Arbonia Ag · SIX:ARBN
Arbonia — FY2019 Earnings Presentation
47 slides from Arbonia's earnings presentation, February 2020
Slide 1: Annual results 2019
Annual results 2019 Alexander von Witzleben, CEO Daniel Wüest, CFO
Slide 2: 2019 summary: Overview key metrics
2019 summary Overview key metrics (CHF M) Net revenues1 EBITDA2 Net debt3 Capex Free cash flow +3% 8.4% 9.5% 0.9x 1.1x 1′374 1′416 EBITDA Margin Leverage Ratio +17% +11 M -16% 135 117 135 +62 M 115 53 113 128 8 2018 2019 2018 2019 2018 2019 2018 2019 -54 IFRS 16 2018 2019 Revenues increase due EBITD
Slide 3: Agenda
Agenda 1. Arbonia’s 1. Market Situation 2019 transformation completed 2. Group results 2019 3. Market environment and key drivers 4. Divisional and corporate strategy 5. Guidance Questions | Annual results 2019 3
Slide 4: Arbonia's 5-year performance: Transformation completed
Arbonia’s 5-year performance: Transformation completed Key figures 2015-2019 (CHF M) Net revenues CF from operating activities CAGR CAGR 15-19 15-19 +11% +20% 1′246 1′374 1′416 112 941 995 69 70 54 32 Capex 2015 2016 20171 20181 2019 2015 2016 2017 2018 2019 135 105 113 62 22 EBITDA21 Shareholders’
Slide 5: Arbonia's 5-year EBITDA performance: Divisions
Arbonia’s 5-year EBITDA performance: Divisions Key figures 2015-2019 (CHF M) HVAC1 Sanitary Equipment2 CAGR CAGR 15-19 15-19 +10% 55 59 41 44 46 +12% 14 17 13 15 10 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Windows3 Doors4 CAGR CAGR 15-19 15-19 +13% +43% 40 44 35 36 27 27 13 16 7 8 25 33 2 3
Slide 6: Ongoing shift from West to East
Ongoing shift from West to East Europeanisation of HR footprint Average FTE 20151: 6′186 Average FTE 20191: 8′606 11% 23% Regional distribution 48% 52% 33% (Ø FTE) 25% 4% 4% Personnel expense 37.4% 33.9% ratio2 Switzerland South (IT, ES, others) West (DE, FR, BE, NL) Central / East (DE, CZ, SK, PL,
Slide 7: Production sites and FTE allocation 2015
Production sites and FTE allocation Ø FTE1 2015 = 8′168 NL DE PL BE CZ SK AT FR CH Arbonia Group production sites: HVAC IT Sanitary Equipment CH Windows ES Doors PT IT > 250 FTE < 250 FTE FTE allocation: > 1′000 500 – 999 100 – 499 <100 1 Including temporary employees | Annual results 2019 7
Slide 8: Production sites and FTE allocation 2019
Production sites and FTE allocation Ø FTE1 2019 = 8′606 NL DE PL RU BE RU CZ SK AT FR CH Arbonia Group production sites: HVAC IT Sanitary Equipment CH Windows ES Doors PT IT > 250 FTE < 250 FTE FTE allocation: > 1′000 500 – 999 100 – 499 <100 1 Including temporary employees | Annual results 2019 8
Slide 9: Arbonia brands and presence
Arbonia brands and presence Region Revenues1 HVAC Sanitary Equipment Windows Doors 4 25% 39% 11% 4 Private Label 6% 6% 3 RoW2: 13% Various Various Various 1 Arbonia Group revenues | 2 RoW includes 12% revenues in rest of Europe and 1% revenues in overseas 3 Baduscho is only present in Austria, other
Slide 10: Agenda
Agenda 1. Arbonia’s transformation completed 2. Group results 2019 3. Market environment and key drivers 4. Divisional and corporate strategy 5. Guidance Questions | Annual results 2019 10
Slide 11: Income Statement without one-time effects
Income Statement Without one-time effects In CHF M 2019 in % 2018 in % I Cost of material • Support from lower Net revenues 1′416.0 100.0 1′374.0 100.0 material costs (glass, I Cost of material and goods -635.9 -44.9 -633.7 -46.1 wood, etc.) ... II Personnel expenses -472.9 -33.4 -447.6 -32.6 II Per
Slide 12: Income Statement with one-time effects
Income Statement With one-time effects In CHF M 2019 in % 2018 in % I Personnel exp. Net revenues 1′416.0 100.0 1′374.0 100.0 • Reflecting restructuring charges at Vasco and Cost of material and goods -638.3 -45.1 -633.7 -46.1 EgoKiefer, closure of I Wertbau Elemente plus Personnel expenses -480.1 -
Slide 13: 2019 summary: Performance by Division
