanding ordinary shares, diluted.
2) Cash dividend for 2022 as proposed.
103 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Parent company income statement
SEK million Note 2021 2020
Net sales 3 142 169
Payroll expenses 7 –115 –104
Other operating expenses 4, 5, 6 –111 –145
Depreciation, amortization and impairment charges 10, 11 –34 –21
Operating loss –119 –101
Dividends from subsidiaries – 194
Financial income 8 84 63
Financial costs 8 –43 –77
Financial items 41 181
Profit after financial items –78 80
Change in tax allocation reserve – 12
Change in accelerated depreciation – 18
Appropriations – 30
Profit before taxes –78 110
Tax on profit for the year 9 15 12
Profit for the year –63 122
Parent company statement of comprehensive income
SEK million Note 2021 2020
Profit for the year –63 122
Items to be reclassified to profit/loss for the year
Change in hedge reserve before tax – 1
Tax on above – –
Comprehensive income for the year attributable to the owners of the
parent company –63 123
The parent company has no items not to be reclassified to profit/loss for the year.
104 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Parent company balance sheet
SEK million Note 2021 2020
ASSETS
Non-current assets
Intangible assets 10 – 33
Property, plant and equipment 11 2 170
Shares in Group companies 12 2,906 2,891
Deferred tax assets 9 47 27
Receivables from Group companies 2,659 1,579
Other non-current receivables 105 5
Total non-current assets 5,718 4,706
Current receivables
Accounts receivable – 2
Receivables from Group companies 649 870
Other receivables 118 226
Prepaid expenses and accrued income 11 19
Total current receivables 778 1,117
Cash and cash equivalents
Cash and bank balances 446 736
Total cash and cash equivalents 446 736
Total current assets 1,224 1,853
TOTAL ASSETS 6,942 6,559
SEK million Note 2021 2020
EQUITY AND LIABILITIES
Restricted equity
Share capital 13 142 142
Statutory reserve – 8
Total restricted equity 142 151
Non-restricted equity
Share premium reserve – 1,835
Retained earnings 3,342 1,405
Profit for the year –63 122
Total non-restricted equity 3,280 3,362
Total equity 3,422 3,513
Provisions
Provisions for pensions 14 28 26
Other provisions 15 6 7
Total provisions 34 32
Non-current liabilities
Interest-bearing liabilities 16 1,095 698
Total non-current liabilities 1,095 698
Current liabilities
Other provisions 15 9 12
Liabilities to Group companies 696 262
Interest-bearing liabilities 16 1,474 1,865
Accounts payable 7 54
Other liabilities 130 73
Accrued expenses and deferred income 17 75 50
Total current liabilities 2,391 2,316
TOTAL EQUITY AND LIABILITIES 6,942 6,559
105 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Parent company statement of changes in equity
Restricted equity Unrestricted equity
SEK million Share capital Statutory reserve
Fair value
reserve
Share
premium reserve
Retained
earnings
Profit for
the year
Total
equity
Opening balance at 1 January 2021 142 8 – 1,835 1,405 122 3,513
Appropriation of retained earnings:
Carried forward – – – –1,835 1,957 122 –
Dividend – – – – –117 – –117
Comprehensive income for the year – – – – – –63 –63
Change in fund for development expenditure – –8 – – 8 – –
Share swap – – – – 88 – 88
Closing balance at 31 December 2021 142 – – – 3,342 –63 3,422
Opening balance at 1 January 2020 101 9 –1 – 1,254 335 1,699
Appropriation of retained earnings:
Carried forward – – – – 335 –335 –
Dividend – – – – – – –
Comprehensive income for the year – – – – – 122 122
Change in fund for development
expenditure – –1 – – 1 – –
Change in fund for fail value – – 1 – – – 1
Share swap – – – – –193 – –193
Option premium – – – – 8 – 8
Issue in kind 3 – – 211 – – 215
Rights issue 38 – – 1,624 – – 1,662
Closing balance at 31 December 2020 142 8 – 1,835 1,405 122 3,513
106 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Parent company cash flow statement
SEK million Not 2021 2020
Operating loss –119 –101
Depreciation, amortization and impairment charges 34 21
Change in net working capital etc. –55 13
Taxes paid –8 –10
Cash flow from operating activities –148 –7 7
Acquisitions 12 –26 –1,163
Investments in Group companies 12 – –343
Investments in property, plant and equipment and intangible assets 10, 11 – –
Divestments of property, plant and equipment and intangible assets 10, 11 165 8
Cash flow from investing activities –140 –1,498
Dividend paid to shareholders –117 –
Dividend received from subsidiary – 185
Share swap – –193
Option premium – 8
Rights issue – 1,662
Interest paid –41 –7 1
Interest received 75 69
New loans 6,061 5,260
Repayment of loans –6,026 –4,620
Financial intra-group transactions –234 –178
Cash flow from financing activities –282 2,121
Cash flow for the year –290 546
Cash and cash equivalents at 1 January 736 190
Cash flow for the year –290 546
Cash and cash equivalents at 31 December 446 736
Reconciliation between opening and closing balance of liabilities whose cash flows are recognized
infinancing activities
SEK million 2021 2020
Interest-bearing liabilities at 1 January 2,563 1,966
Cash flow 35 640
Non-cash items
Translation differences –30 –43
Change in accrual borrowing costs 2 –
Interest-bearing liabilities at 31 December 2,569 2,563
107 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Notes to the parent company financial statements
>> 2 Financial risk management
Gränges’ financial risks are monitored centrally in the Group, see
notes to the consolidated financial statements, Note 30 Financial risk.
The parent company uses derivatives and other financial instru-
ments to mitigate the risk exposure in the subsidiaries. There is gener-
ally no net exposure in the parent company as external positions are
offset with intercompany contracts. Hedge accounting is not applica-
ble for these contracts in the parent company.
Foreign exchange and interest rate risk related to financing is
managed with foreign exchange and interest rate derivatives. The
underlying exposure arises as the majority of the parent company’s
external financing is in SEK and the majority of the intercompany loans
are in foreign currency. The interest-bearing liabilities of the parent
company is further described in Note 16 Interest-bearing liabilities.
>> 3 Breakdown of net sales
by area of operation
SEK million 2021 2020
Intra-group service charges 142 152
Rental income – 17
Total breakdown of net sales
by area of operation 142 169
>> 1 Accounting principles
The Parent Company financial statements have been prepared in
accordance to the Annual Accounts Act and RFR 2 Reporting for Legal
Entities. Application of RFR 2 entails that the Parent Company is to
apply all IFRS and interpretations approved by the EU as far as possi-
ble within the framework of the Swedish Annual Accounts Act, the
Pension Obligation Vesting Act and in regard to the connection
between accounting and taxation. Changes in RFR 2 has not had
material impact on the financial reports of the parent company.
An account of the Gränges Group’s accounting policies are described
in Note 4 Accounting standards in the consolidated financial state-
ments. The main deviations between the accounting policies applied
by the Gränges Group and the parent company are described below.
Gränges Group applies IAS 19 Employee Benefits in the consoli-
dated financial statements. The Parent Company applies the princi-
ples of the Pension Obligations Vesting Act. Consequently there are
differences between the Gränges Group and the Parent Company in
the accounting of defined benefit pension plans.
The Parent Company recognizes the difference between depreci-
ation according to plan and tax depreciation as accumulated additional
depreciation, included in untaxed reserves.
Group contributions received from subsidiaries are recognized as
appropriations.
Capitalized development expenditure is allocated to a fund for
development expenditure. The fund is restricted equity and dissolve
at the same rate as amortization or impairment of the capitalized
development.
The parent company applies RFR 2 IFRS 16 item 1 and recognizes
leases in the income statement on a straight-line basis over the lease
term.
>> 4 Items aecting comparability
SEK million 2021 2020
Restructuring costs –42 –
Write-down of intangible assets –27 –
Merger and acquisition costs – –19
Total items affecting comparability –69 –19
Gränges has decided to simplify its organization by decentralizing the
responsibility for innovation, digitalization and continuous improve-
ment. The decentralization of digitalization has led to that certain
investments in group-wide IT systems are no longer relevant and have
been written down by SEK 7 million. Remaining write-down of SEK 19
million refers to other intangible assets. The simplified organization
has also led to restructuring to a cost of SEK 42 million.
In 2020 Gränges acquired Aluminium Konin, a Polish flat rolled
aluminium producer. The costs for the acquisition amounted to SEK
19 million.
>> 5 Operating lease payments
Distribution of lease payments
Future minimum lease payments relating to leases and other leases in
the capacity of lessees attributable to non-cancellable agreements
are distributed on the balance sheet date over the following maturity
dates:
SEK million 2021 2020
Within one year –4 –5
Later than one year but within five years –6 –15
Total future minimum lease payments –10 –19
Leasing costs amount to SEK 6 million (6) during 2021.
108 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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>> 6 Remuneration to auditors
SEK million 2021 2020
Ernst & Young AB
Audit engagement –2 .1 –2.0
Audit services in addition to audit engagement –0.2 –1.9
Tax advisory services –0 .1 – 0 .1
Total remuneration to auditors –2.4 –4.0
Audit engagement refers to the review of the annual report and account-
ing records and of the Board of Directors and CEO’s manage ment of the
company, other tasks incumbent on the company’s auditor as well as
advice and other assistance occasioned by observations made in the
course of such examinations or the performance of such other tasks.
Audit services in addition to audit engagement is primarily of review
of interim reports.
Tax advisory services include advice on tax, including transfer pric-
ing issues, as well as value-added tax.
>> 7 Payroll expenses
Salaries and remuneration totalled SEK –73.9 million (–66.6), and
social charges were SEK
–41.2 million (–37.7), whereof SEK –12.5 million
(
–14.3) refers to pension costs. Pension costs of SEK –1.6 million (–1.9)
refer to the CEO. The company’s outstanding pension obligations for
the CEO are SEK 9.3 million (7.5).
Read more about the average number of employees, salaries and
remuneration, including incentives, in Note 10 to the consolidated
financial statements.
>> 8 Financial income and costs
SEK million 2021 2020
Interest income from Group companies 83 63
External interest income 1 1
Net foreign exchange gain 0 –
Total financial income
84 63
External interest expense –31 –42
Interest expense, pensions –1 –1
Net exchange loss – –5
Other financial expenses –11 –29
Total financial costs –43 –7 7
Total financial income and costs 41 –13
>> 9 Taxes
Tax expense for the year
SEK million 2021 2020
Profit before taxes –78 110
Current tax –4 –15
Deferred tax 19 27
Total tax 15 12
Tax as % of profit before taxes –19.7 11.0
Reconciliation of effective tax
SEK million 2021 % 2020 %
Profit before taxes –78 – 110 –
Tax at applicable tax
rate 16 –20.6 –24 –21.4
Non-deductible
expenses –1 1.0 – –0.4
Non-taxable income 5 –6.2 51 46.3
Adjustment of tax in
respect of prior
years –1 1.0 – –0.2
Foreign taxes –4 5 .1 –15 –13.3
Total tax 15 –19.7 12 11.0
Deferred tax
SEK million 2021 2020
Tax loss carry forwards 42 25
Pension obligations 4 2
Other items 1 –
Total deferred tax asset (+) / liability (–) 47 27
Deferred tax asset in respect of tax losses have been taken into
account in full since the company is of the opinion that sufficient
income will be generated in the future to be utilized against the tax
losses. The tax losses amount to SEK 204 million (127) per 31 Decem-
ber 2021 and can be carried forward indefinitely.
>> 10 Intangible assets
SEK million
Intellectual
property IT
Total intan-
gible assets
Carrying amount at 1 January 2021 24 8 33
Amortization –5 –1 –6
Impairment –19 –7 –27
Carrying amount at 31 December 2021 – – –
Cost at 31 December 2021 35 11 46
Accumulated amortization and
impairment charges –35 –11 –46
Carrying amount at 31 December 2021 – – –
Gränges has decided to decentralize the responsibility for digitization
which has led to investments in Group-wide IT systems no longer being
relevant and has therefore been written down by SEK 7 million. The
remaining write-down of SEK 19 million relates to other intangible
assets.
SEK million
Intellectual
property IT
Total intangi-
ble assets
Carrying amount at 1 January 2020 30 9 40
Amortization –6 –1 –7
Carrying amount at 31 December 2020 24 8 33
Cost at 31 December 2020 35 11 46
Accumulated amortization and
impairment charges –10 –3 –13
Carrying amount at 31 December 2020 24 8 33
109 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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>> 11 Property, plant and equipment
SEK million
Land, land improve-
ments and buildings
Machinery and
equipment
Fixtures,
vehicles, etc.
Assets under
construction
Total property, plant
and equipment
Carrying amount at 1 January 2021 162 4 5 – 192
Acquisitions – – – – –
Sales –162 – –5 – –167
Depreciations and impairment charges – –2 – – –2
Carrying amount at 31 December 2021 – 2 – – 2
Cost at 31 December 2021 – 120 – – 120
Accumulated depreciation and impairment charges – –118 – – –118
Carrying amount at 31 December 2021 – 2 – – 2
Carrying amount at 1 January 2020 180 5 7 – 192
Acquisitions – – – – –
Sales –8 – – – –8
Depreciations and impairment charges –11 –1 –3 – –14
Carrying amount at 31 December 2020 162 4 5 – 170
Cost at 31 December 2020 416 120 24 – 560
Accumulated depreciation and impairment charges –255 –116 –19 – –390
Carrying amount at 31 December 2020 162 4 5 – 170
>> 12 Shares in Group companies
SEK million Reg. no Registered office
Share of capital
and votes, %
Carrying amount,
opening balance Investments
Carrying amount,
closing balance
Gränges Finspång AB 556002-6113 Finspång, Sweden 100/100 186 – 186
Gränges Skultuna AB 556913-7358 Skultuna, Sweden 100/100 – – –
Gränges Americas Inc. – Delaware, USA 100/100 671 – 671
Granges Aluminium (Shanghai) Co., Ltd.
– Shanghai, China 100/100 256 – 256
Gränges International Inc. – Delaware, USA 100/100 68 – 68
Gränges Japan Ltd – Tokyo, Japan 100/100 2 – 2
Gränges Powder Metallurgy GmbH – Velbert, Germany 100/100 38 – 38
Gränges Konin S.A. – Warsaw, Poland 100/100 1,670 15 1,685
Total shares in Group companies 2,891 15 2,906
>> 13 Share capital
2021 2020
Numbers of shares 106,308,618 106,308,618
SEK million 2021 2020
Share capital 142 142
The articles of association for Gränges AB state that the share cap-
ital shall be not less than SEK 100,000,000 and not more than SEK
400,000,000. The number of shares shall be not less than 75,000,000
and not more than 300,000,000.
The share capital comprises a single class of share and amounts to
SEK 142 million (142) as of 31 December 2021. Share capital is divided
into 106,308,618 shares (106,308,618), each with a quota value of SEK
1.339775.
Earnings per share and dilutive effect is presented in the Group’s
Note 18.
>> 14 Provision for pensions and
similar obligations
SEK million 2021 2020
Liability at beginning of year related
to ITP 2 26 24
Pension costs 2 2
Interest expense, pensions 1 1
Pension payments –1 –1
Liability at the end of year related to ITP 2 28 26
Liability at the end of year related
to pension obligations 28 26
Actuarial bases for calculating the capital value pursuant to the
Pension Obligations Vesting Act are defined by the Swedish Financial
Regulatory Authority. Application of the Pension Obligations Vesting
Act is a condition for the right to make tax deductions.
Real estates have been sold to the subsidiary Gränges Finspång AB during the year. The purchase price amounted to MSEK 165.
110 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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>> 15 Other provisions
SEK million 2021 2020
Non-current provisions
Provisions for long-term incentive programme
(LTI) 4 6
Other provisions 2 –
Total non-current provisions 6 7
Current provisions
Provisions for long-term incentive programme
(LTI) 9 12
Total current provisions 9 12
A provision for employee benefits is recognized in accordance with
agreements entered for long-term incentive programmes and other
personnel obligations.
