Fluidra, S.a. · BME:FDR
Fluidra — Investor Day (September 2022)
38 slides from Fluidra's investor day presentation, September 2022
Slide 1: To Create the Perfect Pool & Wellness Experience, Responsibly
TO CREATE THE PERFECT POOL & WELLNESS EXPERIENCE, RESPONSIBLY Investor Relations Materials August-September 2022
Slide 2: Disclaimer
DISCLAIMER This document is for information purposes only and does not constitute an offer to sell, exchange or buy, or an invitation to make offers to buy, securities issued by any of the companies mentioned. This financial information has been prepared by Fluidra, S.A. ("Fluidra", and with all i
Slide 3: Global Leaders in a Resilient Growth Industry
GLOBAL LEADERS IN A RESILIENT GROWTH INDUSTRY Attractive industry with sustainable growth 1 driven by aftermarket and low price elasticity Global leader based on unique footprint, go to 2 market and offering Track record of growth, margin expansion and 3 value creation for shareholders 3
Slide 4: Step Change in Consumer Trends Accelerating Growth Drivers
STEP CHANGE IN CONSUMER TRENDS ACCELERATING GROWTH DRIVERS Market Dynamics & Drivers Market Step Change Consumer trends Large installed pool base with accelerating growth Flight to suburbs globally and in the USA to the sunbelt Average selling price continues to grow Increasing tendency towards outd
Slide 5: Sustainable Long Term Growth Supported by Increasing Installed Base
SUSTAINABLE LONG TERM GROWTH SUPPORTED BY INCREASING INSTALLED BASE Resiliency driven by large installed base Acceleration in the evolution of the pool base Residential inground pools in millions Split by market type 2020 New Build @ 20 '19 Volumes 21% 15 New Build above '19 10 Volumes 4% 5 Aftermar
Slide 6: Large Global Market – Highly Fragmented & Led by Fluidra
LARGE GLOBAL MARKET – HIGHLY FRAGMENTED & LED BY FLUIDRA NA & Europe make up for the bulk of the large Global market Fluidra is #1 in countries with 40% of global pool base and top 3 in 93% Split by market 2020 Rest of the World 21% Global Pool Europe Market NA 30% 49% €11.5bn Fluidra is the global
Slide 7: Global Industry Leader – Strengthened, and Invested, to Win
GLOBAL INDUSTRY LEADER – STRENGTHENED, AND INVESTED, TO WIN WHY FLUIDRA WINS 2015-19 2020 2021 Medium term growth Assumptions Market growth Broadest geographic footprint – access to all markets for 1 growth & diversification New Build growth Optimal business model and adapted “route to market” - 2 B
Slide 8: Blended Model Adapts & Optimizes Route to Market Across Globe
BLENDED MODEL ADAPTS & OPTIMIZES ROUTE TO MARKET ACROSS GLOBE Fluidra operates across the value chain with Significance of Pool Pro an adapted regional model • Critical route to market > 70% of channel share Fluidra presence • Pool Pro is key decision-maker for product North America: selection and s
Slide 9: Global R&D Leader with Focus on Value Enhancing IoT Ecosystem
GLOBAL R&D LEADER WITH FOCUS ON VALUE ENHANCING IOT ECOSYSTEM IoT benefits the entire pool ecosystem R&D capability with >200 engineers and 1 • Peace of mind >1,400 patents End User • Quality of service • Cost efficiency • 3x more patents than the next industry player 2 • Efficiency Pool Pro’s • P
Slide 10: M&A Track Record: Regular, Systematic Process - Creating Value
M&A TRACK RECORD: REGULAR, SYSTEMATIC PROCESS - CREATING VALUE Clear acquisition parameters Disciplined M&A strategy in a largely fragmented market Opportunity for product range & Culturally aligned • Objective to generate additional annual sales growth of customer expansion c. 1-2% per annum • Larg
Slide 11: Efficient Pool Systems Drive Replacement Cycle
EFFICIENT POOL SYSTEMS DRIVE REPLACEMENT CYCLE Automatically optimizes for peak Uses 70% efficiency Variable-Speed less energy iAquaLink Pumps Reduces chlorine use by Uses less than up to 50% Salt + Mineral Sanitization LED Lighting 50W of power Reduces 50% increase in evaporation by Jandy hydraulic
Slide 12: Proven Track Record of Growth and Margin Expansion
