Ctt Systems Ab · OMXSTO:CTT

Ctt Systems Ab — Q4 2020 Earnings Presentation

29 slides from Ctt Systems Ab's earnings presentation, Feb 9, 2021

1. Slide 1: Earnings Call Q4 2020

   February 9, 2021 EARNINGS CALL Q4 2020

2. Slide 2: Torbjörn Johansson CEO, Daniel Ekstrand CFO

   TORBJÖRN JOHANSSON DANIEL EKSTRAND CEO CFO 2

3. Slide 3: Q4 2020

   Q4 2020 A 3

4. Slide 4: Q4 2020 Highlights

   Q4 2020 Highlights Net Sales touching lower end of forecast – Aftermarket sales higher but still below underlying demand  Net Sales 35 MSEK (84) vs Forecast 35 - 45 MSEK   Aftermarket sales in Q4 increased but still below underlying demand (for the third quarter in a row)  Successful development

5. Slide 5: Q4 2020 Financials in short

   Q4 2020 Financials in short Sales more than halved - USD loan compensate for negative currency impact on AR/AP  Net Sales of 35 MSEK (84), down 58 % versus previous year Net Sales (MSEK)  EBIT -1 MSEK (24) - EBIT Margin -2 % (29) 100  EBIT Margin adjusted for AR/AP currency effect 6 % (31) 84  E

6. Slide 6: Q4 2020 Sales Mix

   Q4 2020 Sales Mix Healthy mix except retrofit – VIP strong – OEM in Q419 includes ZD787 deliveries Q419 Q419 Q420 Q420 Non-Core; 4% Non-Core; 7% Aftermarket; 39% OEM; 35% OEM; 54% Aftermarket; 40% VIP; 1% Retrofit; 2% Retrofit; 0% VIP; 18% 6

7. Slide 7: Q4 2020 Net Sales Bridge, YoY

   Q4 2020 Net Sales Bridge, YoY  Adj. Organic growth -54 %  Adj. FX Effect -4 % -58 % Net Sales growth (-54 % adj.) OEM sales is down 33 MSEK or 73 % compared to Q419:  Ceased ZD787 deliveries account for approx. 12 MSEK  The Covid-effect is 21 MSEK or down 63 %  Aftermarket sales plunged 18 MSEK

8. Slide 8: Q4 2020 EBIT Profit Bridge

   Q4 2020 EBIT Profit Bridge  Currency (USD/SEK) headwind lowered EBIT 6 MSEK – Negative effect on sales in SEK (i.e. GM) and valuation of AR/AP (accounts receivables/payables)  Business related decrease of totally -25 MSEK – explained by lower volumes  Cost savings of 6 MSEK Operational Performanc

9. Slide 9: Q4 2020 Free Cash Flow

   Q4 2020 Free Cash Flow  Lower sales / EBITDA main explanation for weaker cash flow Change in Cash  Cash intensive VIP projects with invoicing late in project  Refund of preliminary tax payments made in Q1-Q3 increased cash flow  Investments in development projects – Entering the Business Jet mar

10. Slide 10: Q4 2020 Order Intake & Backlog

    Q4 2020 Order Intake & Backlog  Order intake increases from a low level MSEK Q419 Q420  Backlog shrinking to 31 MSEK (118) due  to low order intake Order intake 30 21  Shorter lead-time from order to delivery compared to historical Backlog 100 31 USD/SEK 9,32 8,19 MSEK 180 160 140 120 100 80 60

11. Slide 11: Full Year 2020

    FULL YEAR 2020 A 11

12. Slide 12: FY 2020 Financials in short

    FY 2020 Financials in short  Net Sales of 201 MSEK (355), down 43 % versus previous year Net Sales (MSEK)  Operating Profit (EBIT) of 38 MSEK (120) 400  EBIT Margin 19 % (34) 300 355 -43 %  EPS 2.48 SEK (7.39) 200  Operational Cash Flow of -11 MSEK (109) 100 201 0 Acc2019 Q419 Acc2020 Q420 EBIT

13. Slide 13: FY 2020 Net Sales Bridge

    FY 2020 Net Sales Bridge  Adj. Organic growth -43 %  Adj. FX Effect -0 % -43 % Net Sales growth  OEM revenues adjusted for ZD787 deliveries in 2019 is down 28 % or 32 MSEK  Aftermarket sales down 51 % or 75 MSEK 201  VIP projects unaffected by Covid-19 – increased 115 % or 17 MSEK 2019 2020 13

