Arteche Lantegi Elkartea Sa · BME:ART
Arteche Lantegi Elkartea Sa — H1 2022 Earnings Presentation
39 slides from Arteche Lantegi Elkartea Sa's earnings presentation, Sep 9, 2022
Slide 1: Arteche Corporate Presentation 2022
Arteche Corporate Presentation 2022 0
Slide 2: Disclaimer
Disclaimer The information contained in this presentation of results has been prepared by Arteche Lantegi Elkartea, S.A. (hereinafter the Company or Arteche Group) and includes financial information drawn from the annual consolidated accounts of the Company and its Group as of December 31, 2021, bot
Slide 3: Snapshot of Arteche
Snapshot of Arteche Revenues growth €282m Key financial figures (FY 2021) Arteche is a global designer, >8% CAGR ‘17-’21 manufacturer, integrator and provider of electrical equipment… Focus on renewables >30% Activity of 2021 Rev. … and solutions for the measuring, Attractive operating profitability
Slide 4: Key milestones achieved since its incorporation in 1946
Key milestones achieved since its incorporation in 1946 Founding phase Expansion phase with special focus on internationalization and innovation Post-IPO phase 1973 1975 2007 The Company becomes First product sold New technology technologically abroad center 2011 independent Acquisition of optic mea
Slide 5: Value-add product portfolio
Value-add product portfolio Measurement & Monitoring Transmission & Distribution Network Reliability Systems Grid Automation 2021 Revenues by business line Network Reliability Solutions that guarantee the Services that strengthen T&D Grid 7% Expertise in products focused digitalization and automatio
Slide 6: Arteche’s presence across the value chain
Arteche’s presence across the value chain Services and solutions for Instrument transformers and renewable grid integration sensors to measure electrical and grid code compliance magnitudes Generation Transmission Distribution Relays to command and control power equipment Substation automation to co
Slide 7: Manufacturing capabilities
Manufacturing capabilities Key figures Production and distribution footprint Headquarters Countries with commercial 175 distribution capabilities Sales footprint Physical presence Factories in Europe, (factories and/or 13 America and Asia… delegations) …including dedicated 6 research centres Commerc
Slide 8: Historical financials: Revenues
Historical financials: Revenues Revenues evolution (€m) Since 2017, Arteche has had a strong growth across all business lines • Consolidated its presence in USA, Spain and Brazil in measurement & monitoring systems solutions 255 265 282 217 • Strong growth in automation solutions in EMEA and LATAM 2
Slide 9: Historical financials: Direct margin and EBITDA margin
Historical financials: Direct margin and EBITDA margin The Company has been increasing its share of products with higher operating margins EBITDA margin evolution (€m, %) • Margin improvement measures: o Better control of contracting margins 11.3% 11.1% 10.0% 9.3% 10.8% o Improved sourcing to reduce
Slide 10: Historical financials: Financial debt
Historical financials: Financial debt Arteche conducted several deleveraging efforts to accomplish a sustainable financial structure today Net financial debt (NFD), NFD/EBITDA evolution (€m, x) • Diversified its sources of debt Avg. maturity: 1.6Y Avg. cost: c.6.0% Avg. maturity: 5.2Y • Interest rat
Slide 11: Key investment highlights
Key investment highlights Positive trends within the renewables and transmission & distribution markets are Positive 1 generating new opportunities perspectives Leading independent group backed by key pillars that strengthen its leadership 2 position Differentiated 3 Long-term relationship with sect
Slide 12: Positive trends within renewables and T&D markets generating new opportunities
Positive trends within the renewables and transmission & distribution 1 markets are generating new opportunities Electrification Transformational sector trends (growing electricity demand) Decarbonization Decentralization Digitalization • Increasing energy demand • … and shift towards • … of the tra
Slide 13: Arteche’s addressable market and leadership positioning
