Carel Industries SpA · MIL:CRL
Carel Industries SpA — 9M 2021 Earnings Presentation
36 slides from Carel Industries SpA's earnings presentation, Nov 4, 2021
Slide 1: 2021 – 9M Results
CAREL INDUSTRIES S.p.A. 2021 – 9M Results 4th November 2021 This document and all of its contents are property of CAREL. All unauthorised use, reproduction or distribution of this document or the information contained in it, by anyone other than CAREL, is severely forbidden.
Slide 2: 9M 2021 – Financial highlights
9M 2021 – Financial highlights In spite of the global tensions in the electronic materials supply chain, the company achieved very positive results also in Q3 2021 (over an already favourable Q3 2020, +7.7%): a double-digit revenue growth (~15.0%) on a like-for-like basis. • Excluding the adverse im
Slide 3: 9M 2021 – Org. rev. growth and profitability >21%
9M 2021 – Org. rev. growth and profitability >21% KPIs 9M 2019-2021 Revenues (excluding Enginia/CFM) m€ 9M 2020 9M 2021 Δ% +21.4% (1) Revenue 248.0 310.3 25.1% 300.9 Revenue FX Adj. 248.0 313.0 26.2% 247.7 248.0 Revenue (no M&A) 248.0 300.9 21.4% (2) EBITDA 48.5 66.0 36.1% (3) EBITDA adj. 48.7 68.0
Slide 4: 9M 2021 – Revenue breakdowns
9M 2021 – Revenue breakdowns Breakdown by region Breakdown by sector Other 1% South America 2% North America HVAC 11% 65% EMEA 72% 310.3 310.3 APAC Refrig. M€ 15% M€ 34% m€ m€ m€ m€ m€ m€ Area 9M 2019 9M 2020 9M 2021 Δ% Δ% fx Sector 9M 2019 9M 2020 9M 2021 Δ% Δ% fx EMEA 173.6 179.0 224.1 25.2% 25.4%
Slide 5: From EBITDA to Net Profit
From EBITDA to Net Profit K€ 9M '20 9M '21 Δ% • Higher D&A mainly due to the change in EBITDA 48,523 66,042 36.1% the scope of consolidation (CFM and Enginia) and higher capex. D&A -13,768 -15,147 EBIT 34,755 50,894 46.4% • Higher financial charges due to IFRS 16 Financial (charges)/income -1,095 -1
Slide 6: 9M 2021 – NFP Bridge
9M 2021 – NFP Bridge -32.4% 35.0 68.5 28.2€ 49.6 from IFRS 16 28.2m€ 12.0 from 33.5 IFRS 16 13.8 (4.8) 13.7 21.4 (39.1) 3.5 40.3 m€ (15.1) NFP Net Profit D&A Leasing/ NWC CAPEX Dividends Provisions and Organic NFP M&A NFP FY 2020 rent fees Other 9M 2021 9M 2021 • Excluding the impact of the M&A acti
Slide 7: Closing Remarks
Closing Remarks • The same positive trends reported in the first half of the year drove the demand, with the same intensity, in Q3: • HVAC - heat pumps, data centres and indoor air quality segments continued to grow. Demand • Refrigeration - the strong recovery in the investment cycle in Food Retail
Slide 8: Annexes
Annexes
Slide 9: Shareholding structure (>5% voting rights)
Shareholding structure (>5% voting rights) CAREL Industries S.p.A. CAREL Industries S.p.A. Number of shares Voting rights Other Luigi Rossi Luciani Other Shareholders; Luigi Rossi Luciani Shareholders; S.a.p.a; 36.17% S.a.p.a; 45.05% 38.90% 24.23% 7 Industries B.V.; 5.81% 7 Industries B.V.; 4.93% Lu
Slide 10: Income statement and Balance Sheet
Income statement and Balance Sheet Income statement Balance sheet K€ 9M 2021 9M 2020 Delta % K€ 9M 2021 FY 2020 Delta % Revenues 310,309 247,955 25.1% Fixed Capital 231,324 176,413 31.1% Other revenues 3,409 2,157 58.0% Working Capital 52,694 41,007 28.5% Operative costs (247,677) (201,589) 22.9% Em
Slide 11: M&A - CFM
M&A - CFM • Key Data: Enterprise value (51%) = 23.1m€ 2020 Revenues = 14.5m€ EBITDA = 5.0m€ Employees = ~34 • Industrial fitting: Bolt-on acquisition Footprint expansion outside Western Europe Strong know-how in digital and on- field services • Company profile: a long-standing distribu
Slide 12: M&A - Enginia
M&A - Enginia • Key Data: Enterprise value* = 12.4m€ 2020 Revenues = 12.3m€ 2020 EBITDA = 1.5m€ Employees = 46 • Industrial fitting: Bolt-on acquisition Completing CAREL’s product range for AHU Significant synergies with CAREL/Recuperator • Company profile: Enginia has been operating i
Slide 13: Company profile
Company profile