>> 17 Accrued expenses and
deferred income
SEK million 2021 2020
Accrued salaries, holiday pay
and social-security contributions 28 34
Other accrued expenses and deferred income 47 17
Total accrued expenses and deferred income 75 50
>> 16 Interest-bearing liabilities
The parent company’s interest-bearing debt as per 31 December, 2021
consisted of term loans amounting to SEK 200 million and USD 25 mil-
lion, whereof SEK 200 million was long-term and USD 25 million was
short-term. The interest-bearing debt also included corporate bonds
of SEK 900 million, whereof SEK 900 million was long term. Gränges’
commercial paper programme was utilized with SEK 1,200 million.
Gränges also has a revolving credit facility of SEK 2,000 million, which
was unutilized at 31 December 2021.
The loan facilities are subject to covenants, which are Net Debt/
EBITDA and Interest coverage ratio. The covenants were fulfilled at
31 December 2021.
Carrying amount
SEK million 2021 2020
Non-current interest-bearing liabilities
Interest-bearing loans 200 398
Bonds in MTN programme 900 300
Revolving Credit Facilities – –
Accrued loan costs –5 –
Total non-current interest-bearing liabilities 1,095 698
Current interest-bearing liabilities
Interest-bearing loans 226 700
Bonds in MTN programme – 300
Revolving Credit Facilities – –
Commercial papers 1,199 840
Interest-bearing derivatives 49 25
Total current interest-bearing liabilities 1,474 1,865
Total interest-bearing liabilities 2,569 2,563
111 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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No board member or senior executive of Gränges AB or its subsid i aries
has independently or through a company or related party had any direct
involvement in a business transaction concluded by Gränges AB that was
or is of an unusual character or subject to unusual terms and conditions.
SEK million 2021 2020
Sales to related parties 141 152
Purchases from related parties – 62
Interest income on receivables from related parties 82 61
Interest expenses on liabilities to related parties – –
Interest-bearing receivables from related parties 3,089 1,608
Non-interest-bearing receivables from
related parties 200 774
Non-interest-bearing liabilities to related parties 696 35
>> 19 Related party transactions
>> 20 Proposed appropriation
of retained earnings
The Board of Directors proposes that the retained earnings of:
SEK
Profits carried forward 3,245,174,301
Change in fund for development expenditure 8,489,480
Change in share swap 88,161,914
Profit for the year –62,678,670
Non-restricted equity 3,279,147,026
Be appropriated as follows:
Dividend to shareholders of 2.25 SEK per share 239,194,391
Carried forward 3,039,952,635
Total 3,279,147,026
The proposed dividend of SEK 239 million, or SEK 2.25 per share,
represents 40 per cent of the Group’s profit for 2021. In preparing its
dividend proposal the Board of Directors has taken account of the
company’s financial position, cash flow and outlook.
>> 18 Pledged assets and
contingent liabilities
Contingent liabilities
SEK million 2021 2020
Guarantee for supply of electricity 15 13
Guarantee commitment PRI Pensionsgaranti 1 –
Contingent liabilities for subsidiaries 307 269
Total contingent liabilities 322 283
Pledged assets
Gränges AB has, in connection with signing the new credit facility
described in Note 16, entered into a customary undertaking to not
pledge assets or in a similar manner use its property to give creditors
a better right than the banks that are providing the credit facility.
Disputes
The company is not a party to any dispute. As long as the company
does not have any legal or formal obligation as a result of a past event,
and it is uncertain whether an outflow of economic resources will be
required to settle a future obligation, nothing is recognized in the
income statement or balance sheet.
112 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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113 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
The Board of Directors proposes that the retained earnings of:
SEK
Profits carried forward 3,245,174,301
Change in fund for development expenditure 8,489,480
Change in share swap 88,161,914
Profit for the year –62,678,670
Non-restricted equity 3,279,147,026
Be appropriated as follows:
Dividend to shareholders of 2.25 SEK per share 239,194,391
Carried forward 3,039,952,635
Total 3,279,147,026
The proposed dividend of SEK 239 million, or SEK 2.25 per share,
represents 40 per cent of the Group’s profit for 2021. In preparing
its dividend proposal the Board of Directors has taken account of
the company’s financial position, cash flow and outlook.
The undersigned certify that the consolidated accounts and the
annual report have been prepared in accordance with the Interna-
tional Financial Reporting Standards (“IFRS”), as adopted for use in
the EU, and generally accepted accounting principles respectively,
and give a true and fair view of the financial positions and results of
the Group and the Company and describes substantial risks and
uncertainties that the Group companies faces.
Proposed appropriation of retained earnings
Stockholm, 16 March 2022
The Board of Directors of Gränges AB (publ)
Fredrik Arp
Chairman of the Board
Jörgen Rosengren
Chief Executive Officer
Carina Andersson
Member of the Board
Mats Backman
Member of the Board
Martina Buchhauser
Member of the Board
Peter Carlsson
Member of the Board
Katarina Lindström
Member of the Board
Hans Porat
Member of the Board
Öystein Larsen
Employee representative
Konny Svensson
Employee representative
We submitted our audit report on 16 March 2022
Ernst & Young AB
Andreas Troberg
Authorized Public Accountant
This information is such that Gränges must disclose pursuant to the Swedish Securities Market Act and/or the Swedish
Financial Instruments Trading Act. The information was submitted for publication on Thursday, 17 March 2022.
114 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Auditor’s report
To the general meeting of the shareholders of Gränges AB,
corporate identity number 556001-6122
Report on the annual accounts and consolidated accounts
Opinions
We have audited the annual accounts and consolidated accounts of
Gränges AB (publ) except for the corporate governance statement on
pages 58-70 for the year 2021. The annual accounts and consolidated
accounts of the company are included on pages 53-113 in this docu-
ment.
In our opinion, the annual accounts have been prepared in accord-
ance with the Annual Accounts Act and present fairly, in all material
respects, the financial position of the parent company as of 31 Decem-
ber 2021 and its financial performance and cash flow for the year then
ended in accordance with the Annual Accounts Act. The consolidated
accounts have been prepared in accordance with the Annual Accounts
Act and present fairly, in all material respects, the financial position of
the group as of 31 December 2021 and their financial performance and
cash flow for the year then ended in accordance with International
Financial Reporting Standards (IFRS), as adopted by the EU, and the
Annual Accounts Act. Our opinions do not cover the corporate govern-
ance statement on pages 58-70. The statutory administration report is
consistent with the other parts of the annual accounts and consoli-
dated accounts.
We therefore recommend that the general meeting of shareholders
adopts the income statement and balance sheet for the parent com-
pany and the group.
Our opinions in this report on the annual accounts and consolidated
accounts are consistent with the content of the additional report that
has been submitted to the parent company’s audit committee in
accordance with the Audit Regulation (537/2014) Article 11.
Basis for Opinions
We conducted our audit in accordance with International Standards on
Auditing (ISA) and generally accepted auditing standards in Sweden.
Our responsibilities under those standards are further described in the
Auditor’s Responsibilities section. We are independent of the parent
company and the group in accordance with professional ethics for
accountants in Sweden and have otherwise fulfilled our ethical respon-
sibilities in accordance with these requirements. This includes that,
based on the best of our knowledge and belief, no prohibited services
referred to in the Audit Regulation (537/2014) Article 5.1 have been pro
-
vided to the audited company or, where applicable, its parent company
or its controlled companies within the EU.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinions.
Key Audit Matters
Key audit matters of the audit are those matters that, in our profes-
sional judgment, were of most significance in our audit of the annual
accounts and consolidated accounts of the current period. These
matters were addressed in the context of our audit of, and in forming
our opinion thereon, the annual accounts and consolidated accounts
as a whole, but we do not provide a separate opinion on these matters.
For each matter below, our description of how our audit addressed the
matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s
responsibilities for the audit of the financial statements section of our
report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our
assessment of the risks of material misstatement of the financial
statements. The results of our audit procedures, including the proce-
dures performed to address the matters below, provide the basis for
our audit opinion on the accompanying financial statements.
Valuation of finished goods and work-in-process products
Description How our audit addressed this key audit matter
As described in Note 22 of the consolidated financial statements, invento-
ries of finished goods and merchandise and work in progress products are
recorded at 2 722 MSEK in the consolidated balance sheet per the 31st of
December 2021, equivalent to 17 % of the Company’s total assets. Invento-
ries are valued at the lowest of acquisition cost and net realizable value.
The acquisition cost of inventories is based on the cost of production
less obsolescence write-downs, if applicable. The valuation at production
cost is performed using inventory valuation models where direct and indi-
rect production-related costs are allocated to products. Incorrect assump-
tions and calculations related to direct and indirect production costs affect
the valuation of goods produced which affects recorded inventory and the
cost of goods sold. For this reason we have determined that this is a key
audit matter.
A description of the Company’s inventory valuation method for finished
goods and merchandise and work in progress products, as well as signifi-
cant judgments and assumptions in relation to this, is presented in Note 4
and Note 5 under the notes to the consolidated financial statements.
In our audit for the financial year, we have assessed the Company’s routines
for accounting for finished goods and merchandise and work in progress
products, and whether the Company’s accounting principles for inventory is
compliant with applicable standards.
We have also performed procedures to verify calculation models and
assessed the reasonableness of applied prices, consumption rates and
assumptions regarding the allocation of indirect production costs. We
have also performed procedures on metal hedging related to inventory.
Finally, we have also reviewed the disclosures provided in the annual
report.
115 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Other Information than the annual accounts and consolidated
accounts
This document also contains other information than the annual
accounts and consolidated accounts and is found on pages 1-57 and
118-143. The report on management remuneration for the financial
year 2021 which will be issued after the date of this auditor’s report
is also considered other information. The Board of Directors and the
Managing Director are responsible for this other information.
Our opinion on the annual accounts and consolidated accounts
does not cover this other information and we do not express any form
of assurance conclusion regarding this other information.
In connection with our audit of the annual accounts and consoli-
dated accounts, our responsibility is to read the information identified
above and consider whether the information is materially inconsistent
with the annual accounts and consolidated accounts. In this proce-
dure we also take into account our knowledge otherwise obtained in
the audit and assess whether the information otherwise appears to be
materially misstated.
If we, based on the work performed concerning the other informa-
tion which we received up until the date of this auditor’s report, con-
clude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this
regard.
If we, in connection with reading the management remuneration
report, conclude that there is a material misstatement we are required
to report this to the board of directors and request correction.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for
the preparation of the annual accounts and consolidated accounts
and that they give a fair presentation in accordance with the Annual
Accounts Act and, concerning the consolidated accounts, in accord-
ance with IFRS as adopted by the EU. The Board of Directors and the
Managing Director are also responsible for such internal control as
they determine is necessary to enable the preparation of annual
accounts and consolidated accounts that are free from material mis-
statement, whether due to fraud or error.
In preparing the annual accounts and consolidated accounts, The
Board of Directors and the Managing Director are responsible for the
assessment of the company’s and the group’s ability to continue as a
going concern. They disclose, as applicable, matters related to going
concern and using the going concern basis of accounting. The going
concern basis of accounting is however not applied if the Board of
Directors and the Managing Director intends to liquidate the company,
to cease operations, or has no realistic alternative but to do so.
The Audit Committee shall, without prejudice to the Board of Direc-
tor’s responsibilities and tasks in general, among other things oversee
the company’s financial reporting process.
Auditor’s responsibility
Our objectives are to obtain reasonable assurance about whether the
annual accounts and consolidated accounts as a whole are free from
material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinions. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs and generally accepted auditing standards in
Sweden will always detect a material misstatement when it exists. Mis
-
statements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these
annual accounts and consolidated accounts.
As part of an audit in accordance with ISAs, we exercise profes-
sional judgment and maintain professional skepticism throughout the
audit. We also:
• Identify and assess the risks of material misstatement of the
annual accounts and consolidated accounts, whether due to fraud
or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omis-
sions, misrepresentations, or the override of internal control.
• Obtain an understanding of the company’s internal control relevant
to our audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opin-
ion on the effectiveness of the company’s internal control.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by the Board of Directors and the Managing Director.
• Conclude on the appropriateness of the Board of Directors’ and the
Managing Director’s use of the going concern basis of accounting in
preparing the annual accounts and consolidated accounts. We also
draw a conclusion, based on the audit evidence obtained, as to
whether any material uncertainty exists related to events or condi-
tions that may cast significant doubt on the company’s and the
group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the annual accounts
and consolidated accounts or, if such disclosures are inadequate,
tomodify our opinion about the annual accounts and consolidated
accounts. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or con
-
ditions may cause a company and a group to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the
annual accounts and consolidated accounts, including the disclo-
sures, and whether the annual accounts and consolidated accounts
represent the underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient and appropriate audit evidence regarding the
financial information of the entities or business activities within the
group to express an opinion on the consolidated accounts. We are
responsible for the direction, supervision and performance of the
group audit. We remain solely responsible for our opinions.
We must inform the Board of Directors of, among other matters, the
planned scope and timing of the audit. We must also inform of signifi-
cant audit findings during our audit, including any significant deficien-
cies in internal control that we identified.
We must also provide the Board of Directors with a statement that
we have complied with relevant ethical requirements regarding inde-
pendence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence,
and where applicable, actions taken to eliminate threats or related
safeguards applied.
From the matters communicated with the Board of Directors, we
determine those matters that were of most significance in the audit of
the annual accounts and consolidated accounts, including the most
important assessed risks for material misstatement, and are there-
fore the key audit matters. We describe these matters in the auditor’s
report unless law or regulation precludes disclosure about the matter.
116 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
Report on the audit of the administration and the proposed
appropriations of the company’s profit or loss
Opinions
In addition to our audit of the annual accounts and consolidated
accounts, we have also audited the administration of the Board of
Directors and the Managing Director of Gränges AB (publ) for the year
2021 and the proposed appropriations of the company’s profit or loss.
We recommend to the general meeting of shareholders that the
profit be appropriated (loss be dealt with) in accordance with the pro-
posal in the statutory administration report and that the members of
the Board of Directors and the Managing Director be discharged from
liability for the financial year.
Basis for opinions
We conducted the audit in accordance with generally accepted audit-
ing standards in Sweden. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities section. We are
independent of the parent company and the group in accordance with
professional ethics for accountants in Sweden and have otherwise
fulfilled our ethical responsibilities in accordance with these require-
ments.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinions.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors is responsible for the proposal for appropria-
tions of the company’s profit or loss. At the proposal of a dividend, this
includes an assessment of whether the dividend is justifiable consid-
ering the requirements which the company’s and the group’s type of
operations, size and risks place on the size of the parent company’s
and the group’s equity, consolidation requirements, liquidity and posi-
tion in general.
The Board of Directors is responsible for the company’s organiza-
tion and the administration of the company’s affairs. This includes
among other things continuous assessment of the company’s and the
group’s financial situation and ensuring that the company’s organiza-
tion is designed so that the accounting, management of assets and
the company’s financial affairs otherwise are controlled in a reassur-
ing manner. The Managing Director shall manage the ongoing adminis-
tration according to the Board of Directors’ guidelines and instructions
and among other matters take measures that are necessary to fulfill
the company’s accounting in accordance with law and handle the
management of assets in a reassuring manner.
Auditor’s responsibility
Our objective concerning the audit of the administration, and thereby
our opinion about discharge from liability, is to obtain audit evidence
to assess with a reasonable degree of assurance whether any member
of the Board of Directors or the Managing Director in any material
respect:
• has undertaken any action or been guilty of any omission which can
give rise to liability to the company, or
• in any other way has acted in contravention of the Companies Act,
the Annual Accounts Act or the Articles of Association.
Our objective concerning the audit of the proposed appropriations of
the company’s profit or loss, and thereby our opinion about this, is to
assess with reasonable degree of assurance whether the proposal is
in accordance with the Companies Act.