2 Arteche’s addressable market and leadership positioning Main markets Global market size Leadership position Key players High voltage #2 instrument transformers #3 Measurement & Monitoring > €1.5bn Systems Medium voltage #1 instrument transformers #2 Relays #1 > Electricity sector > Railway sector
Slide 14: Competitive landscape
2 Competitive landscape Large global players Small specialized players Reliability +40 million units sold during the last 10 years P c.€0.5-1.0m spent yearly in maintaining product Technology homologations P Ability to meet clients’ product specifications Flexibility with lower time to market P Proj
Slide 15: Customer retention and customer acquisition process
2 Customer retention and customer acquisition process Direct relationship with the end user Indirect relationship with the end user Each company has its own standards and criteria for Technical approval / technical approvals Homologation Framework agreement Specifications and internal analysis Produ
Slide 16: Long-term relationship with sector-leading clients
3 Long-term relationship with sector-leading clients Utilities >1,500 globally(1) 1 2021 Revenues by 2021 Revenues client type concentration Others, 7% Client A, 12% OEM, 9% Client B, 7% Diversified Utilities Client C, 5% customer base Distributors 35% Client D, 3% 21% Client E, 3% Others EPC, 28% 6
Slide 17: Industry reference company backed by its outstanding innovation capacity
Industry reference company backed by its outstanding innovation 4 capacity Annual investment in R&D(1) (€m) R&D team with +140 people Dedicated 9.7 8.8 9.2 9.3 team sourced +120,000 hours in 2020 in R&D 4,0 4,4 4,7 4,6 with recurrent investment 5,7 4,4 4,5 4,7 c.30% of the R&D projects are co-develo
Slide 18: Well-defined organic and inorganic growth plan
Opportunity to accelerate growth and improve positioning through a 5 well-defined organic and inorganic plan Pillars of future growth strategic plan New solutions Geographic expansion Such as, Digitalization, Bet on renewables and Expand into the USA and Asia; and ESG and Energy storage solutions co
Slide 19: Best-practices in Corporate Governance
6 Best-practices in Corporate Governance Current shareholding structure The Board of Directors Free-float Alexander Artetxe 15.5% Chairman & CEO Onchena S.L. 5.5% Lander Artetxe Dámaso Arteche family Executive Quintana 52.4% (rep. Ziskua Ber S.L.) Dominical Basque Private Equity Fund 6.4% José María
Slide 20: Environmental and Social responsibility plans at the centre of core activities
Environmental and Social responsibility plans always at the centre of 7 Arteche’s core activities Achievements Sustainability Strategic Goals 2030 10 strategic objectives Net-zero carbon Products designed with ecological 1 Loan from Cofides with a insulation. 5 strategic lines €3m variable component
Slide 21: Closing remarks
Closing remarks Arteche presents strong investment fundamentals 1 2 3 4 5 Unique Sector with high Strong growth Leadership Smart innovation investment entry barriers, perspective position in a capabilities and opportunity with fostering supported with specialized top notch differential value Arteche
Slide 22: H1 2022 Earnings Release
H1 2022 Earnings Release September 9, 2022
Slide 23: Disclaimer
Disclaimer The information contained in this presentation of results has been prepared by Arteche Lantegi Elkartea, S.A. (hereinafter the Company or Arteche Group) and includes financial information drawn from the first half consolidated accounts of the Company and its Group as of June 30, 2022, rev
Slide 24: H1 2022 highlights
H1 2022 highlights Earnings per share of €0.05 vs €0.03 in H1 2022, +57% year-on-year. Order intake of €192.2m up 50.9% vs H1 2021, above expected market growth. Revenue of €156.3m up 21.1% vs H1 2021. ▪ EBITDA reached €13.1m, increasing by 23.1% year-on-year. ▪ EBITDA margin improved year-on-year b
Slide 25: H1 2022 Financial highlights
H1 2022 Financial highlights Order Revenue EBITDA Net profit NFD/EBITDA intake €192.2m €156.3m €13.1m €3.0m 1.90x vs 1.95x +50.9% +21.1% +23.1% +77.0% at Dec 31, 2021 yoy yoy yoy yoy 4
Slide 26: Revenue grew at double-digit rate in H1 2022
Revenue grew at double-digit rate in H1 2022 Growth in all geographical areas Order intake growth (€ million,%) Revenue by geographical region1 (€ million,%) +21.1% +50.9% 156.3 192.2 13% 129.0 15% +58.7% +26.9% APAC 12% 15% 15% 127.4 12% +11.0% 17% LATAM 32% +4.6% 28% 16% 29% NAM +78.2% 27% +17.2%