Slide 14: Leading provider of advanced control solutions for HVAC/R
Leading provider of advanced control solutions for HVAC/R Key financials – 2020A • HVAC: Industrial, Residential, Growing key Commercial markets • Refrigeration: Food Retail and Revenue EBITDA EBITDA margin Net income Food Service €332m €65m ~19.7% €35m Leadership in • Control solutions premium +10%
Slide 15: We operate in attractive niches across a wide range of end-markets…
We operate in attractive niches across a wide range of end-markets… HVAC Refrigeration Industrial Residential Commercial Food Retail Food Service Data Centers Residential Shopping Centers Convenience Stores Restaurant Chains Industry and Process Office Space Hypermarkets Refrigerated Merchandisers P
Slide 16: …through a one-stop-shop portfolio of components and platforms
…through a one-stop-shop portfolio of components and platforms Adiabatic humidifiers and Programmable controls HMI and unit terminals Parametric controls Isothermal humidifiers evaporative coolers Electronic controls easily programmable and customizable User interfaces for units and systems Entry le
Slide 17: Long track record of profitable organic growth
Long track record of profitable organic growth Revenue (€m) 327 332 280 231 255 203 1990s 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A Adj. EBITDA (€m) 63 65 55 51 43 38 1990s 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2
Slide 18: Well-articulated strategies to continue the growth track record
Well-articulated strategies to continue the growth track record • Consolidation of HVAC market leadership • Growth in Refrigeration driven by technology leadership • Upselling and cross-selling HVAC Refrigeration • Global penetration to consolidate to represent the its market leadership engine of gr
Slide 19: Leading provider of advanced energy efficient control solutions
Leading provider of advanced energy efficient control solutions 1 High-tech leader in attractive niches of the HVAC/R industry 2 Attractive above market growth supported by secular trends Positioning and technological innovation capability hard to 3 replicate Highly efficient global operations servi
Slide 20: High-tech leader in attractive niches of the HVAC/R industry
1 High-tech leader in attractive niches of the HVAC/R industry Focus on attractive niches… …resulting in leadership positioning …CONSOLIDATED …INNOVATION-ORIENTED High value applications IN HVAC PREMIUM NICHES IN REFRIGERATION Deep knowledge of final applications is 33%1 #1 SIGNIFICANT ROOM FOR key
Slide 21: Attractive market growth supported by secular trends
2 Attractive market growth supported by secular trends Secular trends… …supporting attractive market growth Reference HVAC and refrigeration Market GROWING • Improvement in LIVING STANDARDS POPULATION increasing demand for HVAC/R • Focus on WASTE REDUCTION in CHANGE IN food sector CONSUMER • Increas
Slide 22: Growth is driven by market trends and focused strategic actions…
2 Growth is driven by market trends and focused strategic actions… Growth drivers SECULAR TRENDS Market Increasing the market of the applications addressed by CAREL trends NICHES EXPANSION Secular Leverage of deep knowledge of final trends applications to expand to adjacent niches Expansion to Incre
Slide 23: …and favoured by up-selling and cross-selling
2 …and favoured by up-selling and cross-selling FROM PRODUCT PLATFORMS TO INTEGRATED ELECTRONIC SOLUTIONS… PRODUCT PLATFORMS SYSTEMS From a COMBINATION OF PRODUCTS FROM DIFFERENT PLATFORMS To an ECOSYSTEM TO QUICKLY ADOPT NEW TECHNOLOGIES …IN THE HVAC AND REFRIGERATION MARKETS HVAC Refrigeration Exa
Slide 24: Positioning and innovation capability hard to replicate
3 Positioning and innovation capability hard to replicate ~6% OF REVENUE1 ~13% OF TOTAL WORKFORCE Invested annually in R&D dedicated to R&D 5 R&D CENTRES PROPRIETARY SOFTWARE COMBINING 5 DOMAINS Vast library of proprietary software modules UNIQUE 01100 • Hardware & Firmware developed over the past 1