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with generally
accepted auditing standards in Sweden will always detect actions or
omissions that can give rise to liability to the company, or that the pro-
posed appropriations of the company’s profit or loss are not in accord-
ance with the Companies Act.
As part of an audit in accordance with generally accepted auditing
standards in Sweden, we exercise professional judgment and main-
tain professional skepticism throughout the audit. The examination of
the administration and the proposed appropriations of the company’s
profit or loss is based primarily on the audit of the accounts. Addi-
tional audit procedures performed are based on our professional
judgment with starting point in risk and materiality. This means that
we focus the examination on such actions, areas and relationships
that are material for the operations and where deviations and viola-
tions would have particular importance for the company’s situation.
We examine and test decisions undertaken, support for decisions,
actions taken and other circumstances that are relevant to our opinion
concerning discharge from liability. As a basis for our opinion on the
Board of Directors’ proposed appropriations of the company’s profit or
loss we examined the Board of Directors’ reasoned statement and a
selection of supporting evidence in order to be able to assess whether
the proposal is in accordance with the Companies Act.
The auditor’s examination of the ESEF report
Opinion
In addition to our audit of the annual accounts and consolidated
accounts, we have also examined that the Board of Directors and the
Managing Director have prepared the annual accounts and consoli-
dated accounts in a format that enables uniform electronic reporting
(the Esef report) pursuant to Chapter 16, Section 4(a) of the Swedish
Securities Market Act (2007:528) for Gränges AB for the financial year
2021.
Our examination and our opinion relate only to the statutory
requirements.
In our opinion, the ESEF report #[checksum] has been prepared in a
format that, in all material respects, enables uniform electronic
reporting.
Basis for opinion
We have performed the examination in accordance with FAR’s recom-
mendation RevR 18 Examination of the ESEF report. Our responsibility
under this recommendation is described in more detail in the Auditors’
responsibility section. We are independent of Gränges AB in accord-
ance with professional ethics for accountants in Sweden and have
otherwise fulfilled our ethical responsibilities in accordance with
these requirements.
We believe that the evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Responsibilities of the Board of Directors
and the Managing Director
The Board of Directors and the Managing Director are responsible for
the preparation of the Esef report in accordance with Chapter 16, Sec-
tion 4(a) of the Swedish Securities Market Act (2007:528), and for such
internal control that the Board of Directors and the Managing Director
determine is necessary to prepare the Esef report without material
misstatements, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to obtain reasonable assurance whether the Esef
report is in all material respects prepared in a format that meets the
requirements of Chapter 16, Section 4(a) of the Swedish Securities
Market Act (2007:528), based on the procedures performed.
RevR 18 requires us to plan and execute procedures to achieve rea-
sonable assurance that the Esef report is prepared in a format that
meets these requirements.
Reasonable assurance is a high level of assurance, but it is not a
guarantee that an engagement carried out according to RevR 18 and
generally accepted auditing standards in Sweden will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in aggre-
gate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the Esef report.
The audit firm applies ISQC 1 Quality Control for Firms that Perform
Audits and Reviews of Financial Statements, and other Assurance and
Related Services Engagements and accordingly maintains a compre-
hensive system of quality control, including documented policies and
procedures regarding compliance with professional ethical require-
ments, professional standards and legal and regulatory requirements.
117 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
The examination involves obtaining evidence, through various pro-
cedures, that the Esef report has been prepared in a format that ena-
bles uniform electronic reporting of the annual and consolidated
accounts. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement in the
report, whether due to fraud or error. In carrying out this risk assess-
ment, and in order to design audit procedures that are appropriate in
the circumstances, the auditor considers those elements of internal
control that are relevant to the preparation of the Esef report by the
Board of Directors and the Managing Director, but not for the purpose
of expressing an opinion on the effectiveness of those internal con-
trols. The examination also includes an evaluation of the appropriate-
ness and reasonableness of assumptions made by the Board of Direc-
tors and the Managing Director.
The procedures mainly include a technical validation of the Esef
report, i.e. if the file containing the Esef report meets the technical
specification set out in the Commission’s Delegated Regulation (EU)
2019/815 and a reconciliation of the Esef report with the audited
annual accounts and consolidated accounts.
Furthermore, the procedures also include an assessment of wheth er
the Esef report has been marked with iXBRL which enables a fair and
complete machine-readable version of the consolidated statement of
financial performance, financial position, changes in equity and cash
flow.
The auditor’s examination of the corporate governance statement
The Board of Directors is responsible for that the corporate govern-
ance statement on pages 58-70 has been prepared in accordance with
the Annual Accounts Act.
Our examination of the corporate governance statement is con-
ducted in accordance with FAR´s auditing standard RevR 16 The audi-
tor´s examination of the corporate governance statement. This means
that our examination of the corporate governance statement is differ-
ent and substantially less in scope than an audit conducted in accord-
ance with International Standards on Auditing and generally accepted
auditing standards in Sweden. We believe that the examination has
provided us with sufficient basis for our opinions.
A corporate governance statement has been prepared. Disclosures
in accordance with chapter 6 section 6 the second paragraph points
2-6 of the Annual Accounts Act and chapter 7 section 31 the second
paragraph the same law are consistent with the other parts of the
annual accounts and consolidated accounts and are in accordance
with the Annual Accounts Act.
Ernst & Young AB, Hamngatan 26, 111 47, Stockholm, was appointed
auditor of Gränges AB by the general meeting of the shareholders on
the 6 May 2021 and has been the company’s auditor since the 10 May
20 07.
Stockholm 16 March 2022
Ernst & Young AB
Andreas Troberg
Authorized Public Accountant
118 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Sustainability notes
The sustainability information in this report relates to the financial
year 2021 and covers all fully owned operations of the Group at the
start of 2021. Refer to page 110 for a list of group companies. Gränges
Konin and Gränges Powder Metallurgy are excluded in historical data
as the companies were fully acquired in 2020. As of 2021, sustainabil-
ity data is presented by business area to align with financial reporting.
The statutory sustainability report according to the Swedish Annual
Accounts Act has been issued by Gränges’ Board of Directors, read
more on page 55.
The sustainability information has been prepared in accordance
with GRI Standards: Core option and constitutes Gränges’ Communi-
cation on Progress in line with UN Global Compact guidelines. Envi-
ronmental data related to carbon emissions intensity and share of
sourced aluminium scrap has been externally assured by the compa-
ny’s auditors EY. The rest of the report and its content have not been
externally assured. GRI’s guidance on the reporting principles of
materiality, stakeholder inclusiveness, sustainability context, and
completeness, has been used to define the content of the report.
Gränges has published a sustainability report each year since 2015.
The company’s last sustainability report was published on 18 March
2021. Gränges intends to continue to publish a report annually.
For more information, please contact:
Sofia Hedevåg, SVP Sustainability
sofia.hedevag@granges.com
+46 733 03 79 79
About Gränges’ sustainability report
Gränges’ sustainability efforts are led by Group Management, which
includes the SVP Sustainability as of 1 April 2021. Group Manage-
ment ensures that Gränges’ global sustainability strategy, long-term
targets and policies are aligned with the company’s vision and strat-
egy. Group Management also reviews and monitors regional sus-
tainability performance against sustainability targets, as well as
makes decisions related to global sustainability priorities.
The Group Sustainability department, headed by the SVP Sus-
tainability, is responsible for coordinating, facilitating, and driving
the global sustainability strategy and long-term targets as well as
issuing sustainability-related policies. Other responsibilities include
regular communication and reporting on Gränges’ sustainability
performance and progress to internal and external stakeholders as
well as coordinating a continuous stakeholder dialogue. The regional
Presidents are responsible for executing and implementing local
sustainability strategies and targets, aligned with the global strategy
and the local needs.
At the end of 2021, Gränges established an internal Sustainability
Board to ensure a systematic follow-up of Gränges’ sustainability
strategy execution at all regions and sites. This internal Board is
chaired by the SVP Sustainability and is also represented by the CEO.
Gränges’ CEO regularly presents global sustainability perfor-
mance to the Board of Directors, who reviews and monitors perfor-
mance against the company’s targets. The Board of Directors is the
body which approves the company’s global sustainability strategy,
long-term targets, and policies, and adopts the annual sustainabil-
ity report.
To ensure integration of sustainability aspects into key functions
such as Purchasing, Sales, Production and Human Resources, as well
as to coordinate group-wide priorities and ensure best practice shar
-
ing across the organization, Gränges has established cross-regional
teams which meet regularly and where all regions are represented.
Sustainability governance
BOARD OF DIRECTORS
GROUP MANAGEMENT – CEO
GROUP SUSTAINABILITY FUNCTION – SVP Sustainability
Gränges Americas
– President
Gränges Americas
– President
Gränges Asia
– President
Gränges Europe
– President
Internal
Sustainability Board
– CEO, SVP Sustainability
Sustainability innovation & sales team
Sustainability
innovation & sales
Responsible & sustainable sourcing team
Responsible &
sustainable sourcing
EHS and GPS teams
Resource-efficient
operations
HR Council
Diverse and high-
performing teams
Ethical
business practices
119 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Gränges seeks to establish long-term and transparent dialogues
with its stakeholders. Stakeholder inclusiveness is a priority for
Gränges, and the company maintains an ongoing dialogue with its
stakeholders to ensure it meets their expectations. As part of the
sustainability reporting process, Gränges engages selected stake-
holders in a structured dialogue to identify key sustainability topics
and reporting content. The key issues raised in the stakeholder
dialogue constitute the main parts of the company’s materiality
assessment and reporting. Gränges has identified five main stake-
holder groups to include in the stakeholder dialogue: customers,
employees, investors, society, and suppliers.
Gränges conducted a comprehensive and structured stakeholder
dialogue in 2016 (China and Sweden) and 2017 (the US). The com-
pany used a web-based survey which aimed to help identify which
sustainability topics were most important to Gränges’ stakeholders.
Topics included in the survey were identified through analysis of
industry standards, sustainability reporting frameworks, and topics
previously raised by stakeholders. Respondents could also raise
additional sustainability issues in the survey. In total, 439 respond-
ents from different stakeholder groups responded to the survey
and provided input to Gränges’ materiality analysis. Gränges also
conducted follow-up interviews with a selection of stakeholders to
better understand more their expectations.
In line with the process 2018–2020, Gränges in 2021 conducted
structured interviews with representatives from different stake-
holder groups with the aim to better understand their perceptions of
Gränges’ sustainability report, sustainability efforts and to validate
that the company reports on relevant and prioritized sustainability
topics. Gränges also asked stakeholders about their future expecta-
tions on the company from a sustainability perspective. In summary,
Gränges received positive feedback on both the report and the sus-
tainability efforts. Expectations on future efforts were for example
to intensify communication about sustainable products and future
opportunities and, quantify the contribution to the green transition.
Input from stakeholders have been integrated into this 2021 Annual
and Sustainability report.
Stakeholder dialogue
Stakeholder group Dialogue forum Key sustainability topics for stakeholders Page
Customers • Customer survey
• Fairs, seminars
• Ongoing dialogue
• Questionnaires from customers
• Stakeholder surveys and in-depth interviews
• Customer satisfaction
• Sustainable innovation
• Energy and emissions
• Health and safety
• Product stewardship
• Aluminium scrap and raw materials
• Supplier assessments
33-34
33
38, 31–32, 126–128
40, 42, 130, 132
34, 124
35–37, 125
35, 124
Employees • Annual performance reviews
• Employee surveys every two years
• Internal trainings
• Intranet communication
• Stakeholder surveys and in-depth interviews
• Workplace meetings
• Diversity and equality
• Emissions to air and water
• Ethics and anti-corruption
• Gränges’ workplace
• Health and safety
• Product stewardship
• Supplier assessments
41–42, 132
31–32, 39, 127–129
43, 133
41–42, 131–132
40, 42, 130, 132
34, 124
35, 124
Investors • Annual General Meeting
• Annual and quarterly reports
• Capital markets days
• Quarterly conference calls
• Investor and analyst seminars and meetings
• Press releases
• Stakeholder surveys and in-depth interviews
• Sustainability questionnaires from ESG data providers
• Gränges’ website
• Customer satisfaction
• Economic performance
• Sustainable innovation
• Energy and emissions
• Ethics and anti-corruption
• Gränges’ workplace
• Product stewardship
• Aluminium scrap and raw materials
• Supplier assessments
33–34
2, 70–112
33
38, 31–32, 126–128
43, 133
41–42, 131–132
34, 124
35–37, 125
35, 124
Society • Collaboration with universities and schools
• Interns and student dissertations
• Local cooperation, ongoing dialogue
• Participation in networks and working groups
• Stakeholder surveys and in-depth interviews
• Community involvement
• Energy and emissions
• Health and safety
www.granges.com/sustainability
38, 31–32, 126–128
40, 42, 130, 132
Suppliers • Ongoing dialogue
• Stakeholder surveys and in-depth interviews
• Supplier assessments
• Supplier Code of Conduct
• Customer satisfaction
• Economic performance
• Energy and emissions
• Ethics and anti-corruption
• Health and safety
• Aluminium scrap and raw materials
• Purchasing processes
33–34
2, 70–112
38, 31–32, 126–128
43, 133
40, 42, 130, 132
35–37, 125
35–36, 124–125
120 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Gränges’ material topics and their boundaries
Impact occurs in/at Gränges’
Gränges’ sustainability pillar Gränges’ material topics Corresponding GRI Standards topic Suppliers Operations Customers Page
Sustainable
innovation and sales
Sustainable innovation – x x 33
Product stewardship – x x x 34, 124
Responsible and
sustainable sourcing
Responsible sourcing
Supplier environmental assessment
Supplier social assessment
x
35–36,
124–125
Sourced metals Materials x x x 37, 125
Emissions and climate impact Emissions x x x
31–32,
127–128
Resource-efficient
operations
Energy Energy x x 38, 126
Waste management Waste x x 39, 128
Water management Water x x 39, 129
Workplace safety
Occupational health
and safety
x 40, 130
Diverse and
high-performing teams
Employee wellbeing x 42, 132
Diversity and inclusion Diversity and equal opportunity x 41–42, 132
Career and leadership Training and education x 41, 131
Ethical business
practices
Ethics and anti-corruption Anti-corruption x x x 43, 133
Note: Some topic names have been slightly adjusted in 2021.
In 2021, Gränges validated its selection of material topics using input
from the in-depth interviews described on page 119. Gränges’ decision
from 2018 to prioritize sustainability topics across five sustainability
pillars was in 2021 assessed to be valid and relevant with the addition
of waste as a new material topic. The topic sourced aluminium scrap
was expanded and renamed to sourced metals to include both alu-
minium scrap and primary aluminium.
Materiality analysis and topic boundaries
Gränges participates in the following industry initiatives: Aluminium
Association, Aluminium Stewardship Initiative, Big Science Sweden,
China Nonferrous Metals Industry Association, Confederation of
Swedish Enterprise, European Aluminium, European Aluminium Foil
Association, Global Aluminium Foil Roller Initiative, Economic Cham-
ber of Non-Ferrous Metals and Recycling, the Polish Aluminium Asso-
ciation, Nonferrous metals Society of Shanghai, Shanghai Aluminium
Trade Association, Scandinavian Automotive Supplier Association,
and Svenskt Aluminium.
Gränges’ operations in Finspång is also a member of the local
associations Näringslivsrådet, Vision East Sweden, and Östsvenska
Handels kammaren, as there is a strategic interest at local level
related to areas such as recruitment, infrastructure and influence
in important political topics.
Gränges supports international standards on human rights, labour
conditions, the environment and anti-corruption, the UN Global
Compact, UN Universal Declaration of Human Rights and the OECD
Guidelines for Multinational Corporations.
Gränges also helps to fulfil the 2030 Agenda and the Sustainable
Development Goals (SDGs), read more on page 121.