14. Slide 14: FY 2020 Sales Mix

    FY 2020 Sales Mix VIP remains strong in an overall negative Covid-19 environment – Three quarters under Covid conditions – Strong Q1 aftermarket 2019 ACC Q419 2020 ACC Q420 Non-Core; 5% Non-Core; 4% Aftermarket; OEM; 47% Aftermarket; OEM; 42% 41% 36% <<4% Retrofit; 3% VIP; < Retrofit; 2% VIP; 16% 14

15. Slide 15: FY 2020 Free Cash Flow

    FY 2020 Free Cash Flow  Significant decline in sales – EBITDA 45 MSEK (126) - down 81 MSEK versus 2019  One time tax payment for FY2018 and FY2019 of 23 MSEK. Adjusted Cash Flow 12 MSEK (109)  Investments in development projects and new machines increased CapEx during 2020 - Cash intensive VIP pr

16. Slide 16: FY 2020 Proposed Dividend

    FY 2020 Proposed Dividend  Proposed dividend: 1.74 SEK / share (4.05) – 70 % of EPS  Total dividend 21.8 MSEK (50.7) Strong financial position: Cash & available credit facilities: 104 MSEK Solidity: 72 % 8 SEK 7,39 8 Net debt: 15 MSEK SEK 7 7 6 5,56 6 5 5 3,79 4 4 70 % of EPS 3,00 4,05 4,05 3 2,48

17. Slide 17: Outlook

    OUTLOOK A 17

18. Slide 18: Aviation struggle to recover from worst year in history

    Aviation struggle to recover from worst year in history The darkest hour is just before the dawn – Challenging start for 2021 The RPK rebound has been  December figures confirm that the recovery in air travel has been stagnating. impacted by a sharp spike in COVID-  Passenger demand (RPKs) fell by

19. Slide 19: Installed base early in the recovery

    Installed base early in the recovery Strong active fleet recovery for A350 and Boeing 787 – >90 % in-service compared to a year ago  Active fleet is rebounding from its low – Boeing 787 And A350 total active fleet is >90 % compared to a year ago  Total fleet of delivered aircraft increases with de

20. Slide 20: Q1 2021 Forecast

    Q1 2021 Forecast Aftermarket sales expected to increase and OEM to be halved Net Sales (MSEK) 90  Net Sales forecasted to be 30 - 35 MSEK (77) 80 70  Aftermarket sales forecasted to increase driven by better consumable 60 sales; primarily driven by low deliveries in Q420 – recovery in 50 40 underl

21. Slide 21: Market Drivers

    Market Drivers New drivers triggered by Covid-19 Environment HUMIDIFIER MARKET DE-HUMIDIFIER MARKET  COMFORT > WELLBEING  COST SAVINGS > OPEX > FUEL >  INFLIGHT AIR QUALITY  SUSTAINABILITY > CO2  WELLNESS > CONFIDENCE TO TRAVEL > SAFETY  STAKEHOLDER REQUIREMENT > BAIL-OUT 21

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24. Slide 24: Aftermarket sales to rebound from its lows

    Aftermarket sales to rebound from its lows Aftermarket sales to increase – Deliveries to match underlying demand – More flight hours 1. Gap to close between actual sales and underlying demand (less inventory downsizing at airlines / distributors) – starting in Q1 2. Total flight hours to increase fr

25. Slide 25: OEM sales weak in H1 – Rebound in H2 but far from pre-Covid

    OEM sales weak in H1 – Rebound in H2 but far from pre-Covid Boeing cutting 787-production rate to 5 per month in Q121 and delaying 777X – Inventory downsizing in A350 supply chain  Boeing 787: lowered production rate to 5 per month (6) in Q1 2021  Boeing 787: First opportunity to raise 787 product

26. Slide 26: Retrofit business in 2021 - difficult but possible

    Retrofit business in 2021 - difficult but possible Airline discussions with focus on air quality and wellness as well as green tech to reduce carbon footprint drive retrofit opportunities  Airline interest in cabin air quality / humidity / wellness - some RFQ’s for premium cabin humidification syst

27. Slide 27: Private jet opportunities to emerge in 2021

    Private jet opportunities to emerge in 2021 Airbus leads-the-way with ACJ320 and its new business jet  VIP pipeline improved in Q4 – some RFQ’s  Several projects and opportunities to emerge in 2021  Airbus and CTT develop next generation  CTT develops world’s first  Airbus launched its first bu

28. Slide 28: Projects for future growth – Power to invest; Q&A

    Projects for future growth – Power to invest Q&A 28

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CTT Systems — Q4 2020 Earnings Presentation on 6ix