2019 summary Performance by Division All figures in CHF M1 Sanitary HVAC2 Equipment Windows Doors +10% -2% +1% 505.5 554.7 -1% 366.3 358.2 357.5 359.4 Net 144.8 143.8 revenues 2018 2019 2018 2019 2018 2019 2018 2019 +8% +9% 59.0 +70% 54.8 +21% 40.2 44.0 27.1 12.5 15.1 16.0 EBITDA3 2018 2019 2018 201
Slide 14: Net revenues by Division and Region
Net revenues by Division and Region Share of HVAC up due to Vasco and Tecna acquisitions Net revenues by Division Net revenues by Region 18% 26% (17%) 25% (26%) (26%) 39% (37%) 6% (4%) 12% (13%) 25% 10% (27%) (10%) 39% (40%) HVAC Switzerland Sanitary Equipment Germany Windows Eastern Europe1 Doors B
Slide 15: Top-line growth negatively impacted by translation effects – Organic growth
Organic growth Top-line growth negatively impacted by translation effects – organic growth mainly driven by price effects Net revenues as Δ Currency Acquisition Organic reported 2019 20181 Year Total effects effects growth2 in CHF M Arbonia 1′416.0 1′374.0 +3.1% -2.9% +3.9% +2.0% HVAC 554.7 505.5 +9
Slide 16: Financials: Balance sheet
Financials Balance sheet In CHF M 2′000 I Assets 1′512 1′534 1′500 • IFRS 16, capitalisation of right-of-use assets 30.2% 27.8% (leases) of CHF 55 M as of 01/01/2019 1′000 • Capitalisation of capex 2019 500 69.8% 72.2% 0 12 2018 12 2019 Current assets Non-current assets In CHF M 2′000 II Liabilities
Slide 17: Net debt as of December 2019
Net debt as of December 2019 In CHF M I Net debt 250 3x Leverage ratio (excl. IFRS 16) 225 • Slight increase of net debt by CHF 11 M to CHF 128 M compared to 12 2018 mainly due IFRS 16 effect to dividend payment Net debt 200 54 • Early refinancing of existing CHF 350 M 181 credit facility planned fo
Slide 18: Financials: Cash flow statement
Financials Cash flow statement I Cash flow from operating activities In CHF M • Strong increase of cash flow from operating 150 +61% activities testifies operational performance of underlying business 100 • Positive effect out of lower NWC – first relief due 50 111.8 to completed factory relocations
Slide 19: Agenda
Agenda 1. Arbonia’s transformation completed 2. Group results 2019 3. 3. Market Market environment environment and and key key drivers drivers 4. Divisional and corporate strategy 5. Guidance Questions | Annual results 2019 19
Slide 20: Market environment and key drivers
Market environment and key drivers Energy efficiency / Carbon neutrality CO2 efficiency and related subsidies support energy efficient products in new buildings and renovation Urbanisation Market environment Urbanisation and aged population Development of construction market trigger new construction
Slide 21: Market environment: Development of relevant construction market
Market environment Development of relevant construction market Euroconstruct forecast 2020 Key factors Central Europe • Continued low interest rates make interest bearing assets unattractive and boost investments in real estate Germany • Migration to Western European countries increases Switzerland
Slide 22: Energy efficiency / Carbon neutrality: German Climate Protection Concept
Energy efficiency / Carbon neutrality German Climate Protection Concept M tons CO2 emissions 120 Mobility 39% 962 TWh ⅓ isolation of buildings -40% 32% 789 TWh 7% 72 Buildings ⅔ heating system Other 172 TWh 22% 543 TWh Process heat1 2014 2030 Annual German energy consumption How to reduce CO2 emissi
Slide 23: Energy efficiency / Carbon neutrality: German Climate Protection Concept
Energy efficiency / Carbon neutrality German Climate Protection Concept Old oil and gas kWh/sqm p.a. in m. Modern gas boilers Energy use 8 condensing boilers 200 Residential buildings 160 6 57% 120 34% 4 80 5% 2 40 4% Heat pumps 0 0 Biomass boilers until 1919- 1949- 1979- 1996- 2003- 2010- 1919 1948
Slide 24: Urbanisation
Urbanisation Development of urban and rural Reasons population in Europe (1970 – 2050) • Better infrastructure than in rural areas • Ageing of population leads to new needs (nurseries, In M geriatric care, etc.) 800 • Lack of jobs and education opportunities in rural areas • Greater choice of consum