External initiatives and memberships
Gränges’ sustainability performance and management are continu-
ously assessed by customers, sustainability and ESG analysts as
well as other stakeholders. This serves as an important element of
the ongoing stakeholder dialogue and is in line with the company’s
ambition to provide stakeholders with a credible basis for their eval-
uation of Gränges. Below are some examples of external evaluation
and recognition within sustainability.
Aluminium Stewardship Initiative (ASI): Gränges Finspång and
Gränges Shanghai have achieved certifications against the ASI Per-
formance Standard (Shanghai: July 2019, Finspång: February 2021)
and the ASI Chain of Custody Standard (Finspång: November 2021,
Shanghai: January 2022). These certifications demonstrate that
Gränges’ products are responsibly and sustainably sourced and pro-
duced.
EcoVadis: Gränges achieved a Platinum award in the 2021
EcoVadis sustainability ranking, placing Gränges among the leading
1 per cent of companies assessed globally in the industry ‘Manufac-
ture of basic precious and other non-ferrous metals’.
CDP: Gränges responded to CDP’s Climate change questionnaire
for the first time in 2021 and achieved a B score.
MSCI: Gränges received an AA rating in the MSCI ESG Ratings assess-
ment 2021, which positions Gränges among the top 8 per cent compa-
nies in the Metals and Mining sector (Non-Precious Metals).
1)
MSCI ESG
Ratings are provided on global public and a few private companies on a
scale of AAA (highest rating) to CCC (lowest rating), according to expo-
sure to industry specific ESG risks and the ability to manage those risks
relative to peers.
Sustainalytics: Gränges achieved an overall risk rating of 20.3
(Medium) in Sustainalytics’ ESG Risk Rating Report 2021.
2)
This rating
placed the company as the number 1 among 33 aluminium companies
and number 2 among 161 metal companies
1) The use by Gränges of any MSCI ESG research llc or its affiliates (“MSCI”) data, and the use
of MSCI logos, trademarks, service marks or index names herein, do not constitute a spon-
sorship, endorsement, recommendation, or promotion of Gränges by MSCI. MSCI services
and data are the property of MSCI or its information providers, and are provided ‘as-is’ and
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External reporting and evaluation
121 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Sustainable development goals
Gränges helps to fulfil the 2030 Agenda and Sustainable Development Goals (SDGs). In the table below,
those SDGs that have been identified as most relevant for Gränges’ business and where the company has
its largest contributions and impacts, are outlined.
UN SDG
number and
applicable
targets
UN SDG
name Gränges’ contributions to the UN SDGs Gränges’ material topics
3.8
3.9
Good health
and wellbeing
• Gränges works to attract and safeguard competent employees
and ensure proper working conditions, including access to
essential health care services and medicines.
• Gränges strives to minimize employee exposure to chemicals,
and performs chemical risk assessments using a precautionary
principle, to ensure employees use alternatives that are as safe
and environmentally sound as possible.
• Employee wellbeing
4.4 Quality
education
• Gränges works to attract and retain a skilled workforce and
works closely with universities etc. to give students access to
the corporate environment.
• Gränges works to develop competencies that enhance both
individual and organizational performance. As part of the
annual performance and development discussion, each
employee and their direct manager decide on individual training
and development.
• Career and leadership
5.1
5.5
Gender
equality
• Gränges works to promote equal opportunities, diversity and
gender equality and has articulated a 2025 target to have at
least 30 per cent women in senior management.
• Gränges ‘ operations in Finspång annually performs a gender-
related disparity pay analysis to find any non-objective gaps.
• Gränges works to promote an open and non-discriminatory
workplace in its supply chain.
• Diversity and inclusion
6.3
6.4
6.5
Clean water
and sanitation
• Gränges works to reduce emissions to both air and water. The
company has set a 2025 target to implement local water man-
agement plans based on local water conditions (quality, quan-
tity and governance) at all production sites. Such plans should
include local targets and actions to address water-related
impacts, including water efficiency improvement.
• Gränges works to put in place mechanisms to identify water
risks throughout the global supply chain.
• Responsible sourcing
• Water management
7. 2
7. 3
Affordable
and clean
energy
• Gränges has initiated efforts to increase the share of renewable
energy in its operations and to promote the topic in its supply
chain, as this is a way to reduce the supply chain carbon foot-
print. The company has a target to increase renewable energy to
at least 20 per cent to 2025.
• Gränges works to improve energy intensity and has a target to
reduce energy intensity by 17 per cent to 2025 compared with
2017.
• Energy
8.4
8.5
8.7
8.8
Decent work
and economic
growth
• Gränges works to improve resource efficiency in its operations
through energy and materials efficiency, reduce and reuse
waste as well as increased use of aluminium scrap.
• Gränges works to ensure full employment and decent work with
equal pay, and to ensure a working environment that promotes
high safety standards.
• Gränges works to put in place mechanisms to identify social
risks throughout the global supply chain, including human
rights (forced labour, child labour etc.) and working conditions.
• Career and leadership
• Diversity and inclusion
• Responsible sourcing
• Sourced metals
• Waste management
• Workplace safety
9.4 Industry,
innovation
and infra-
structure
• Gränges works to develop sustainable products and solutions.
The company works to leverage properties of aluminium (light-
weight, recy clable etc.) to enable transition to low-carbon and
efficient automotive applications (increase fuel efficiency in
vehicles) and in other industries such as HVAC.
• Sustainable innovation
• Product stewardship
UN SDG
number and
applicable
targets
UN SDG
name Gränges’ contributions to the UN SDGs Gränges’ material topics
10.3 Reduced
inequalities
• Gränges works to ensure equal opportunities and to eliminate
discrimination among its workforce. This is followed up by for
example employee surveys every second year.
• Gränges works to promote an open and non-discriminatory
workplace in its supply chain.
• Diversity and inclusion
• Responsible sourcing
11.6 Sustainable
cities and
communities
• Gränges works to leverage the sustainability properties of
aluminium (lightweight, recyclable etc.) and develops HVAC
solutions that contribute to energy efficient and sustainable
buildings.
• Sustainable innovation
• Product stewardship
12.2
12.4
12.5
12.6
Responsible
consumption
and produc-
tion
• Gränges works to improve material efficiency and recycling
rates and to minimize harmful emissions and waste. The com-
pany performs chemical substance hazard analysis and substi-
tutes chemicals to reduce exposure to personnel.
• Gränges integrates sustainability information into its reporting
cycle and publishes an annual sustainability report.
• Gränges works to ensure sustainable procurement practices
and traceable practices in the supply chain.
The company works to promote and improve product life-cycle
sustainability performance.
• Gränges works to develop innovative products that can reduce
energy needs in usage.
• Sustainable innovation
• Product stewardship
• Responsible sourcing
• Sourced metals
• Waste management
13.1
13.3
Climate
action
• Gränges works to counteract climate change throughout the
value chain. With regards to its own operations, Gränges works
to improve energy efficiency and has initiated efforts to
increase use of renewable energy.
• Gränges develops sustainable products aimed at improving
customers’ and end-users’ energy efficiency.
• Gränges works to understand the climate risks and build resilience
into the company’s operations and supply chain.
• Gränges has set a 2025 target to reduce carbon emissions
intensity from own operations and purchased energy (scope
1+2) by 25 per cent versus 2017 and to reduce carbon emis-
sions intensity from sourced metal inputs (scope 3) by at least
30 per cent to 2025.
• Sustainable innovation
• Emissions and climate
impact
• Energy
• Responsible sourcing
16.5 Peace, justice
and strong
institutions
• Gränges has zero tolerance for bribery and other types of
corruption in its operations, and has set a 2025 target that
white-collar employees are to be trained each year.
• Ethics and anti-corruption
17.16 Partnerships
for the goals
• Gränges has been a signatory of the UN Global Compact since
2016, and collaborates with industry associations and local
community networks to support and enhance the partnership
for sustainable development.
• Gränges works to promote and improve the sustainability per-
formance (life-cycle perspective) of aluminium through value
chain collaboration. One example is Gränges’ participation in
Aluminium Stewardship Initiative (ASI).
• Product stewardship
• Responsible sourcing
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SEK million
Proportion of taxonomy-eligible
economic activities (%)
Proportion of taxonomy non-eligible
economic activities (%)
Turnover 18,130 28 72
Capex 925 27 73
Opex 614 28 72
Target KPI 2021 2020 2019 2018 2017
SPT 1 Total carbon emissions intensity from
own operations and purchased energy
(scope 1+2), tonnes CO
2
e/tonne
0.88 0.83 0.82 0.76 0.81
SPT 2 Total carbon emissions intensity from
sourced metal inputs (scope 3), tonnes
CO
2
e/tonne
8.4 9.6 10.5 11.2 11.9
SPT 3 Share of aluminium scrap of total
sourced metal inputs, %
28.5 22.5 19.8 16.7 11.5
EU Taxonomy Sustainability-Linked Bond
In 2021, Gränges conducted an analysis together with an external advi-
sor to identify eligible economic activities for the currently adopted
environmental objectives climate change mitigation and climate change
adaptation. The company has identified ‘Manufacture of aluminium
through secondary aluminium recycling’, to be an eligible activity, which
is part of the economic activity 3.8. Manufacture of aluminium.
On 23 September 2021, Gränges successfully issued a five-year
SEK 600 million senior unsecured Sustainability-Linked Bond under
the company’s MTN programme. The new bond is due in 2026 and has
a coupon of three months Stibor + 1.20 per cent. Gränges has tied
the Sustainability-Linked Bond to the achievement of three defined
sustainability performance targets (SPTs), which all play a central role
in Gränges’ sustainability strategy.
SPT 1: Reduce carbon emissions intensity from own operations and
purchased energy (scope 1+2) by 25 per cent by 2025 compared
to2017.
SPT 2: Reduce carbon emissions intensity from sourced metal inputs
(scope 3) by 30 per cent by 2025 compared to 2017.
SPT 3: Increase the share of aluminium scrap to at least 30 per cent
oftotal sourced metal inputs by 2025.
1)
Total carbon emissions intensity from own opera-
tions and purchased energy (scope 1+2) amounted
to 0.88 tonnes CO
2
e/tonne in 2021. Excluding
Gränges Konin and Gränges Powder Metallurgy, the
intensity was reduced by 11 per cent to 0.73 (0.83).
Gränges has now reduced carbon intensity (scope
1+2) by 8 per cent compared to baseline 2017.
2)
Total carbon emissions intensity from sourced
metal inputs (scope 3) amounted to 8.4 tonnes
CO
2
e/tonne in 2021. Excluding Gränges Konin and
Gränges Powder Metallurgy, the intensity was
reduced by 3 per cent to 9.3 (9.6). Gränges has now
reduced carbon intensity (scope 3) by 20 per cent
compared to baseline 2017.
2)
The share of sourced aluminium scrap reached
28.5 per cent in 2021. Excluding Gränges Konin and
Gränges Powder metallurgy, the share increased by
2.5 percentage points to 25.0 (22.5).
To calculate the proportion of taxonomy eligible
economic activities and related turnover, Capex
and Opex, Gränges has used the share of aluminium
scrap as a proxy.
Turnover: Gränges has calculated the proportion
of taxonomy eligible economic activities as share
of sourced aluminium scrap in relation to net sales
of goods as presented in the consolidated income
statement.
Capex: Gränges has calculated the proportion of
taxonomy eligible economic activities as share of
sourced aluminium scrap in relation to Capex
related to manufacturing. This includes the total
of business combinations and acquisitions for
intangible assets, property, plant and equipment
and right-of-use-assets.
Opex: Gränges has calculated the proportion of
taxonomy eligible economic activities as share of
sourced aluminium scrap in relation to Opex related
to manufacturing. This includes the total of repair
and maintenance expenses, R&D costs, short-term
leases and leases of low-value.
1) Recycled aluminium has been renamed to aluminium scrap.
2) Baseline 2017 has been recalculated to include Gränges Konin. Updated numbers for baseline 2017 are 0.96 for SPT1 and 10.5 for
SPT2. The table above shows reported figures, where 2017–2020 exclude Gränges Konin and Gränges Powder Metallurgy.
123 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Sustainability performance summary
Target 2025 2021 2020 2019 2018 2017 Note
Sustainable innovation
Products with third-party verified
sustainability information available, % 100 35 19 – – – 1
Responsible and sustainable sourcing
Significant suppliers
1)
, number – 240 140 158 143 116 2
Significant suppliers committed to
Gränges’ Supplier Code of Conduct or
equivalent standard, % of purchase value 100 98 97 99 98 – 2
Significant suppliers with a third-party
verified sustainability assessment, number – 33 25 – – – 2
On-site supplier audits, number – 24 5 7 10 – 2
Aluminium scrap of total sourced
metal inputs, % ≥30 28.5 22.5 19.8 16.7 11.5 3
Renewable energy, % ≥20
5)
15 13 8 9 9 4
Carbon emissions intensity from sourced metal
inputs (scope 3), % reduction vsbaseline 2017 –30
5)
–20 –20 –12 –6 – 5
ASI Performance Standard/Chain of Custody
certification, number of sites All 2/2 1/0 0/0 0/0 0/0 –
Resource-efficient operations
Environmental indicators
Total energy use, GWh – 1,703 1,220 1,216 1,231 1,236 4
Energy intensity, % reduction vs baseline 2017
–17
5)
5 10 7 –1 – 4
Carbon emissions intensity from own
operations and purchased energy
(scope 1+2), % reduction vs baseline 2017 –25
5)
–8 3 1 –6 – 5
Water withdrawal, thousand m
3
– 4,176 2,864 3,203 3,468 3,346 7
Local water management plans,
number of sites All 3/7 2/5 0/5 0/5 0/5 7
Workplace safety indicators
Recordable workplace accidents, number – 35 20 17 23 28 8
Lost workday cases, number – 22 11 10 14 14 8
Fatalities, number – 0 0 0 0 0 8
Total Recordable Rate, number of recordable
accidents per million hours worked ≤3.0 6.5 5.5 4.4 6.1 7. 8 8
Severity Rate, number of lost workdays per
million hours worked ≤50 139 109 142 165 112 8
Target 2025 2021 2020 2019 2018 2017 Note
Diverse and high-performing teams
Employees on average
2)
, number – 2,648 1,647 1,797 1,699 1,568 –
Employees at year end
3)
, number – 2,712 1,774 1,782 1,803 1,637 9
Employees with permanent contract, % – 96 98 97 95 – 9
Employees with temporary contract, % – 4 2 3 5 – 9
Full-time employees, % – 100 100 100 100 – 9
Part-time employees, % – 0 0 0 0 – 9
White-collar employees, % – 26 30 31 30 31 9
Blue-collar employees, % – 74 70 69 70 69 9
Employees receiving annual performance
and development discussion, % 100 67 100 100 99 – 10
Women in Board of Directors/
Group Management
3)
, % – 43/20 43/14 43/13 43/13 50/13 11
Women among senior management
3) 4)
, % ≥ 30 18 21 20 20 20 11
Women in total workforce
3)
, % – 13 15 14 14 14 11
Employee engagement index, 0–100 ≥85 – 78 – 77 – 12
Sick-leave
2)
, % – 3.7 2.0 1.6 1.6 2.0 12
Employee turnover
2)
, % – 18.7 16.0 11.8 9.1 7. 4 12
Employees covered by collective
bargaining agreements, % – 78 68 68 70 70 –
Ethical business practices
Employees trained in Gränges’
Code of Conduct, % 100 100 100 99 99 – 13
Employees trained in anti-corruption,
% white collar 100 100 100 100 – – 13
Incidents related to corruption, number – 0 0 0 0 0 13
Note: 2017–2020 exclude Gränges Konin and Gränges Powder Metallurgy.
1) All metal suppliers (suppliers of primary ingots, purchased slabs, aluminium scrap, alloying elements) as well as other
suppliers which have an annual purchase value above SEK 5 million or an equivalent amount in local currencies.