PROVEN TRACK RECORD OF GROWTH AND MARGIN EXPANSION - SET TO CONTINUE A Story of Growth, Accelerated in 2021 Proven Margin Expansion (€bn Sales) (Adjusted EBITDA % Sales) 2.5 27% €2.2bn 25.1% 25% >650 2.0 bps 23% 1.5 €1.3bn 21% 1.0 18.6% 19% 0.5 17% 0.0 15% (1) 2018 2019 2020 2021 2018 2019 2020 2021
Slide 13: High Quality Cash Returns on Investment – Set to Improve Further
HIGH QUALITY CASH RETURNS ON INVESTMENT – SET TO IMPROVE FURTHER Very strong operating, cash conversion and returns dynamics … • Delivering Growth & Avg. FCF conversion1 ROCE2 Quality of Returns 83% FCF conversion at - Fluidra leads a fast-growing normalized 6% sales growth industry 22% >90% 66% - A
Slide 14: Medium-Term Strategic & Financial Objectives Summary
MEDIUM-TERM STRATEGIC & FINANCIAL OBJECTIVES SUMMARY > Industry, leveraging global footprint Operating and financial performance Growth Focus on North America expansion Past Step change Future Drive by innovation, IoT, Commercial Pool Medium 2017-19 20202 20212 2022E Term Continued execution
Slide 15: Appendix
APPENDIX FLUIDRA CAPITAL MARKETS DAY
Slide 16: Responsibility Blueprint: Clear Commitments in Each ESG Vertical
RESPONSIBILITY BLUEPRINT: CLEAR COMMITMENTS IN EACH ESG VERTICAL Environment Social Governance Carbon neutral Zero net wage gap Rating Be a carbon neutral company in Equal pay for equal work Reach a score of 80 in 2027 (Scope 1 & 2) and by 2050 between men and women by S&P in 2030 (Scope 3) 2024 − 2
Slide 17: CMP Acquisition Case Study (Q1 2021)
CMP ACQUISITION CASE STUDY (Q1 2021) – MEETS ALL OUR CRITERIA Our Criteria & CMP Opportunity Fast-growing business - attractive adjacent segment (sales by segment) Expands Group North America Footprint: US 1 manufacturer of solutions for recreational water industry • 2016-20 Sales CAGR of Product ra
Slide 18: S.R. Smith Acquisition (Q3 2021)
S.R. SMITH ACQUISITION (Q3 2021) S.R. Smith Acquisition Rationale Sales by segment Complementary pool deck business accelerates 1 growth in the US Accelerate commercial pool business in North $103m 2 America and provides a start in Australia Significant revenue synergies (>$10M) as well as 3 cost sy
Slide 19: Ownership Structure and Board Composition
OWNERSHIP STRUCTURE AND BOARD COMPOSITION Ownership structure(1) Board Composition(1) 12 members Bárbara Borra Free float 60.4% Eloi Planes Esther Berrozpe (Executive Chairman) Bernardo Corbera Bruce Brooks Jorge Constans (CEO) Bernat Garrigós Steven M. Langman Gabriel López Founding Óscar Serra Jos
Slide 20: US GAAP to IFRS - Key Financial Differences for Fluidra
US GAAP TO IFRS - KEY FINANCIAL DIFFERENCES FOR FLUIDRA €M 2021 Adjusted EBITDA 548.8 Lease expense (29.3) Lease expenses not included in P&L under IFRS 16 R&D expense (12.8) Capitalized R&D expenses Adjusted EBITDA (US GAAP comparable) 506.7 20
Slide 21: 1H 2022 Results
1H 2022 RESULTS July 29th 2022
Slide 22: Key Messages
1H RESULTS 2022 Key Messages 1. Current trends in end-user demand confirm that our market has experienced a step change. 2. Solid top line evolution in Q2 driven by price and M&A. 3. Margin impacted by time lag between pricing implementation and prevailing inflation dynamics, with higher price read-
Slide 23: YTD Financial Highlights
1H RESULTS 2022 YTD Financial Highlights Record Financials with Margin Impacted by Higher-Than-Anticipated Inflation • Sales grew double digit in Q2 over a very strong Q2 2021, mainly driven by price Evol. Const. FX & and perimeter expansion. YTD €M 2021 2022 22/21 Perimeter • EBITDA and EBITA impac
Slide 24: Current Environment and Business Update
1H RESULTS 2022 Current Environment and Business Update Current Environment Business Mix • Sell-through levels globally at mid-single digit, higher in North • Organic revenue up 4% in Q2, on top of an outstanding >40% America if adjusted for Texas Freeze. growth in 2021. • Volumes being impacted by
Slide 25: Highlights of the Quarter
1H RESULTS 2022 Highlights of the Quarter ESG “Responsibility Blueprint” Continued Momentum In Connected Pools M&A • On the “Social” front, 2022 Survey results show • c.700k connected users growing >40%, • Acquired Swin & Fun, a Danish distributor for a continued outstanding employee engagement ahea