Slide 25: Digitisation and automation
Digitisation and automation Digitisation Automation | Industry 4.0 Customer needs Customer values • New technologies change business models almost • Shorter production times every day • Shorter and more reliable delivery times • Growing expectations for self-service, 24/7 customer • Reduced error ra
Slide 26: Agenda
Agenda 1. Arbonia’s transformation completed 2. Group results 2019 3. Market environment and key drivers 4. Divisional Divisionaland andcorporate corporatestrategy strategy 5. Guidance Questions | Annual results 2019 26
Slide 27: Divisional strategy HVAC
Divisional strategy HVAC Plant productivity Product innovation • Modern, highly automated production sites result • Further product portfolio extension with new in increased efficiencies and permit the commercial ventilation units, residential fan coils implementation of an end-to-end order tracking
Slide 28: Arbonia's energy efficient house
Arbonia’s energy efficient house CO2 efficient energy management system Arbonia introduces a CO2 efficient energy management system. Each component can be used as a plug and play solution or can be combined to an integrated system In order to meet CO2 emission target by 2030 11.8 M old oil- and gas-
Slide 29: Divisional strategy Sanitary Equipment
Divisional strategy Sanitary Equipment Plant productivity Product innovation • A high degree of automation in the production • Renewed full product range based on modern allow for reduced expansion capex in the and high-class design, e.g. new walk-in series upcoming years without fittings and magnet
Slide 30: Divisional strategy Windows
Divisional strategy Windows Plant productivity Product innovation • Production capacity for wood/aluminium windows • Modular product portfolio was complemented with in Langenwetzendorf (DE) / Wertbau is at its a new vinyl window generation, fire resistant highest in Q4 2019 and will increase further
Slide 31: Divisional strategy Doors
Divisional strategy Doors Plant productivity Product innovation • Attractive product portfolio and being customers’ • Further develop full-range product portfolio first choice drives current & future high demand. • Premium edge doors fly off the shelves As current production capacities are strained,
Slide 32: Group strategy
Group strategy Plant productivity Product innovation • State-of-the art production plants through • A product portfolio addressing the need for CO2 automation and industry 4.0 in the divisions leads efficient solutions and systems in buildings to ongoing increase of higher profitability and cost lea
Slide 33: Digitisation
Digitisation ARBONIA DIGITAL Digital cooperations & initiatives Arbonia and ARBONIA DIGITAL consistently understand the digital change as an opportunity – both for business development and growth of the divisions. At the heart of this there are three fundamental values: Customer-centric: A deep unde
Slide 34: Strategic financial roadmap
Strategic financial roadmap Focus on profitable growth and underlying cash generation Growth and profitability Capex • Through the cycle organic top-line growth of • Reduction of maintenance capex ratio to ≤ 4% of c. 3% across all divisions Group revenues • Over-proportional increase of profitabilit
Slide 35: Agenda
Agenda 1. Arbonia’s transformation completed 2. Group results 2019 3. Market environment and key drivers 4. Divisional and corporate strategy 5. Guidance Questions | Annual results 2019 35
Slide 36: Guidance of Arbonia Group
Guidance of Arbonia Group1 Focus on profitable growth and pay-out Guidance 2020 Guidance mid-term Revenues Revenues growth p.a. ~ 3% organic growth ~ 3% organic EBITDA margin2 EBITDA margin2 ~ 10% > 11% Dividend 2019 Dividend policy CHF 0.22 per share Dividend growth ~ 10% p.a. 1 Assuming a stable t
Slide 37: Why Arbonia?