2) Expressed as full-time positions.
3) Expressed as headcount on December 31.
4) Employees eligible to participate in Gränges’ long-term incentive (LTI) programme.
5) Versus baseline 2017, recalculated to include Gränges Konin.
124 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Notes
>> 2 Responsible sourcing
Significant suppliers
Significant suppliers, number 2021 2020 2019
Gränges Eurasia 143 55 52
Finspång 42 32 33
Konin 67 – –
Shanghai 21 13 14
Gränges Americas 97 85 106
Gränges total 240 140 158
Supplier Code of Conduct commitments
Significant suppliers committed to
Gränges’ Supplier Code of Conduct
or equivalent standard, % purchase
value 2021 2020 2019
Gränges Eurasia 97 94 98
Finspång 100 93 100
Konin 97 – –
Shanghai 97 97 97
Gränges Americas 99 100 100
Gränges total 98 97 99
Supplier audits
Audits conducted among significant
suppliers, number 2021 2020 2019
Gränges Eurasia 23 4 7
Finspång 5 0 2
Konin 7 – –
Shanghai 11 4 5
Gränges Americas 1 1 0
Gränges total 24 5 7
>> 1 Product stewardship
Comment: In 2021, Gränges Shanghai developed and implemented a
local version of Gränges’ life-cycle and carbon footprint assessment
tool to enable declarations of environmental impacts on a product level,
starting with the products’ carbon footprint. The tool has previously
been implemented in Gränges Finspång. This means that in total, 35 per
cent of Gränges’ products had verified sustainability information avail-
able in 2021. Excluding Gränges Konin and Gränges Powder Metallurgy,
the corresponding figure was 43 per cent (19).
Reporting principles and definitions: Data is reported at regional level
and consolidated annually at group level using common definitions
and principles. Gränges will initially declare the products’ carbon foot-
print impact but aims to expand the information to cover other envi-
ronmental impact categories and sustainability aspects. To ensure
transparency and credibility, Gränges has engaged the external party
IVL Swedish Environmental Research Institute to verify the carbon
footprint methodology, process, and routines. Verification reports and
statements are available on Gränges’ website: https://www.granges.
com/sustainability/sustainable-innovation-and-sales/. Details about
the methodology and key assumptions can be found in local Carbon
footprint reports, also available on Gränges’ website.
Data for Gränges Powder Metallurgy is included in the data for
Gränges Eurasia. Data is not available for 2019 since the project was
initiated at the end of the year. Numbers for 2020 do not include
Gränges Konin and Gränges Powder Metallurgy.
Products with third-party verified sustainability information is defined as
the packed products with third-party verified sustainability information
available [tonnes] divided by the total packed products [tonnes].
Policies: No group-wide policy available. Local procedure and routine
documents available.
Long-term target: Gränges’ 2025 target is that 100 per cent of its prod-
ucts have third-party verified sustainability information available.
Products with third party verified sustainability information
% 2021 2020 2019
Gränges Eurasia 65 48 –
Finspång 100 100 –
Konin 0 0 –
Shanghai 100 0 –
Gränges Americas 0 0 –
Gränges total 35 19 –
125 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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>> 3 Sourced metals
Weight of sourced metal inputs
ktonnes 2021 2020 2019
Primary aluminium 363.9 272.7 287.8
Aluminium scrap 150.4 81.4 72.9
Alloys 14.3 7. 5 7. 8
Gränges total 528.7 361.7 368.4
Weight of sourced aluminium scrap
ktonnes 2021 2020 2019
Gränges Eurasia 58.7 11.2 14.8
Finspång 10.2 7. 6 12.3
Konin 43.9 – –
Shanghai 4.7 3.6 2.5
Gränges Americas 91.7 70.3 58.0
Gränges total 150.4 81.4 72.9
Share of sourced aluminium scrap
Aluminium scrap of total sourced
metal inputs, % 2021 2020 2019
Gränges Eurasia 20.0 6.9 7. 8
Finspång 11.3 11.1 13.9
Konin 43.0 – –
Shanghai 4.7 3.8 2.4
Gränges Americas 39.0 35.2 32.5
Gränges total 28.5 22.5 19.8
Comment: In 2021, the share of sourced aluminium scrap reached
28.5 per cent. Excluding Gränges Konin and Gränges Powder Metal-
lurgy, the share increased by 2.5 percentage points to 25.0 per cent
(22.5). The increase was driven by all regions’ increased sourcing of
aluminium scrap both through commodity traders as well as through
recycling companies and customers.
Reporting principles and definitions: Data is reported at regional level
and consolidated annually at group level using common definitions
and principles. Data for Gränges Powder Metallurgy is included in the
data for Gränges Eurasia. Numbers for 2019 and 2020 do not include
Gränges Konin and Gränges Powder Metallurgy.
Share of sourced aluminium scrap is defined as sourced aluminium
scrap used as input materials [tonnes] divided by total sourced metal
input materials [tonnes].
Policies: The governing policy is Gränges’ EHS Policy, which is
reviewed annually and applies to all employees working at Gränges.
Long-term target: Gränges’ 2025 target is that at least 30 per cent of
total sourced metal inputs is aluminium scrap.
Comment: In 2021, 218 suppliers, corresponding to 98 per cent of the
total purchase value from significant suppliers, had valid commitments
to the Supplier Code of Conduct or had been assessed to have equivalent
standards in place which are in line with Gränges’ sustainability require-
ments. Excluding Gränges Konin and Gränges Powder Metallurgy, this
corresponds to 158 suppliers (127) and 98 per cent (97) respectively. In
2021, 33 of Gränges’ significant suppliers had a third-party verified desk-
top sustainability assessment available. Gränges also conducted 24
on-site supplier audits in 2021, of which 2 suppliers were new. Excluding
Gränges Konin and Gränges Powder Metallurgy, the number was 17 (5).
Supplier audits are conducted periodically depending on suppliers’ stra-
tegic importance and results from supplier performance assessments,
and they mainly focus on ensuring compliance with Gränges’ quality and
delivery requirements. In total, 16 significant suppliers were added to the
supplier base in 2021 and will be included in the annual responsible
sourcing process from 2022. Excluding Gränges Konin and Gränges
Powder Metallurgy this corresponds to 10 suppliers (4).
Reporting principles and definitions: Data is reported at a regional
level by the purchasing organizations and consolidated annually at
group level using common definitions and principles. Data for Gränges
Powder Metallurgy is included in the data for Gränges Eurasia. Num-
bers for 2019 and 2020 do not include Gränges Konin and Gränges
Powder Metallurgy.
Significant supplier is defined as all metal suppliers (suppliers of pri-
mary ingots, purchased slabs, aluminium scrap, alloying elements) as
well as other suppliers which have an annual purchase value above SEK
5 million or an equivalent amount in local currencies. Local purchase
value has been converted to SEK using average currency rates for 2021.
Policies: The governing policy is Gränges’ Responsible Sourcing Policy
which outlines group-wide principles and requirements on responsi-
ble sourcing, including signing Gränges’ Supplier Code of Conduct.
Four of the company’s production sites are certified in accordance
with the quality management standard IATF 16949, which includes
criteria on suppliers’ quality performance.
Long-term target: Gränges’ 2025 target is that 100 per cent of signifi-
cant suppliers are committed to Gränges’ Supplier Code of Conduct or
equivalent standard.
>> CONT. NOTE 2
126 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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>> 4 Energy
Total energy use
GWh 2021 2020 2019
Natural gas 1,016.8 778.4 756.8
Electricity 595.1 390.6 400.1
Liquified petrolium gas 51.7 40.4 45.6
Steam 16.4 – –
Diesel 12.2 6.9 9.8
District heating 10.5 3.8 3.3
Petrol 0.1 0 .1 0 .1
Gränges total 1,702.9 1,220.2 1,215.7
Energy intensity
MWh/tonne 2021 2020 2019
Gränges Eurasia 2.8 2.4 2.3
Finspång 2.4 2.4 2.2
Konin 3.5 – –
Shanghai 2.4 2.5 2.4
Gränges Americas 4.2 4.5 4.7
Gränges total 3.4 3.6 3.5
Development vs baseline 2017, % 5
Note: Development versus baseline 2017, recalculated to include Gränges Konin.
Development between 2020 and 2019 versus baseline are not applicable due to
comparability.
Share of renewable energy
% 2021 2020 2019
Gränges Eurasia 29 39 19
Finspång 74 74 31
Konin 13 – –
Shanghai 12 12 9
Gränges Americas 3 3 2
Gränges total 15 13 8
Comment: In 2021, total energy use was 1,702.9 GWh. Excluding Konin
and Gränges Powder Metallurgy the energy use had increased by 13 per
cent to 1,372.8 GWh (1,220.2), driven by a higher production volume. The
energy intensity decreased by 5 per cent to 3.4 MWh/tonne (3.6), also
when excluding Gränges Konin and Gränges Powder Metallurgy. The
decrease was mainly driven by improved energy effeciency per tonne.
The share of renewable energy increased by 2 percentage points and
reached 15 per cent (13), also when excluding Gränges Konin and Gränges
Powder Metallurgy. The increase was mainly driven by a a lower share of
coal in Gränges Americas’ electricity mix. Gränges Finspång sources
specified electricity from 100 per cent hydro power since 2020.
Reporting principles and definitions: Data is reported at regional level
and consolidated annually at group level using common definitions
and principles. Data for Gränges Powder Metallurgy is included in the
data for Gränges Eurasia. Numbers for 2019 and 2020 do not include
Gränges Konin and Gränges Powder Metallurgy.
Energy intensity is defined as total energy use [MWh] divided by the
total packed products [tonnes].
Renewable energy sources are defined as wind, solar, hydro, geothermal,
tidal and biomass. The share of renewable energy is calculated as
renewable energy sourced including recovered energy [MWh] divided by
the total energy used [MWh] using total energy use per source and the
supplier-specific mix for delivered electricity, district heating and
steam.
Regulations: Gränges adheres to applicable energy regulations in the
countries of operations; Gränges’ production site in Shanghai under
the Shanghai Energy Conservation Regulations and the sites in
Finspång and Konin under the Energy Efficiency Directive. Gränges’
sites in Americas do currently not have any energy related regulations
affecting its operations, but is required to control the consumption of
energy that produces certain emissions under e.g. the USEPA’s Clean
Air Act.
Policies: The governing policy is Gränges’ EHS Policy, which is reviewed
annually and applies to all employees working at Gränges. The produc-
tion sites in Finspång, Shanghai and Saint-Avold are certified in accord-
ance with the energy management standard ISO 50001, while the sites
in Americas and Konin are preparing for implementation.
Long-term target: Gränges’ 2025 target is that energy intensity is reduced
by 17 per cent versus baseline 2017, and that the share of renewable
energy (electricity, heat, steam, fuels) is at least 20 per cent compared
with baseline 2017.
127 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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>> 5 Emissions and climate impact
Comment: In 2021, total carbon emissions intensity (scope 1+2+3)
amounted to 9.3 tonnes CO
2
e/tonne. Excluding Gränges Konin and
Gränges Powder Metallurgy, the intensity was reduced by 4 per cent
to 10.0 tonnes CO
2
e/tonne (10.4) compared to 2020.
Carbon emissions intensity from own operations and purchased
energy (scope 1+2) was 0.88 tonnes CO
2
e/tonne in 2021. Excluding
Gränges Konin and Gränges Powder Metallurgy, the intensity was
reduced by 11 per cent to 0.73 (0.83) versus 2020 mainly driven by
more energy efficient production and a decrease in energy intensity
in Gränges Americas and Gränges Asia.
Carbon emissions intensity from sourced metal inputs (scope 3)
was 8.4 tonnes CO
2
e/tonne. Excluding Gränges Konin and Gränges
Powder Metallurgy, the intensity was reduced by 3 per cent to 9.3 (9.6).
The reduction was driven by a higher share of sourced aluminium
scrap replacing primary aluminium in Gränges Americas and Gränges
Finspång, and by increased sourcing of low-carbon primary alumin-
ium in Finspång. The scope 3 intensity increased slightly in Shanghai
because of lower volumes of low-carbon primary aluminium.
In 2021, total greenhouse gas emissions amounted to 4.600 ktonnes
CO
2
e, 4.660 ktonnes CO
2
e with location-based approach.
Emissions of particulate matter, nitrogen oxides and sulphur diox-
ide increased in all production facilities compared to 2020 due to
higher consumption of natural gas and liquified petroleum gas as a
direct result of the increased production 2021.
Reporting principles and definitions: Data is reported with a mar-
ket-based approach. Data is reported at regional level and consoli-
dated annually at group level using common definitions and princi-
ples. Data for Gränges Powder Metallurgy is included in the data for
Gränges Eurasia. Numbers for 2019 and 2020 do not include Gränges
Konin and Gränges Powder Metallurgy.
Greenhouse gas emissions are presented as carbon dioxide equiva-
lents. In accordance with the GHG Protocol, the definitions of the
respective scopes are the following.
Scope 1 is defined as direct emissions from Gränges’ operations,
which include production facilities, office buildings and company
owned vehicles. Emissions are calculated based on fuel consumption
and emission factors.
Scope 2 is defined as energy indirect emissions from the generation
of purchased electricity, heat and steam consumed by Gränges, in pro
-
duction facilities and office buildings. Emissions are calculated using
specific data from Gränges’ electricity, heat and steam suppliers.
Total emissions of greenhouse gases
Scope 1 Scope 2 Scope 3 Scope 1+2+3
ktonnes CO
2
e 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019
Gränges Eurasia 72.2 33.2 36.3 158.9 45.1 57.8 2,780 1,980 2,470 3,010 2,060 2,560
Finspång 11.9 9.1 10.6 0.5 0.3 0.4 410 340 500 420 350 510
Konin 33.3 – – 107.4 – – 430 – – 570 – –
Shanghai 2 7. 0 24.1 25.6 50.8 44.8 57.4 1,930 1,640 1,970 2,000 1,700 2,050
Gränges Americas 148.3 135.2 129.7 54.9 65.0 59.1 1,390 1,250 1,150 1,590 1,450 1,340
Gränges total 220.6 168.4 166.0 213.8 110.1 116.9 4,170 3,230 3,620 4,600 3,510 3,910
Carbon emissions intensity
Scope 1 Scope 2 Scope 3 Scope 1+2+3
Tonnes CO
2
e/tonne 2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019
Gränges Eurasia 0.27 0.23 0.21 0.59 0.32 0.34 10.4 14.0 14.6 11.2 14.6 15.1
Finspång 0 .1 4 0 .1 4 0 .1 3 0.01 0.01 0.00 4.9 5.4 6.1 5.0 5.5 6.2
Konin 0.36 – – 1.1 5 – – 4.6 – – 6 .1 – –
Shanghai 0.30 0.31 0.29 0.57 0.58 0.66 21.4 21.2 22.5 22.3 22.0 23.5
Gränges Americas 0.65 0.69 0.73 0.24 0.33 0.33 6.1 6.4 6.5 7. 0 7. 4 7. 6
Gränges total 0.45 0.50 0.48 0.43 0.33 0.34 8.4 9.6 10.5 9.3 10.4 11.3
Development vs baseline 2017, % 6 –19 –20 –19
Note: Development versus baseline 2017, recalculated to include Gränges Konin. Development between 2020 and 2019 versus baseline are not applicable due to comparability.