Slide 26: Sales by Geography
1H RESULTS 2022 Sales by Geography Strong M&A and Price Contribution • Southern Europe, good performance % % Evol. Const. FX & across all regions led by Spain boosted Q2 €M 2021 2022 Sales Sales 22/21 Perimeter by the return of tourism. Southern Europe 237 35% 259 33% 9.1% 9.6% • Rest of Europe decl
Slide 27: Sales by Business Unit
1H RESULTS 2022 Sales by Business Unit Residential Aided by M&A and Strong Commercial Recovery % % Evol. Const. FX & • Residential Pool aided by M&A. Strong Q2 €M 2021 2022 Sales Sales 22/21 Perimeter New Construction offsetting Aftermarket, Pool & Wellness 661 98% 763 98% 15.3% 3.8% against outstan
Slide 28: YTD Results
1H RESULTS 2022 YTD Results Record Results Despite Margin Impact • Solid Sales growth in Q2 driven by price and M&A. % % Evol. YTD €M 2021 2022 Sales Sales 22/21 • Gross Margin impacted by inflation and mix, Sales 1,186.7 100% 1,445.4 100% 21.8% partially compensated by accelerating price increase r
Slide 29: Cash Flow and Net Debt YTD
1H RESULTS 2022 Cash Flow and Net Debt YTD Cash Flow Generation Impacted by Investment in Inventory YTD €M 2021 2022 € Evol. 22/21 Reported EBITDA 303.6 349.6 46.0 • Operating Cash Flow impacted by higher investment in Net Working Capital due to Net Interest Expense Paid (16.4) (23.0) (6.6) signific
Slide 30: Outlook 2022: Industry Transitioning to a Post-COVID World
1H RESULTS 2022 Outlook 2022: Industry Transitioning to a Post-COVID World The Market is Changing Towards More Normalized Practices 1. Sell-through at mid-single digit for the full year, North America at double digit once corrected for Texas Freeze, validating the step change. 2. As the supply chain
Slide 31: Conclusions
1H RESULTS 2022 Conclusions 1. Step change validated with growth over a very difficult comp. 2. Record results impacted by temporary margin decline. The company continues to demonstrate pricing power, with improved margin YoY expected in H2. Temporary inventory correction due to industry transitioni
Slide 32: Appendix
1H RESULTS 2022 Appendix 1H 2022 RESULTS 29/07/2022 32
Slide 33: (I) Sales by Geography
1H RESULTS 2022 (I) Sales by Geography Evol. Constant Const. FX & Q2 Const. FX 22/21 Perimeter Perimeter Southern Europe 9.1% 9.1% 9.6% 9.6% Rest of Europe (16.3%) (17.0%) (16.3%) (16.9%) North America 33.7% 17.8% 17.7% 3.4% Rest of the World 36.0% 31.7% 30.0% 26.3% Total 14.8% 9.2% 8.5% 3.5% Evol.
Slide 34: (II) Reported Profit & Loss Account YTD
1H RESULTS 2022 (II) Reported Profit & Loss Account YTD €M 2021 % Sales 2022 % Sales Evol. 22/21 Sales 1,186.7 100% 1,445.4 100% 21.8% Gross Margin 627.8 52.9% 737.1 51.0% 17.4% Opex before Dep. & Amort. 324.2 27.3% 387.5 26.8% 19.5% Reported EBITDA 303.6 25.6% 349.6 24.2% 15.2% D&A 59.4 5.0% 75.2 5
Slide 35: (III) Reconciliation to Reported EBITDA YTD
1H RESULTS 2022 (III) Reconciliation to Reported EBITDA YTD €M 2021 2022 Evol. 22/21 EBITDA 330.1 360.7 9.3% Integration Related Non-Recurring Expense (7.7) (2.8) (63.5%) Other & FX impact on Non-Recurring Expense - (2.1) na Stock Based Compensation (18.3) (6.2) (66.1%) Run Rate Synergies (0.5) - (1
Slide 36: (IV) Reconciliation of Reported to Cash Net Profit and Cash EPS YTD
1H RESULTS 2022 (IV) Reconciliation of Reported to Cash Net Profit and Cash EPS YTD €M 2021 2022 Evol. 22/21 Reported Net Profit from Continued Operations 174.2 166.5 (4.5%) Integration Related & Other Non-Recurring Expense 7.7 4.9 (36.9%) Stock Based Compensation 18.3 6.2 (66.1%) Run Rate Synergies
Slide 37: (V) Reported Balance Sheet
1H RESULTS 2022 (V) Reported Balance Sheet Assets 06/2021 06/2022 Liabilities 06/2021 06/2022 PPE & Rights of Use 254.1 345.7 Share Capital 195.6 195.6 Goodwill 1,148.5(1) 1,320.0 Share Premium 1,148.6 1,148.6 Other Intangible Assets 759.6 996.0 Retained Earnings 322.2 432.2 Other Non-Current Assets
Slide 38: Thanks For Your Attention
Thanks For Your Attention +34 93 724 39 00 Investor_relations@fluidra.com Avda. Alcalde Barnils 69 - 08174 Sant Cugat (Barcelona) www.fluidra.com