Slide 27: Sound growth in Q2 2022 and backlog increase
Sound growth in Q2 2022 and backlog increase Quarterly revenue (€ million) +32.8% +9.4% 86.1 82.2 84.8 70.2 68.3 58.4 64.1 61.1 64.9 62.9 Q1 Q2 Q3 Q4 2020 2021 2022 6
Slide 28: Positive contribution from all businesses
Positive contribution from all businesses Measurement and monitoring We strengthen our leadership position Revenue by business division ✓ We beat expected growth. (€ million,%) ✓ We launched new products during H1 2022: remote monitoring systems for transformers and eco friendly gas alternatives. ✓
Slide 29: Direct margin recovery in Q2 2022
Direct margin recovery in Q2 2022 Revenue growth in the quarter offsets a more adverse cost environment Direct margin(1) evolution by quarter Direct margin(1) bridge year-on-year (% of income(2)) (€ million,% of income(2)) +7.5 +1.8 32.1% 28.6% 31.1% +5.8 45.2 +139bps -2.2 30.1% 31.1% 29.4% 29.2% 41
Slide 30: EBITDA H1 2022
EBITDA H1 2022 Growth of +23.1% in the first six months EBITDA margin(1) evolution year on year (€ million,% of revenue) 8.4% ▪ H1 2022 EBITDA grew as a 13.1 result of additional sales +23.1% volume and sales price recovery despite raw material 8.3% +7.8% and logistic headwinds. 8.3% 10.7 9.9 ▪ Arte
Slide 31: Net income H1 2022
Net income H1 2022 Growth of +77.4% in the first six months In € million H1 2022 H1 2021 % y-o-y EBIT (Operating profit) 5.8 4.5 +28.9% Financial result -0.9 -1.4 -34.7% Income tax -1.6 -1.1 +41.1% Minorities -0.2 -0.2 -3.0% Net income 3.0 1.7 +77.4% Earnings per share 0.05 0.03 +56.6% (EPS) Shareho
Slide 32: Net financial debt at June 30, 2022
Net financial debt at June 30,2022 Leverage ratio improvement in the first six months Net financial debt (NFD) / EBITDA H1 2022 Gross financial debt breakdown evolution (€ million, xEBITDA) Avg. maturity: 4.7 years by source (%) Avg. cost: 2.4% ICO Cofides 6% 1.95x Bank debt 1.90x 6% -2.4 25% -13.1
Slide 33: Progressing in our ESG Strategy
Progressing in our ESG Strategy Environment Social Governance -7% y-o-y Direct GHG emissions Scope 1 +5% y-o-y New female hired vs total hired SCIIF (Control Interno de la Información Financiera) processes started (diagnosis & planning) -5% y-o-y Energy consumption & Scope 2 emissions +2% y-o-y Wome
Slide 34: Outlook for FY 2022
Outlook for FY 2022 ✓ Prevailing strong and dynamic market demand worldwide. LTM June Outlook FY 2021 30, 2022 FY 2022 ✓ Arteche footprint is well positioned ✓ Geographic markets / product portfolio ✓ Revenue 282.0 309.3 325.0 – 340.0 ✓ Market share / sound order intake (Double-digit (€ million) gro
Slide 35: Conclusions
Conclusions 1 2 3 4 5 Sound growth in Transforming our Focus on cash order intake Strength in portfolio through Ongoing flow generation (+50.9% yoy) and revenue together new products commitment to (special focus on revenue (+21.1% with a tight cost and markets ESG that’s inventory yoy) in a context
Slide 36: Investor Relations Office
ARTECHE LANTEGI ELKARTEA, S.A. Investor Relations Office Tel: +34 620 328 643 investors@arteche.com www.arteche.com Q&A
Slide 37: Annex | Alternative Performance Measures (APM)
Annex | Alternative Performance Measures (APM) APM Unit Definition 30 June 2022 FY 2021 30 June 2021 Income at sale €m Revenue +/- Change in stocks at sale price €158.0m = 156.3 + 1.7 €290.5m = 282.0 + 8.5 €132.6m = 129.0+3.6 price Supplies (without depreciations or extraordinary costs) + direct sta
Slide 38: Annex | Key Financial Figures
Annex | Key Financial Figures Key Financial Figures €m 30.06.2022 30.06.2021 % change Revenue 156.3 129.0 +21.1% Direct margin 45.2 41.2 +9.6% Direct margin (% over income*) 28.6% 31.1% -248.0bps EBITDA 13.1 10.7 +23.1% EBITDA margin (% over revenue) 8.4% 8.3% +13bps EBIT 5.8 4.5 +28.9% EBIT margin
Slide 39: Annex | Consolidated Balance Sheet
Annex | Consolidated Balance Sheet Consolidated Balance Sheet €m 30.06.2022 31.12.2021 Non-current Assets 107.4 101.7 Current Assets 198.3 183.6 Inventories 74.5 61.8 Trade and other receivables 71.4 60.4 Cash and cash equivalents 51.7 60.7 Others 0.7 0.7 TOTAL ASSETS 305.7 285.3 Total Shareholders'
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