Emissions by category scope 3
ktonnes CO
2
e 2021 2020 2019
Purchased goods and services 4,020 3,120 3,520
Fuel and energy related activities 80 60 60
Transportation incl. business travel
70 50 50
Gränges total 4,170 3,230 3,620
Other emissions to air
Nitrogen oxides (NO
X
) Sulphur dioxide (SO
2
) Particulate matter (PM)
Tonnes 2021 2020 2019 2021 2020 2019 2021 2020 2019
Gränges Eurasia 46.2 31.0 33.5 5.5 2.5 2.6 4.5 3.1 3.4
Finspång 11.6 8.5 10.4 0.1 0.0 0.0 0.2 0 .1 0 .1
Konin 8.8 – – 2.8 – – 1.1 – –
Shanghai 25.3 22.6 23.1 2.7 2.4 2.5 3.3 3.0 3.3
Gränges Americas 112.9 102.5 98.4 0.7 0.6 0.6 8.7 7. 9 7. 6
Gränges total 159.0 133.6 131.8 6.2 3 .1 3.2 13.3 11.0 11.1
128 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Scope 3 is defined as other indirect emissions. These include emis-
sions from extraction, production and processing of main purchased
materials, fuel and energy related activities (not included in scope 1 or
scope 2), upstream and downstream goods transportation as well as
business travel. Fuel and energy related activities include production
of fuels used in Gränges’ operations and in generation of purchased
energy. Emissions from producing primary aluminium, purchased
slabs and aluminium scrap are based on regional industry averages or
supplier data. Emissions from producing fuels are based on regional
industry data and emissions from transportation and business travel
are based on specific data from Gränges’ transport routes.
Carbon emissions intensity is defined as total emissions of greenhouse
gases [tonnes CO
2
e] divided by the total packed products [tonnes].
Other emissions to air of particulate matter, nitrogen oxides, and sul-
phur dioxide are calculated either based on fuel consumption using
local emission factors or based on continual measurements. Emis-
sions of oil and VOC are not reported as methods and data collection
procedures are currently being harmonized across the organization.
Regulations: Gränges observes all applicable local and international
laws and regulations for environmental impact. Emission limits in
Europe are based on requirements from the Industry Emissions
Directive (IED). Gränges’ production site in Konin is included in EU
emissions trading system, EU ETS. Finspång is not included as the
site is below the threshold of rated thermal input. In Shanghai, emis-
sion limits are linked to Regulations of Shanghai Municipality on the
Prevention and Control of Atmospheric Pollution, and in the US the
National Ambient Air Quality Standards (NA AQS) provides the relevant
legal framework. Local authorities continually monitor compliance to
ensure that emissions are within limits. Emissions regulated by legis-
lation include nitrogen oxides, sulphur dioxide and particulate matter.
In some regions volatile organic compounds (VOC) and oil emissions
are also regulated.
Policies: The governing policy is Gränges’ EHS Policy, which is
reviewed annually and applies to all employees working at Gränges.
All production sites are certified in accordance with the environmental
management standard ISO 14001, where the Newport site achieved
certification in January 2022. Emissions are monitored and managed
as part of daily operations. Compliance is a prerequisite for Gränges’
continued license to operate.
Long-term target: Gränges’ 2025 target is that carbon emissions
intensity from own operations and purchased energy (scope 1+2) is
reduced by at least 25 per cent versus baseline 2017 and carbon emis-
sions intensity from sourced metal inputs (scope 3) is reduced by at
least 30 per cent versus the 2017 baseline.
>> CONT. NOTE 5
>> 6 Waste management
Comment: In 2021, Gränges included waste as a material topic in the
company’s sustainability framework as a result from stakeholder dia-
logues. Gränges aims to reduce waste in all operations with the ambi-
tion to recycle and reuse waste in production where possible. Waste
management is handled locally, and all sites have a local waste han-
dling procedure. All Gränges’ production sites are required to annually
report waste data to local authorities.
Reporting principles and definitions: Data on waste is not reported in
2021 as methods and data collection procedures need to be harmo-
nized across the organization. Starting from 2022, Gränges aims to
report on the total amount of waste, split by hazardous and non-
hazardous waste.
Regulations: Gränges adheres to applicable waste regulations in the
countries of operations; Gränges facility in Shanghai under the Law of
the People’s Republic of China on the Prevention and Control of Environ-
mental Pollution by Solid Waste (2020 Reversion), Gränges Konin under
the Environmental protection law, Gränges Americas under the USEPA’s
Solid Waste Disposal Act and ensuing amendments and Gränges’ site in
Finspång under Avfallsförordningen (2020:614).
Policies: The governing policy is the EHS policy, which is reviewed annu-
ally and applies to all employees working at Gränges. All sites have local
waste handling procedures.
Long-term target: Gränges has not yet set a long-term target for waste
management.
129 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
>> 7 Water management
Water withdrawal by region
Thousand m
3
2021 2020 2019
Gränges Eurasia 3,382 2,148 2,603
Finspång 2,798 2,000 2,444
Konin 413 – –
Shanghai 164 148 159
Gränges Americas 793 717 601
Grängest total 4,176 2,864 3,203
Comment: In 2021, the total water withdrawal was 4,176 m
3
. Excluding
Gränges Konin and Gränges Powder Metallurgy the withdrawal
increased by 31 per cent to 3,755 m
3
(2,864). The increase was primar-
ily due to higher production volumes in all facilities which led to an
increased need for cooling water. The water intensity ended at 8.5 m
3
/
tonne. Excluding Gränges Konin and Gränges Powder Metallurgy, the
water intensity increased by 10 per cent to 9,4 m
3
/tonne driven pri-
marily by Gränges Finspång. The site had a significantly higher pro-
duction volumes and water use compared to 2020. The largest impact
came from the re-melting plant which is the largest consumer of
water. At the end of 2021, Gränges had implemented local water man-
agement plans in three sites: Finspång, Shanghai and Newport. The
site in Newport was certified in accordance with Alliance for Water
Stewardship’s (AWS) International Waters Stewardship Standards
during the year.
Reporting principles and definitions: Data is reported at regional level
and consolidated annually at group level using common definitions
and principles. Data for Gränges Powder Metallurgy is included in the
data for Gränges Eurasia. Numbers for 2019 and 2020 do not include
Gränges Konin and Gränges Powder Metallurgy.
Water withdrawal is defined as water used in the production facility
withdrawn from wetlands, rivers, lakes, own wells, municipal water
suppliers or from other public or private water utilities [m
3
].
Water stress is defined as the ratio of total water withdrawals to avail-
able renewable surface and groundwater supplies. The definition is
based on Aqueduct Water Risk Atlas developed by World Resources
Institute, where the result for the indicator “Baseline water stress”
is high (40
–80 per cent) or extremely high (> 80 per cent) in the area.
Water intensity is defined as total water withdrawal [m
3
] divided by
the total packed products [tonnes].
Regulations: The water use and management for Gränges’ site in
Shanghai is regulated via permits and by legislation such as Water
Pollution Prevention and Control Law of the People’s Republic of
China, Water Law of the People’s Republic of China, and Management
in Shanghai Drainage Ordinance. Gränges Americas is regulated under
the USEPA’s Clean Water Act.
Policies: The governing policy is Gränges’ EHS Policy, which is
reviewed annually and applies to all employees working at Gränges.
Long-term target: Gränges’ 2025 target is that all sites have imple-
mented a local water management plan.
Water withdrawal, by source
2021 2020 2019
Thousand m
3
All areas
Areas with
water stress All areas
Areas with
water stress All areas
Areas with
water stress
Surface water (total) 2,783 – 1,986 – 2,427 –
Groundwater (total) 749 118 597 – 530 –
Third-party water (total) 640 459 281 148 245 159
– of which surface water 478 459 162 148 175 159
– of which ground water 162 – 119 – 70 –
Gränges total 4,176 577 2,864 148 3,203 159
Water intensity
m3/tonnes 2021 2020 2019
Gränges Eurasia 12.6 15.2 15.4
Finspång 33.5 31.3 29.8
Konin 6.6 – –
Shanghai 1.8 1.9 1.8
Gränges Americas 3.5 3.7 3.4
Grängest total 8.5 8.5 9.3
Note: All water withdrawal is categorized as freshwater ( 1,000 mg/L Total Dissolved Solids).
130 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
>> 8 Workplace safety
Recordable accidents
Number of recordable accidents 2021 2020 2019
Gränges Eurasia 22 10 9
Finspång 12 7 6
Konin 7 – –
Shanghai 3 3 3
Gränges Americas 13 10 8
Gränges total 35 20 17
Total Recordable Rate (TRR)
Number of recordable accidents per
million hours worked 2021 2020 2019
Gränges Eurasia 6.2 4.8 4 .1
Finspång 13.7 10,0 7. 4
Konin 5.5 – –
Shanghai 2.1 2.2 2.2
Gränges Americas 7. 3 6.3 4.8
Gränges total 6.5 5.5 4.4
Lost Workdays
Number of lost workdays 2021 2020 2019
Gränges Eurasia 639 295 188
Finspång 92 93 88
Konin 334 – –
Shanghai 213 202 100
Gränges Americas 107 102 360
Gränges total 746 397 548
Severity rate
Number of lost workdays per million
hours worked 2021 2020 2019
Gränges Eurasia 179 142 86
Finspång 105 132 108
Konin 261 – –
Shanghai 151 148 73
Gränges Americas 60 65 214
Gränges total 139 109 142
Comment: In 2021, Total Recordable Rate (TRR) was 6.5. Excluding
Gränges Konin, TRR increased to 6.9 (5.5) as a result of COVID-19 related
impacts in the production sites in Finspång and Salisbury. The facility in
Salisbury had to re-hire many new employees after it was closed for sev-
eral months in 2020 and the facility in Finspång was affected by restric-
tions to interact with operators, which had negative effects on safety sta-
tistics. In 2021, Severity Rate reached 139. Excluding Gränges Konin, the
rate was reduced by 7 per cent to 101 (109). During 2021, there were 35
recordable workplace accidents, of which 6 were defined as serious.
Reporting principles and definitions: All incidents and accidents are
registered and categorized in local incident reporting systems. Events
reported are tracked weekly and monthly. Data is reported at regional
level and consolidated monthly at group level using common definitions
and principles. Data includes contracted workers and is based on total
working hours 1 January–31 December. Data for employees covered by
OHS management systems and internal safety assessments is based on
headcount on 31 December. Data for Gränges Powder Metallurgy is not
included in 2021 figures. Numbers for 2019 and 2020 exclude Gränges
Konin and Gränges Powder Metallurgy.
Contracted worker is defined as individuals working on-site or off-site
on behalf of Gränges.
Recordable accident is defined as either a medical treatment case,
a restricted work case or a lost workday case.
Total Recordable Rate (TRR) is defined as total number of recordable
accidents per million hours worked.
Lost workday case is defined as an accident resulting in absence from
work.
Lost workdays are defined as the total number of workdays accumu-
lated by employees being absent from work due to work-related acci-
dents.
Severity Rate is defined as total number of lost workdays per million
hours worked.
Serious injury is defined as an irreversible injury such as an amputated
finger or lost eyesight, or a reversible injury causing prolonged periods
of pain or suffering for the employee, or an accident with an absence
longer than 15 days.
Policies: The governing policy is Gränges’ EHS Policy, which is
reviewed annually and applies to all employees and individuals who
are directly or indirectly related to Gränges’ operations, such as inde-
pendent contractors and consultants who work on behalf of Gränges.
Contracted workers are covered by all safety processes, and where appli-
cable in the efforts to identify and evaluate work related hazards and
risks. Moreover, contracted workers are covered by Gränges’ safety train-
ing, depending on the type of tasks.
OHS management systems: All Gränges’ production sites, covering
99 per cent of Gränges’ total employees in 2021, had an occupational
health and safety (OHS) management system in place, implemented in
line with applicable legislation. The OHS management system also cov-
ers contracted workers. In the Shanghai site, the OHS system is certi-
fied in accordance with ISO 45001, covering 19 per cent of all Gränges’
employees. The sites in Americas and Finspång have initiated pre-stud-
ies to implement OHS management systems in accordance with ISO
45001. The site in Konin is planning for certification in 2022.
Internal safety assessments: Gränges generally conducts cross
assessments every six months at the sites. Due to the COVID-19 situa-
tion, only one assessment was conducted in 2021 at the Konin site, cov-
ering in total 31 per cent of total employees. The site in Finspång was
assessed in 2020 and the remaining sites were assessed in 2018–2019.
Safety committees: Gränges has employee-managed safety commit-
tees at all plants which consult on the working environment and work
for increased safety. Issues addressed include occupational health
care, identifying and evaluating hazards, as well as follow-up of correc-
tive actions to eliminate risks. The efficiency of the committees is moni-
tored by the Supervisory safety committees, headed by the regional
Presidents. Contracted workers are not represented in the safety com-
mittees. In Gränges Americas’, each plant has an employee-managed
safety committee supported by local management. Input and questions
from contracted workers are captured in recurrent meetings. Monthly
safety meetings are held in each facility and in Newport the aim is to
meet twice a month starting in 2022. In Shanghai, safety committee
meetings are conducted quarterly, in Finspång two to four times per
year and in Gränges Konin meetings are held each month. Contracted
workers do not participate in the meetings but are treated in the same
way as Gränges’ employees when it comes to OHS.
Long-term target: Gränges’ 2025 target is that Total Recordable Rate
(TRR) is
≤3.0 recordable accidents per million hours worked and that
Severity Rate is
≤50 lost workdays per million hours worked.
131 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
>> 10 Career and leadership
Performance and development discussion
% 2021 2020 2019
Gränges Eurasia 52 100 100
Finspång 100 100 100
Konin 0 – –
Shanghai 100 100 100
Gränges Americas 100 100 100
Gränges total 67 100 100
Total training hours
Average hours of training 2021 2020 2019
Women 6.7 – –
Men 5.4 – –
White collar 6.6 – –
Blue collar 5.1 – –
Gränges total 5.5 – –
Comment: In 2021, 67 per cent of Gränges’ employees received a
performance and development discussion. Excluding Gränges
Konin and Gränges Powder Metallurgy, the performance was
100 per cent (100). Gränges Konin is in the process of implementing
a structured approach to conduct performance and development
discussions that will be in effect starting from 2022. During the
year, the average training hours was 5,5 hours per employee.
Reporting principles and definitions: Data is reported at a regional
level and consolidated annually at group level using common defini-
tions and principles. Data for Gränges AB and Gränges Powder Metal-
lurgy is included in the data for Gränges Eurasia. Numbers for 2019
and 2020 exclude Gränges Konin and Gränges Powder Metallurgy.
Data covers employees in duty adjusted for those who are long-term
absent as well as new employees who did not have a performance and
development discussion as they started their employment after the
period when the annual performance and development discussions
were conducted. Training data is based on average number of employ-
ees and the scope is limited to trainings conducted by or together with
an external party as well as the group-wide Code of Conduct, anti-
corruption and IT security trainings.
Policies: No group-wide policy available.
Long-term target: Gränges’ 2025 target is that 100 per cent of all employ-
ees annually have a performance and development discussion.
>> 9 Total employees
Total number of employees by category
Number of employees 2021 2020 2019
Blue collar 2,004 1,244 1,229
White collar 708 530 553
Gränges total 2,712 1,774 1,782
Contracted workers 108 116 104
Employment contract and type, by gender and region 2021
Region Gender
Number of employees
Gränges
Eurasia
Gränges
Americas Women Men
Permanent contract 1,794 808 330 2,272
Temporary contract 109 1 22 88
Gränges total 1,903 809 352 2,360
Number of employees Women Men
Full-time 347 2,355
Part-time 5 5
Gränges total 352 2,360
Comment: In 2021, the total number of employees was 2,712. Exclud-
ing Gränges Konin and Gränges Powder Metallurgy, the total number
of employees was 1,830 (1,774). The increase was mainly driven by a
high recruitment rate in Finspång and Gränges Americas due to
increased production. The total number of contracted workers was
108.
Reporting principles and definitions: Data is reported at a regional
level and consolidated annually at group level using common defini-
tions and principles. Data for Gränges AB and Gränges Powder Metal-
lurgy is included in the data for Gränges Eurasia. Numbers for 2019
and 2020 exclude Gränges Konin and Gränges Powder Metallurgy.
Data is based on headcount on 31 December.