Why Arbonia? ARBONIA DIGITAL Social and economic trends support Arbonia’s business model: Independent unit established to get • Energy efficiency / Carbon neutrality speed into the process of digitisation • Urbanisation and digital transformation • Interest rate environment Commitment Geographic Mem
Slide 38: Disclaimer
Disclaimer Arbonia AG is making great efforts to include accurate and up-to-date information in this document, however we make no representations or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this document and we disclaim any liability whatsoe
Slide 39: Appendix
ARBONIA @& Appendix
Slide 40: Group organisation
Group organisation Board of Directors Alexander von Witzleben, Chairman CEO Alexander von Witzleben 1 CFO Corporate functions Daniel Wüest 1 HVAC Sanitary Equipment Windows Doors Ulrich Bornkessel ¹ Knut Bartsch ¹ Harald Pichler ¹ Peter Spirig ¹ Acquisitions 2018 2016 2015 1 Members of Group Managem
Slide 41: Market environment: Construction market 2020
Market environment Construction market 2020 Residential Non-residential Central Europe Central Europe 0.0 % -2.5% Germany 0.0 % Germany -0.5% -2.8 % 0.0% Switzerland Switzerland 0.3% -1.1 % Eastern Europe Eastern Europe 2.2 % 3.3% Poland 5.2 % Poland 5.2% 3.9 % 1.0% Czech Republic 9.3 % Czech Republ
Slide 42: Market environment: Construction market 2021
Market environment Construction market 2021 Residential Non-residential Central Europe Central Europe Germany -1.5% Germany -2.0% -0.5% 0.0% -2.6% 2.3% Switzerland Switzerland 2.3% -2.0% Eastern Europe Eastern Europe 4.2% Poland -4.5% 4.0% Poland 7.1% Czech Republic 6.2% Czech Republic 0.7% -0.7% -1
Slide 43: European renovation potential
European renovation potential % 100 75.3 % 75 70.8 % 72.0 % 67.7 % 62.1 % 60.9 % 60.8 % 60.6 % 56.1 % 54.1 % 50 37.1 % 24.3 % 26.6 % 25 19.1 % 19.0 % 20.7 % 18.9 % 18.2 % 8.2 % 11.1 % 0 Germany Switzerland Poland Czech Slovakia Italy Spain Belgium Netherlands EU-28 Republic Average Before 1946 Befor
Slide 44: Follow up: German Climate Protection Programme
Follow up: German Climate Protection Programme Renovation Construction Type of heating system incl. replacement Rate of subsidies Rate of subsidies of oil fired boilers biomass or heat pump 35% 45% 35% solar panels 30% 30% renewable energy hybrid systems 35% 45% 35% incl. renewable 30% 40% gas-hybri
Slide 45: Management compensation and incentive
Management compensation and incentive Board of Directors Group Management Upper management • Members of the Board of Directors • Members of Arbonia’s Group • Members of Arbonia’s upper receive a base compensation as Management receive a individual management receive a individual well as additional c
Slide 46: Arbonia shareholder structure
Arbonia shareholder structure As of 31 December 2019 Free float market capitalisation: CHF 646 M3 22% 3% 1% 74% Free float1 Artemis Beteiligungen I AG Leo Looser Arbonia management2 Tradeable Free Float of >72% 1 Every other shareholder with <3% of shares outstanding 2 Members of the Board of Direct
Slide 47: Arbonia Investor Relations
Arbonia Investor Relations ir@arbonia.com +41 71 447 45 54 +41 79 457 01 38