Slide 25: Leadership position in HVAC OEM premium niches…
3 Leadership position in HVAC OEM premium niches… Leadership positioning in premium …with no perfect comparable niches… Chiller European Market Share1 OEM Large 33% proprietary diversified EM / Low cost 26% solutions competitors competitors 14% 8% 6% Vertical niche approach Innovation p
Slide 26: …and leading in innovation in the refrigeration market
3 …and leading in innovation in the refrigeration market Leveraging on HVAC experience… …CAREL is a leader in innovation Large diversified EM / Low cost competitors competitors 2014 HEOS SISTEMA Waterloop system with DC tech for refrigeration Vertical niche approach Innovation pace & 2015
Slide 27: Highly efficient global operations serving locally diversified customers
4 Highly efficient global operations serving locally… NORTH AMERICA WESTERN EUROPE NORTH APAC GLOBAL PRODUCTION FOOTPRINT 1 5 Plant Plants 146 924 Employees Employees DIRECT AND HIGHLY SKILLED SALES NETWORK 65 187 Sales force Sales force 1 82 x3 Plant Sales force 1 3 BEST POSITIONED TO CAPTURE R&D C
Slide 28: …diversified blue-chip customers
4 …diversified blue-chip customers HVAC REFRIGERATION GLOBAL BLUE-CHIP APAC 15% EMEA >9,000 <4% South America 71% Customers 2% BROAD & HIGHLY from first customer1 DIVERSIFIED In c. 100 c. 20% North America 13% countries worldwide from top-15 customers2 2020A revenue LONG-TERM ~80% ~70% BUSINESS of T
Slide 29: Track record of profitable organic growth
5 Track record of profitable organic growth Organic double-digit growth Strong profitability High conversion to net income Cash generative business Revenue1 (€m) EBITDA1 (€m) Net Income1 (€m) Operating cash2 (€m) 52.9 327.0 332.0 35.0 35.0 65.2 63.1 45.0 31.2 30.7 280.2 39.8 255.4 50.9 47.0 25.1 231
Slide 30: Global expansion, innovation and services
6 A Global expansion, innovation and services Pursuing additional Consolidation of opportunities leadership positions improving services in HVAC offer with IoT and Growth in advanced Refrigeration monitoring solutions Geographical Cross-selling and up- expansion through selling exploiting the introd
Slide 31: Pursuing external growth through disciplined bolt-on M&A
6 Pursuing external growth through disciplined bolt-on C M&A CAREL has performed detailed analyses and scouting of potential targets, thus promoting an opportunistic approach with a focus on 3 MAIN EXPANSION AREAS: A B C COMPLEMENTING GEOGRAPHICAL Potential selected CORE-BUSINESS EXPANSION acquisiti
Slide 32: M&A
M&A
Slide 33: M&A - Recuperator
M&A - Recuperator • Key Data: Cash-out for equity = 25.7m€ Company positive net-cash = 6.9m€ 2017 Revenues = 16.4m€ EBITDA = 1.7m€ Employees = ~60 • Industrial fitting: Small-size Company Complementary products Carel’s commercial strength Cross-selling • Financial fitting: ~11x E
Slide 34: M&A - HygroMatik
M&A - HygroMatik • Key Data: Cash-out for equity = 56.1m€ Enterprise Value = 59.0m€ 2017 Revenues = 15.0m€ EBITDA = 4.7m€ Employees = ~60 • Industrial fitting: Small-size Company Interesting geographic positioning Strong in after-sale services Cross-selling • Financial fitting: ~
Slide 35: Disclaimer
Disclaimer This document has been prepared by CAREL Industries S.p.A for use during meetings with investors and financial analysts and is solely for information purposes. The information set out here in has not been verified by an independent audit company. Neither the Company nor any of its subsidi
Slide 36: This document and all of its contents are property of CAREL. All unauthorised use,
36 This document and all of its contents are property of CAREL. All unauthorised use, reproduction or distribution of this document or the information contained in it, by anyone other than CAREL, is severely forbidden.