Contracted worker is defined as individuals working on-site or off-site
on behalf of Gränges.
Permanent contract is defined as a contract for an indeterminate period.
Temporary contract is defined as a contract of limited duration.
Full-time employee is defined according to national legislation and
practice regarding working time, such as employees working a
minimum of nine months per year and 30 hours per week.
Part-time employee is defined as employees working less than a
full-time employee.
Policies: Not applicable as this is a general disclosure.
Long-term target: Not applicable as this is a general disclosure.
132 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Gender balance by region
Share of women
in total workforce, % 2021 2020 2019
Gränges Eurasia 13 17 15
Finspång 20 21 19
Konin 9 – –
Shanghai 11 12 12
Gränges Americas 13 13 12
Gränges total 13 15 14
Share of women among
senior management, % 2021 2020 2019
Gränges Eurasia 14 16 17
Finspång 0 0 0
Konin 0 – –
Shanghai 17 18 20
Gränges Americas 30 36 29
Gränges total 18 21 20
Gender balance and age structure
% Women Men
<30
years
30–50
years
>50
years
Board of Directors 43 57 0 0 100
Group Management 20 80 0 60 40
Senior Management 18 82 0 72 28
White-collar 30 70 8 65 27
Blue-collar 7 93 16 56 27
Gränges total 13 87 14 59 27
Comment: In 2021, the share of women in Gränges’ total workforce
was 13 per cent. Excluding Gränges Konin and Gränges Powder Metal-
lurgy, the share of women was 15 per cent (15). The share of women
among senior management was 18 per cent, or 21 per cent (21) exclud-
ing Gränges Konin and Gränges Powder Metallurgy. Gränges sees
clear challenges to improve the gender balance including a high turn-
over rate in some regions because of stronger employment markets,
operating in rural areas where it is difficult to find the right compe-
tence, as well as operating in countries where gender roles are tradi-
tional. With that said, Gränges works to improve the gender balance
both in the total workforce and among senior management.
Reporting principles and definitions: Data is reported at a regional
level and consolidated annually at group level using common defini-
tions and principles. Data for Gränges AB and Gränges Powder Metal-
lurgy is included in the data for Gränges Eurasia. Numbers for 2019
and 2020 exclude Gränges Konin and Gränges Powder Metallurgy.
Data is based on headcount on 31 December.
Senior management is defined as employees eligible to participate
in Gränges’ long-term incentive (LTI) programme.
Policies: The governing policy is the Diversity Policy, which is reviewed
annually and applies to all employees working at Gränges.
Long-term target: Gränges’ 2025 target is that at least 30 per cent
of senior management are women.
>> 12 Employee wellbeing
% 2021 2020 2019
Sick leave 3.7 2.0 1.6
Employee turnover 18.7 16.0 11.8
Employee engagement index – 78 –
Comment: In 2021, the total sick-leave was 3.7 per cent, with COVID-
19 still being a driving force for the increase in long-term sickness
cases. In 2021, the total employee turnover was 18.7 per cent. Exclud-
ing Gränges Konin and Gränges Powder Metallurgy, the employee
turnover was 22.6 per cent (16.0). One of the main reasons for the high
turnover rate was a stronger employment market compared to last
year. The high turnover rate could mainly be seen in Gränges Americas
where COVID-19 had a vast impact on the American worforce includ-
ing early retirements as well as a more competitve market to attract
and retain employees. By gender, employee turnover was 18.3 per
cent among men and 21.9 per cent among women and by category
21.4 per cent among blue-collar employees and 11.2 per cent among
white-collar employees. Since the employee survey is conducted
every second yearand not in 2021, there was no result for Employee
engagement index.
Reporting principles and definitions: Data is reported at a regional
level and consolidated annually at group level using common defini-
tions and principles. Data for Gränges AB and Gränges Powder Metal-
lurgy is included in the data for Gränges Eurasia. Numbers for 2019
and 2020 exclude Gränges Konin and Gränges Powder Metallurgy.
Data for sick-leave and employee turnover is based on average num-
ber of employees (expressed as present full-time positions). Data for
employee engagement comes from Gränges’ employee survey, which
is conducted every other year. Contracted workers are not included in
these key performance indicators.
Sick-leave is defined as all absent hours for sickness within a year
divided by total annual working hours (as applicable in local stand-
ards). Excludes permitted leave absences such as holidays, study and
parental leave.
Employee turnover is defined as number of employees who leave the
organization (voluntarily or due to dismissal, retirement, or death in
service) during the reporting period divided by the total average
number of employees converted to full-time positions.
Employee engagement index is a calculated mean from a number of
questions in Gränges’ employee survey related to energy and clarity,
two important dimensions of employee engagement. The mean is
converted to an index 0–100.
Policies: The governing policy is Gränges’ Code of Conduct which is
updated annually and applicable for all employees and board mem-
bers in entities owned by Gränges.
Long-term target: Gränges’ 2025 target is that Employee engagement
index should reach at least 85.
>> 11 Diversity and inclusion
133 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
Code of Conduct training
Share of employees trained in the
Code of Conduct, % 2021 2020 2019
Gränges Eurasia 100 100 100
Finspång 100 100 98
Konin 99 – –
Shanghai 100 100 100
Gränges Americas 100 100 100
Gränges total 100 100 99
Anti-corruption training
Share of white collar employees
trained in anti-corruption % 2021 2020 2019
Gränges Eurasia 100 100 100
Finspång 100 100 100
Konin 100 – –
Shanghai 100 100 100
Gränges Americas 100 100 100
Gränges total 100 100 100
Incidents of corruption
Total number 2021 2020 2019
Incidents of corruption 0 0 0
Incidents of terminated business
contracts due to corruption 0 0 0
>> 13 Ethics and anti-corruption
Comment: In 2021, Gränges continued to conduct its annual group-wide
Code of Conduct and anti-corruption trainings. All employees who had
access to computers conducted the group-wide e-learning Code of
Conduct training, whereas blue-collar employees in Gränges Americas
and Gränges Konin conducted classroom training or individual training,
depending on COVID-19 restrictions. Total training participation ended
at 100 per cent (100), also excluding Gränges Konin and Gränges Powder
Metallurgy. Gränges also conducted the annual anti-corruption
e-learning training which 100 per cent (100) of all white-collar employ-
ees conducted. No confirmed corruption incidents were detected dur-
ing 2021.
Reporting principles and definitions: Data for Code of Conduct and
anti-corruption training participation is collected and consolidated
annually via the e-learning system used for online training. Data for
Gränges AB and Gränges Powder Metallurgy is included in the data for
Gränges Eurasia. 2020 and 2019 numbers exclude Gränges Konin and
Gränges Powder Metallurgy. Data includes employees in duty and is
adjusted for long-term sick-leave, parental leave, resignations and
employees off duty for a longer period. The anti-corruption training
was conducted in October 2021 while the Code of Conduct training
was conducted October 2021 to January 2022, slightly delayed due to
COVID-19 restrictions.
Policies: The governing policy is Gränges’ Code of Conduct which is
updated annually and applicable for all employees and board mem-
bers in entities owned by Gränges. It also applies to independent con-
tractors and consultants or others acting on behalf of Gränges. Also,
Gränges’ Anti-Corruption Policy defines, explains, and expands on
what Gränges means by corruption.
Long-term target: Gränges’ 2025 target is that 100 per cent of all employ-
ees are annually trained in the Code of Conduct, and that 100 per cent of
all white-collar employees are annually trained in anti-corruption.
134 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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GRI content index
General disclosures
GRI Standard
Disclosure
number Disclosure title
UNGC
Principles Page reference Omissions
GRI 101: Foundation 2016
GRI 102: General disclosures 2016
ORGANIZATIONAL PROFILE
102-1 Name of the organization 53
102-2 Activities, brands, products, and services 5, 7, 21–22
102-3 Location of headquarters 6, 53
102-4 Location of operations 6, 53
102-5 Ownership and legal form 44–46, 55, 60
102-6 Markets served 6, 12–13
102-7 Scale of the organization 2, 6, 41–42
102-8 Information on employees and other workers 123, 131
102-9 Supply chain 1–10 9, 32, 35–37
102-10 Significant changes to the organization and its supply chain 35–37, 45–46, 94
102-11 Precautionary Principle or approach 7 50
102-12 External initiatives 120–121
102-13 Membership of associations 120
STRATEGY
102-14 Statement from senior decision-maker 3–4
102-15 Key impacts, risks, and opportunities 47–52
ETHICS AND INTEGRITY
102-16 Values, principles, standards, and norms of behaviour 41–43
102-17 Mechanisms for advice and concerns about ethics 43
GOVERNANCE
102-18 Governance structure 53–69, 118
STAKEHOLDER ENGAGEMENT
102-40 List of stakeholder groups 119
102-41 Collective bargaining agreements 3 123
102-42 Identifying and selecting stakeholders 119
102-43 Approach to stakeholder engagement 119
102-44 Key topics and concerns raised 119
135 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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GRI Standard
Disclosure
number Disclosure title
UNGC
Principles Page reference Omissions
REPORTING PRACTICE
102-45 Entities included in the consolidated financial statements 110
102-46 Defining report content and topic Boundaries 75, 119–120
102-47 List of material topics 120
102-48 Restatements of information 118
102-49 Changes in reporting 118, 120
102-50 Reporting period 118
102-51 Date of most recent report 118
102-52 Reporting cycle 118
102-53 Contact point for questions regarding the report 118
102-54 Claims of reporting in accordance with the GRI Standards 1118
102-55 GRI content index 134–137
102-56 External assurance 118
Material topics
GRI Standard
Disclosure
number Disclosure title
UNGC
Principles Page reference Omissions
Economic standards
ANTI-CORRUPTION 10
GRI 103: Management
Approach 2016
103-1 Explanation of the material topic and its Boundary 43, 120, 133
103-2 The management approach and its components 43, 133
103-3 Evaluation of the management approach 43, 133
GRI 205:
Anti-corruption 2016
205-2 Communication and training about anti-corruption policies
and procedures
43, 123, 133
205-3 Confirmed incidents of corruption and actions taken 43, 123, 133
Environmental standards
MATERIALS 7, 8, 9
GRI 103: Management
Approach 2016
103-1 Explanation of the material topic and its Boundary 35–37, 120, 125
103-2 The management approach and its components
35–37, 125
103-3 Evaluation of the management approach 35–37, 125
GRI 301: Materials 2016 301-1 Materials used by weight or volume 35–37, 125
301-2 Recycled input materials used 35–37, 123, 125
MATERIALS STEWARDSHIP 7, 8, 9
GRI 103: Management
Approach 2016
103-1 Explanation of the material topic and its Boundary 33–34, 120, 124
103-2 The management approach and its components 33–34, 124
103-3 Evaluation of the management approach 33–34, 124
Company specific:
Materials Stewardship
Own KPI Programs and progress relating to materials stewardship 33–34, 124
136 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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GRI Standard
Disclosure
number Disclosure title
UNGC
Principles Page reference Omissions
ENERGY 7, 8, 9
GRI 103: Management
Approach 2016
103-1 Explanation of the material topic and its Boundary 38, 120, 126
103-2 The management approach and its components 38, 126
103-3 Evaluation of the management approach 38, 126
GRI 302: Energy 2016 302-1 Energy consumption within the organization 38, 123, 126
302-3 Energy intensity 38, 123, 126
302-4 Reduction of energy consumption 38, 123, 126
WATER 7, 8
GRI 103: Management
Approach 2016
103-1 Explanation of the material topic and its Boundary 39, 120, 129
103-2 The management approach and its components 39, 129
103-3 Evaluation of the management approach 39, 129
GRI 303: Water and
effluents 2018
303-1 Interactions with water as a shared resource 39, 129
303-2 Management of water discharge-related impacts 39, 129
303-3 Water withdrawal 39, 129
EMISSIONS 7, 8, 9
GRI 103: Management
Approach 2016
103-1 Explanation of the material topic and its Boundary 31–32, 120, 127–128
103-2 The management approach and its components 31–32, 127–128
103-3 Evaluation of the management approach 31–32, 127–128
GRI 305: Emissions
2016
305-1 Direct (scope 1) GHG emissions 31-32, 123, 127–128
305-2 Energy indirect (scope 2) GHG emissions 31-32, 123, 127–128
305-3 Other indirect (scope 3) GHG emissions 31-32, 123, 127–128
305-4 GHG emissions intensity 31-32, 123, 127–128
305-5 GHG emissions reductions 31-32, 123, 127–128
305-7 Nitrogen oxides (NO
X
), sulphur oxides (SO
X
), and other
significant air emissions
127–128 Emissions of oil and VOC
are not reported due to dif-
ferences in measurement
methods between Gränges’
production facilities, which
currently do not give compa-
rable results. The methods
are governed by local envi-
ronmental permits.
WASTE 12
GRI 306: Waste 103-1 Explanation of the material topic and its Boundaries 39, 128
103-2 The management approach and its components 39, 128
103-3 Evaluation of the management approach 39, 128
SUPPLIER ENVIRONMENTAL ASSESSMENT 7, 8, 9
GRI 103: Management
Approach 2016
103-1 Explanation of the material topic and its Boundary 35–37, 120, 124–125
103-2 The management approach and its components 35–37, 124–125
103-3 Evaluation of the management approach 35–37, 124–125
GRI 308: Supplier
Environmental
Assessment 2016
308-1 New suppliers that were screened using environmental criteria 124–125
137 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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GRI Standard
Disclosure
number Disclosure title
UNGC
Principles Page reference Omissions
Social standards
OCCUPATIONAL HEALTH AND SAFETY
GRI 103: Management
Approach 2016
103-1 Explanation of the material topic and its Boundary 40, 120, 130, 132
103-2 The management approach and its components 40, 130, 132
103-3 Evaluation of the management approach 40, 130, 132
GRI 403: Occupational
Health and Safety 2018
403-1 Occupational health and safety management system 130
403-2 Hazard identification, risk assessment, incident investigation 40, 130
403-3 Occupational health services 42
403-4 Worker participation, consultation, and communication on
occupational health and safety
40, 130
403-5 Worker training on occupational health and safety 40
403-6 Promotion of worker health 42
403-7 Prevention and mitigation of occupational health and safety
impacts directly linked by business relationships
35
403-8 Workers covered by an occupational health and safety
management system
130
403-9 Work-related injuries 40, 123, 130
TRAINING AND EDUCATION
GRI 103: Management
Approach 2016
103-1 Explanation of the material topic and its Boundary 41–42, 120, 131
103-2 The management approach and its components 41–42, 131
103-3 Evaluation of the management approach 41–42, 131
GRI 404: Training and
Education 2016
404-3 Percentage of employees receiving regular performance and
career development reviews 41, 123, 131
DIVERSITY AND EQUAL OPPORTUNITY 1, 2, 6
GRI 103: Management
Approach 2016
103-1 Explanation of the material topic and its Boundary 41–42, 120, 132
103-2 The management approach and its components 41–42, 132
103-3 Evaluation of the management approach 41–42, 132
GRI 405: Diversity and
Equal Opportunity 2016
405-1 Diversity of governance bodies and employees 41–42, 123, 132
SUPPLIER SOCIAL ASSESSMENT 1, 2, 3, 4, 5, 6
GRI 103: Management
Approach 2016
103-1 Explanation of the material topic and its Boundary 35–37, 120, 124–125
103-2 The management approach and its components 35–37, 124–125
103-3 Evaluation of the management approach 35–37, 124–125
GRI 414: Supplier Social
Assessment 2016
414-1 New suppliers that were screened using social criteria 124–125
138 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Auditor’s report on the statutory sustainability statement
To the general meeting of the shareholders of Gränges AB, corporate identity number 556001-6122
Engagement and responsibility
It is the Board of Directors who is responsible for the statutory sus-
tainability statement for the year 2021, as defined in the Board of
Directors report on page 55, and that it has been prepared in accor-
dance with the Annual Accounts Act.
