Slide 1: Nilfisk Q3 Interim Report 2018
Nilfisk Q3 Interim Report 2018 Webcast presentation November 14, 2018
Slide 2: Agenda
Agenda 1 Highlights 2 Business unit update 3 Simplifications initiatives 4 Financials 5 Outlook 2018 6 Q&A 2 Nilfisk | Q3 Interim Report 2018 | Webcast
Slide 3: Q3 2018 results: Financial highlights
Q3 2018 results Financial highlights • Q3 organic growth of 2.6%, YTD 3.3% • With 4.5%, we saw the strongest quarterly organic growth so far this year in the professional business (excluding private label), driven by EMEA • Gross margin of 40.9%, below expectations • Improved operating performance*)
Slide 4: Agenda
Agenda 1 Highlights 2 Business unit update 3 Simplifications initiatives 4 Financials 5 Outlook 2018 6 Q&A 4 Nilfisk | Q3 Interim Report 2018 | Webcast
Slide 5: EMEA: Strong growth in branded business
EMEA: Strong growth in branded business Comments • Organic growth in Q3 of 3.9%, with branded professional business delivering 8.2% organic growth • Double-digit growth in several regions: France driven by high demand from institutions, industrial customers and high service activity and Germany due
Slide 6: AMERICAS: Unsatisfactory growth
AMERICAS: Unsatisfactory growth Comments • Flat organic growth in Q3 in Americas is below expectations • US is flat and below our expectations due to: – delay of revenue within strategic accounts – industrial production output increased, but continuing long lead times has in some cases resulted in c
Slide 7: APAC: Positive momentum during period of change
APAC: Positive momentum during period of change Comments • Organic growth in Q3 of 2.0% • China posted double-digit growth again in Q3 with increased sales to contract cleaners and mid-market. • Thailand recovered from two difficult quarters and delivered double-digit organic growth in Q3 • Growth p
Slide 8: Specialty Professional: Strong growth in the continuing business
Specialty Professional: Strong growth in the continuing business Comments • Organic growth in Q3 of 5.7% • The continuing specialty professional business continued strongly with 9.6% organic growth • Outdoor and the restoration business both delivered negative growth in Q3 • Strategic review of Outd
Slide 9: Specialty Consumer: Growth affected by production closure
Specialty Consumer: Growth affected by production closure Comments • Focus continues on maintaining topline and improve profitability • Organic growth in Q3 of -1.4% • Earlier-than-expected closure of production in Suzhou, China, negatively impacted the delivery situation in Q3 and is also expected
Slide 10: Agenda
Agenda 1 Highlights 2 Business unit update 3 Simplifications initiatives 4 Financials 5 Outlook 2018 6 Q&A 10 Nilfisk | Q3 Interim Report 2018 | Webcast
Slide 11: Simplification of the business: Exits and divestments
Simplification of the business: Exits and divestments • Strategic review of Outdoor (annual revenue 35 mEUR) concluded: – Sub-scale player in an investment heavy and tender based market – No synergies with our professional business • Sold the Danish-based part of the business (the 2150-2250 range co
Slide 12: Simplification of the business: Production footprint
Simplification of the business: Production footprint • Closure of production in Suzhou, China, and outsourcing of production of consumer and private label products – earlier than planned execution due to strike – negative impact on consumer revenue in Q3 and negative impact on Q4 revenue in Specialt
Slide 13: Financial impact of simplification actions
Financial impact of simplification actions • The divestments/close downs are expected to lead to – slightly positive cash flow – a P/L charge on special items of 30-35 mEUR, with impact in Q3 of 20 mEUR – non-cash B/S write downs but no goodwill impairment • EBITDA margin in 2019 expected to be posi
Slide 14: Agenda
Agenda 1 Highlights 2 Business unit update 3 Simplifications initiatives 4 Financials 5 Outlook 2018 6 Q&A 14 Nilfisk | Q3 Interim Report 2018 | Webcast
Slide 15: Gross Margin in line with Q3 2017 but declining from previous quarters
Gross Margin in line with Q3 2017 but declining from previous quarters Comments -0.6% • Gross margin of 40.9% in line with Q3 2017 42.6% +0.1% 42.0% 40.8% 40.9% • Negative impact compared to H1 due to: – Increased raw material prices – Tariff impact in US – Changes in product mix – One-off cost in p
Slide 16: EBITDA margin in line with expectations
EBITDA margin in line with expectations Comments +1.6 pp 10.5% +1.3 pp 10.2% • EBITDA margin (operating margin) of 10.5% in line with expectations, up 1.6 percentage points 8.9% compared to Q3 2017 8.9% • YoY improvement caused by lower overhead cost ratio (33.5% vs 35.0% in Q3 2017 excluding phanto
Slide 17: Cost saving program on track
Cost saving program on track Full potential Comments 2017 2018 2018 2019 2020 Realized 9M Expected Expected Expected end 2020 EUR million • In Q3 2018, a further 2 mEUR of the program is executed. In total 30 mEUR attained: Annual accumulated impact on – Overhead reductions of 18 mEUR EBITDA before
Slide 18: Working capital and RoCE
Working capital and RoCE Working Capital ratio LTM Comments 20.0% 19.2% 17.6% 17.5% 18.0% 17.0% 16.2% • Working capital ratio 18.0%, above expected normalized level due to: – increased inventories following the production footprint simplification • RoCE of 15.2% improved over H1 due to higher FY 201
Slide 19: Agenda
Agenda 1 Highlights 2 Business unit update 3 Simplifications initiatives 4 Financials 5 Outlook 2018 6 Q&A 19 Nilfisk | Q3 Interim Report 2018 | Webcast
Slide 20: Outlook 2018 – reiterated from October update
Outlook 2018 – reiterated from October 11 update Organic EBITDA margin revenue growth before special items Approx. Lower end of 2% 11.5%-12.0% 2018 guidance 2018 guidance 20 Nilfisk | Q3 Interim Report 2018 | Webcast
Slide 21: Agenda
Agenda 1 Highlights 2 Business unit update 3 Simplifications initiatives 4 Financials 5 Outlook 2018 6 Q&A 21 Nilfisk | Q3 Interim Report 2018 | Webcast
Slide 22: Q&A
Q&A Page 22 Nilfisk | Q3 Interim Report 2018 | Webcast
Slide 23: Forward-looking statements
Forward-looking statements This presentation and related comments contain forward-looking statements. Such statements are subject to many uncertainties and risks, as various factors, of which several are beyond Nilfisk Holding’s control, may cause that the actual development and results differ mater