The scope of the audit
Our examination has been conducted in accordance with FAR’s audit-
ing standard RevR 12 The auditor’s opinion regarding the statutory
sustainability statement. This means that our examination of the
corporate governance statement is different and substantially less
in scope than an audit conducted in accordance with International
Standards on Auditing and generally accepted auditing standards
in Sweden. We believe that the examination has provided us with
sufficient basis for our opinions.
Opinions
A statutory sustainability statement has been prepared.
Stockholm, 16 March 2022
Ernst & Young AB
Andreas Troberg
Authorized Public Accountant
Human rights
Principle 1: Businesses should support and respect the protection
of internationally proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights
abuses.
Labour
Principle 3: Businesses should uphold the freedom of association
and the effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory
labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment
and occupation.
The ten principles of the UN global compact
Environment
Principle 7: Businesses should support a precautionary approach
to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental
responsibility; and
Principle 9: encourage the development and diffusion of environ-
mentally friendly technologies.
Anti-corruption
Principle 10: Businesses should work against corruption in all its
forms, including extortion and bribery.
139 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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To Gränges AB, corporate identity number 55556001-6122
Introduction
We have been engaged by the Board of Directors of Gränges AB
(Gränges) to undertake a limited assurance engagement on below
specified information, presented on page 122 in Gränges’ sustainabil-
ity report for the year 2021.
• 2021 outcome for total carbon emissions intensity from own opera-
tions and purchased energy (scope 1+2), tonnes CO
2
e/tonne (GRI
disclosure 305-4 GHG emissions intensity)
• 2021 outcome for total carbon emissions intensity from sourced
metal inputs (scope 3), tonnes CO
2
e/tonne (GRI disclosure 305-4
GHG emissions intensity)
• 2021 outcome for the share of recycled aluminium of total sourced
metal inputs, % (GRI disclosure 301-2 Recycled input materials
used)
Responsibilities of the Board of Directors and the Executive
Management for the Sustainability Report
The Board of Directors and the Executive Management are responsi-
ble for the preparation of the Sustainability Report in accordance with
the applicable criteria for the above specified information, as explained
on the pages 125 and 127, and are the parts of the Sustainability
Reporting Guidelines published by GRI (Global Reporting Initiative)
that are applicable to the Sustainability Report, as well as the
accounting and calculation principles that the Company has devel-
oped. This responsibility also includes the internal control relevant to
the preparation of a Sustainability Report that is free from material
misstatements, whether due to fraud or error.
Responsibilities of the Auditor
Our responsibility is to express a conclusion on the above specified
information based on the limited assurance procedures we have per-
formed. The selection of information to be reviewed has been made by
the management of Gränges. Our review is limited to the above speci-
fied information in this document and does not include future oriented
information.
We conducted our limited assurance engagement in accordance
with ISAE 3000 Assurance engagements other than audits or reviews
of historical financial information. A limited assurance engagement
consists of making inquiries, primarily of persons responsible for the
preparation of the Sustainability Report, and applying analytical and
other limited assurance procedures. The procedures performed in a
limited assurance engagement vary in nature from, and are less in
scope than for, a reasonable assurance engagement conducted in
accordance with IAASB’s Standards on Auditing and other generally
accepted auditing standards.
The firm applies ISQC 1 (International Standard on Quality Control)
and accordingly maintains a comprehensive system of quality control
including documented policies and procedures regarding compliance
with ethical requirements, professional standards and applicable
legal and regulatory requirements. We are independent of Gränges in
accordance with professional ethics for accountants in Sweden and
have otherwise fulfilled our ethical responsibilities in accordance with
these requirements.
The procedures performed, consequently, do not enable us to
obtain assurance that we would become aware of all significant mat-
ters that might be identified in a reasonable assurance engagement.
Accordingly, we do not express a reasonable assurance conclusion.
Our procedures are based on the criteria defined by the Board of
Directors and the Executive Management as described above. We con-
sider these criteria suitable for the preparation of the Sustainability
Report. We believe that the evidence we have obtained is sufficient
and appropriate to provide a basis for our conclusion below.
Conclusion
Based on the limited assurance procedures we have performed, noth-
ing has come to our attention that causes us to believe that the above
specified information is not prepared, in all material respects, in
accordance with the criteria defined by the Board of Directors and
Executive Management.
Stockholm, 16 March 2022
Ernst & Young AB
Andreas Troberg
Authorized Public Accountant
Outi Alestalo
Specialist member of FAR
Auditor’s Limited Assurance Report on Gränges AB’s sustainability
performance targets 2021
Glossary
Additive Manufacturing powder
Powder for use as feedstock material in additive
manufacturing (also known as 3D printing).
Alloy
Material composed of one metal with additions
of other metals and/or elements.
Aluminium ingot
A small block of aluminium, typically used as
input material for re-melting.
Aluminium strip
Rolled aluminium in coil form.
Annealing
Heat treatment to partially or fully remove work
hardening in the material after cold rolling.
Brazing
Joining of metals through melting and
solidifi cation of a braze metal.
Casting
Method to convert molten metal to a desired
solid form.
Cathode foil
Thin flat rolled aluminium product for cathode
current collector in lithium-ion batteries.
Cladding
A layer of metal or alloy bonded to a dissimilar
metal or alloy.
DISPAL
®
A range of high-performance spray formed
aluminium materials.
Electric vehicles
Vehicles that are powered entirely or partly by
electricity. They are often divided into Battery
Electric Vehicles and Hybrid Electric Vehicles,
and in some cases Plug-in Hybrid Electric
Vehicles.
Flux
A substance used to disrupt surface oxides to
enable brazing.
Foil
A flat rolled product with a thickness less than
0.2 mm.
Gas atomization
Process where liquid metal is converted to metal
powder by a high-velocity gas.
Heat exchanger
A device for transforming heat from one medium
to another.
HVAC
Abbreviation for Heating, Ventilation and Air
Conditioning system including heat exchangers.
Rolled aluminium
Aluminium that has been hot and/or cold rolled
to desired gauge.
Slab
Input material to the rolling process that is
produced by casting.
Spray forming
Deposition of atomized semi solid droplets on to
a substrate.
TRILLIUM
®
A reactive malleable metal matrix composite
material that can be used to produce aluminium
brazed joints without the need for adding a
fluxing agent.
140 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Gränges 125 years
Gränges is an old and well-established company name. In
2021, it was 125 years since Gränges was founded. In fact,
Gränges still has the same corporate identity number as
when it was founded in 1896. When the company was formed,
it had its roots in railways and mines, but Gränges’ history is
a story of constant development and transformation based on
society’s changing needs.
During its long history, Gränges has been associated with
railways, mining, shipping operations, ore exports, car safety
– and not least aluminium. These are just some of the areas in
which the company has been involved over the 125 years since
it was founded.
At the beginning of the twentieth century, Gränges was
Stockholm Stock Exchange’s highest valued company, in the
middle of the century it was the world’s largest ore supplier
and towards the end of the century it was a subsidiary of the
Electrolux Group. Today, Gränges is an aluminium technology
company that drives the development of lighter, smarter and
more sustainable aluminium products and solutions. Gränges’
technology and business model is rooted in, and benefits from,
the Swedish tradition of sustainability and long-term thinking.
The company’s story is not about looking back – it is about
looking ahead. It has been, ever since 1896.
It has not been a straight path. It has been ups and downs,
mistakes and mishaps. There are also many examples of how
diculties breed creativity. Gränges has always changed
based on the demands of the times and market conditions.
The company’s history also reflects a changing world and
Sweden’s modern development.
The common factors throughout the years have been adap-
tation and innovation; to adapt the business to new condi-
tions and to constantly create new innovations that drive
development further. These two abilities are just as decisive
and relevant to Gränges’ business today as they were 125
years ago.
>> A YOUNG COMPANY WITH A LONG HISTORY
Gränges’ history is described in the book “Gränges – since 1896”, which is written by the business
journalist and corporate historian Ronald Fageräll and published by Förlaget Näringslivshistoria.
The anniversary book was part of the 125
th
anniversary celebration of Gränges in 2021.
A few words with the author of the anniversary book
The journalist and author Ronald Fageräll describes
Gränges from its creation in pre-industrial Sweden to its
position in today’s global market. As a business reporter,
he has followed the company throughout his career and
could use his own interviews from over 50 years with the
company’s leaders and employees.
What are your reflections of the big picture when
it comes to Gränges’ history?
Gränges is a much larger part of the history of Sweden
than almost all historical descriptions tell. Would Sweden
have been outside the wars without Gränges, for
example? What would northern Sweden have been with-
out the LKAB activities? In the history of the Swedish
stock exchange, during the years 1907–1956, Gränges
was the highest valued company. And of the export giants
that were created between 1947 and the industrial crisis
in 1977, Erland Waldenström’s Gränges was the sound-
est. The fact that Gränges became a cutting object was
Author and journalist Ronald Fagerfjäll.
due to a Swedish cost crisis when international competi-
tion intensified. The Swedish system was simply too rigid
aer a long period of success. And today’s Gränges is
actually a fairly typical example of how a part of a busi-
ness can start a new cycle of growth.
What will be the lessons for the person reading the book?
Companies work in an environment that is constantly
evolving and changing. It’s like trying to stand still or
advance on an escalator moving towards you. The com-
pany has to walk to stand still and run to move at all. This
is almost impossible to cope with if you do not always
have demanding customers and tough competitors who
push you. The most dangerous are periods when custom-
ers sell everything that comes out quite unpretentiously,
such as 1946–1974. The company doctor Ulf af Trolle put
it something like this in the early 1970s. “You cannot
save a company that is doing well!” On the other hand,
companies that have to work hard with all new require-
ments keep the flexibility.
>> “GRÄNGES – SINCE 1896”
141 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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The foundation of today’s Gränges was laid in 1896 in Grängesberg, Sweden. Thereaer, several dierent industrial
enterprises became part of the Group, including Grängesberg mines, Oxelösund ironworks and Svenska metallverken.
Manufacturing of aluminium products started in 1922 at the facility in Finspång.
>> HIGHLIGHTS AND IMPORTANT MILESTONES THAT HAVE LED TO THE
CREATION OF THE MODERN GRÄNGES OF TODAY
Important milestones in Gränges’ history
1896 The industrial Group is formed in
Grängesberg.
1922 Manufacturing of aluminium prod-
ucts begins at the facility in Finspång.
1969 The Group acquires Svenska
Metallverken, which, among other things,
manufactures aluminium products. These
operations will subsequently become
Gränges.
1972 Production of materials for brazed
aluminium heat exchangers starts in
Finspång.
1980 Electrolux acquires Gränges.
1996 Gränges establishes a production
plant in Shanghai.
1997 Electrolux sells Gränges.
1997 Gränges is listed on the stock
exchange in Stockholm.
2000 Gränges changes name to Sapa.
2005 Orkla acquires Sapa (Gränges)
through a public bid and delists the
company. At that time Sapa has two lines
of business: rolled aluminium products
and extruded aluminium profiles.
2013 Gränges becomes a stand-alone
company and takes back its old name.
2014 The new Gränges is listed on Nasdaq
Stockholm Stock Exchange.
2016 Gränges acquires Noranda’s rolled
aluminium operations in the United States
and the name of the acquired business is
changed to Gränges Americas.
2020 Gränges acquires the remaining
shares in Getek GmbH and the name of the
acquired company is changed to Gränges
Powder Metallurgy.
2020 Gränges acquires the Polish flat
rolled aluminium producer Aluminium
Konin, and the name of the acquired
company is changed to Gränges Konin.
>>
>>
>>
142 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Annual General Meeting 2022
Gränges’ 2022 Annual General Meeting will be held on Wednesday
4 May 2022 at 16:00 CEST at IVA Conference Centre (Wallenberg-
salen), Grev Turegatan 16, Stockholm.
Participation
Shareholders wishing to attend the Annual General Meeting must
be registered as shareholders in the share register maintained by
Euroclear Sweden AB as of Tuesday 26 April 2022, and have
notified the company of their intention to attend no later than
Thursday 28 April 2022.
Registration of participation must be provided in writing to
Gränges AB, Juridik, Box 5505, 114 85 Stockholm, Sweden. When
registering, shareholders must state their name, personal ID or
company registration number, address and daytime telephone
number and representatives. The information provided is only
used for Gränges’ Annual General Meeting. More information
about registration can be found in the notice convening the Annual
General Meeting, which is expected to be published around Friday
25 March 2022.
Nominee-registered shares
Shareholders whose shares are registered with a nominee must,
to have the right to attend the Annual General Meeting, have their
shares temporarily reregistered with Euroclear Sweden AB on
Friday 29 April 2022 at the latest and the nominee should there-
fore be notified in good time before the date mentioned.
Notice convening the Annual General Meeting
Gränges’ notice convening the Annual General Meeting 2022 is
expected to be published around Friday 25 March 2022 by a press
release and the notice will be published on the company’s website
as well as in Post- och Inrikes tidningar (The Official Swedish
Gazette).
All documents according to the Swedish Companies Act will
be available at the company’s head office and on the website,
www.granges.com, no later than Wednesday 13 April 2022 and
will be sent immediately and free of charge for the recipient to
the shareholders who request it and state their postal address.
Printed information can be ordered via reports@granges.com.
The Annual General Meeting shareholder register will be available
at the company’s head office at Linnégatan 18 in Stockholm. All
documents, including the Annual General Meeting shareholder
register, are presented by keeping them available in this way.
Dividend
The Board of Directors proposes a dividend of SEK 2.25 (1.10) per
share for the 2021 fiscal year, in total SEK 239 million (117).
Proposal for record date for the dividend will be announced in
connection with the notice convening the Annual General
Meeting. At the same time proposal for date for distribution of the
dividend, provided that the Annual General Meeting approves the
proposal, will also be announced. The payment will be distributed
through Euroclear Sweden AB.
For further information, please contact:
Niclas Nelson
General Counsel
niclas.nelson@granges.com
Tel: +46 8 459 59 00
>> ANNUAL AND SUSTAINABILITY REPORT
Gränges’ Annual and Sustainability Report is available on
the company’s website, www.granges.com, in Swedish
and English. The Annual and Sustainability Report is also
available in printed format and can be ordered at:
reports@granges.com.
>> FINANCIAL CALENDAR 2022
Interim report, January–March 2022 21 Apr 2022
Annual General Meeting 2022 4 May 2022
Half-year report, January–June 2022 15 July 2022
Interim report, January–September 2022 20 Oct 2022
143 GRÄNGES ANNUAL AND SUSTAINABILITY REPORT 2021
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Concept and production: Solberg in cooperation with Gränges.
Photographers: Dan Coleman, Superstudio, Fredrik Schlyter, Taylor Johnson, Volvo Cars, the Railway Museum, Gränges among others.
Print: Göteborgstryckeriet.
SUSTAINABILITYABOUT GRÄNGES RISKTHE SHARE BOARD OF DIRECTORS REPORT CORPORATE GOVERNANCE REPORT FINANCIAL STATEMENTS SUSTAINABILITY NOTES
HEAD OFFICE
Gränges AB
Box 5505
SE-114 85 Stockholm
Sweden
Phone: +46 8 459 59 00
VISITING ADDRESS
Linnégatan 18
SE-114 47 Stockholm
Sweden
www.granges.com
Corp. identity no. 556001-6122
GRÄNGES EUROPE
Box 5505
SE-114 85 Stockholm
Sweden
Phone: +46 122 838 00
VISITING ADDRESS
Linnégatan 18
SE-114 47 Stockholm
Sweden
GRÄNGES ASIA
Gränges Aluminium
(Shanghai) Co., Ltd
1111 Jiatang Highway
201807 Shanghai
China
Phone: +86 215 954 1111
GRÄNGES AMERICAS
Gränges Americas Inc.
501 Corporate Centre Drive,
Suite 280
Franklin, Tennessee 37067
USA
Phone: +1 615 778 2000
Addresses