Arbonia Ag · SIX:ARBN
Arbonia — Investor Day (December 2023)
57 slides from Arbonia's investor day presentation, Dec 6, 2023
Slide 1: Capital Markets Day 2023
Capital Markets Day 2023 Prüm, Weinsheim 6 December 2023
Slide 2: Capital Markets Day Programme
Capital Markets Day Programme 9.00 – 9.15 am Introductory remarks & market update Daniel Wüest, Group CFO 9.15 – 9.45 am Climate Division Alexander Kaiss, CEO Climate Division 9.45 – 10.30 am Doors Division Claudius Moor, CEO Doors Division 10.30 – 10.45 am Summary & outlook Daniel Wüest, Group CFO
Slide 3: 2023 in context
2023 in context Overall slow-down in (German) construction industry due to • high level of and slowly decreasing material prices have lead to high construction costs, while rents remained moderate • high inflation and elevated interest rates making returns on new real estate investments unattractive
Slide 4: Destocking and volume developments
Destocking and volume developments Steel panel radiators and interior doors German SPR1 market (in M units) • Overstocking in the German market during 2021, with CAGR -2% ~20% higher volumes in some months vs. 2020, -21% annualised ~5% higher volumes +7% 3 -30% • The number of completed flats decrea
Slide 5: Agenda
Agenda 1. Transformation Strategy of the Climate Division highlights 2018 2. Strategy of the Doors Division 3. Summary & outlook 4. Q&A Capital Markets Day 2023 | 6 December 2023 5
Slide 6: Alexander Kaiss – CEO ARBONIA climate
Alexander Kaiss – CEO ARBONIA climate Diploma in Mechanical Engineering, TU Munich, Germany Chief Executive Officer Alexander Kaiss has been with the Arbonia Group since 2001. He held positions including plant manager and COO before being appointed CEO of the ARBONIA climate division in 2021 Capital
Slide 7: Agenda
Agenda Strategic Position Strategic Initiatives Financials / Strategic Outlook Capital Markets Day 2023 | 6 December 2023 7
Slide 8: Strategic Position: Solid growth with attractive margins
1. Strategic Position Solid growth with attractive margins even in very challenging periods Ambition 2026 M&A ► Net revenue > CHF 800M 555 631 646 ► EBITDA 506 529 408 > CHF 100M Net revenues (in CHF M) ► EBITDA Margin Growth 23.8% 9.7% -4.6% 19.2% 2.5% > 12.5 % org. Growth11 5% 2.5% -0.4% 16.1% 7%
Slide 9: ARBONIA climate at a glance
1. Strategic Position ARBONIA climate a glance NR 2022 EBITDA 20221 FTE 2022 CHF 646M CHF 59M (9.2%) 3,239 Europe Radiators Europe2 Fan Coils Europe3 Broadest system supplier TOP 2 ~ 15-20% market share/TOP 1 NR by product Production footprint Battery Heat pump Radiators Underfloor Net revenue heati
Slide 10: The broadest range of smart solutions for a sustainable future
1. Strategic Position The broadest range of smart solutions for a sustainable future Ready for the energy transition: heat pumps Pleasant warmth and coolness in any room: fan coils Using renewable energies ecologically: battery storage Good air throughout the building: air handling units Energy-effi
Slide 11: ARBONIA climate house
1. Strategic Position ARBONIA climate house Residential Commercial air handling unit tube radiator fan coil residential radiant ceiling panel decentral fan coil clean room ventilation engineering electric radiator fan coil wall unit underfloor heating radiant ceiling profile central battery heat cas
Slide 12: European production footprint
1. Strategic Position European production footprint Plattling, DE: SPR Stribro, CZ: special rads, Opocno, CZ: heat pumps 66,700 m2 batteries – 50,000 m2 9,500 m2 Legnica, PL: design rads Kladovo, RS: commercial 17,500 m2 ventilation – 4,500 m2 specialized production network with state-of-the-art tec
Slide 13: Strategic Position
1. Strategic Position Unique competence profile for optimized integrated systems and a clear organization with regional responsibilities, supplemented with matrix functions Focused on growth markets with the right products: energy-efficient buildings We create Extensive R&D competences efficiently o
Slide 14: Agenda
Agenda Strategic Position Strategic Initiatives Financials / Strategic Outlook Capital Markets Day 2023 | 6 December 2023 14
Slide 15: Six growth cases secure net revenue growth
2. Strategic Initiatives Six growth cases secure net revenue growth Annual cost reduction Net revenue growth – EUR 4M mid 2024 EUR 300M until 2028 Relocation Business Case Radiator Business Case Growth Strategy Residential Production Battery Storage Iberian Peninsula Ventilation Dilsen, BE Growth St
Slide 16: Relocation Radiator Production Dilsen, BE
Relocation Radiator Production Dilsen, BE Capital Markets Day 2023 | 6 December 2023 16
Slide 17: Relocation Radiator Production
2. Strategic Initiatives: Relocation Radiator Production On track to further increase operational excellence in Central Europe Production footprint Closure of design radiator production BE • To improve utilisation and productivity, production and painting of design radiators will be moved to Stříbro
Slide 18: Heat Pumps
Heat Pumps Capital Markets Day 2023 | 6 December 2023 18
Slide 19: Key growth pillars of heat pump business case
2. Strategic Initiatives 2023: Heat Pumps Key growth pillars of heat pump business case Infrastructure & Products Markets & customers additional capacities • Solid and complete product • Opočno I completed & operational • Solid business nucleus in DACH portfolio available from 6-20 kW with new 3rd p
Slide 20: Market development Steel Panel Radiators Germany
2. Strategic Initiatives 2023: Heat Pumps Market development Steel Panel Radiators Germany 2015 – 2030 German sales / demand forecast until 2045 (in k units)1 Upwards correction of estimates in 2020 Heat pump sales forecast according to industry -1.3% +14.2% 940 990 915 915 915 940 930 920 910 900 9
Slide 21: State-of-the-art factory Opočno
2. Strategic Initiatives 2023: Heat Pumps State-of-the-art factory Opočno Capital Markets Day 2023 | 6 December 2023 21
Slide 22: Fan Coils
Fan Coils Capital Markets Day 2023 | 6 December 2023 22
Slide 23: Very strong position in fan coils
2. Strategic Initiatives: Fan Coils Very strong position in fan coils should allow for good growth Rationale / Market Europe Plant Sabiana IT • Sabiana, 20% market share in fan coils in Europe, • Sabiana is Europe’s largest fan coil producer consolidation ongoing ~100% Rough estimates: ~10% Imports
Slide 24: Battery Storage
Battery Storage Capital Markets Day 2023 | 6 December 2023 24
Slide 25: Battery Storage: Leveraging operational setup from 2024
2. Strategic Initiatives: Battery Storage Leveraging operational setup from 2024 onwards Redox flow battery Forecast Key facts • Sustainable battery with Redox Flow technology and recyclable Market Launch electrolyte1, no use of rare earths, non-flammable 15 kWh battery • No degeneration: capacity s
Slide 26: Storac evolution – larger sizes with more capacity
2. Strategic Initiatives: Battery Storage Storac evolution – larger sizes with more capacity Storac 2/6 1 Storac 4/10 (4/15) 2 Storac 10/40 3 • 6 kWh capacity • 10 kWh; (15 kWh) capacity • > 40 kWh capacity • 2 kW power • 4 kW power • 10 kW power • 2 x 150 l electrolyte • 2 x 280 l (2 x 420 l) elect
Slide 27: Residential Ventilation
Residential Ventilation Capital Markets Day 2023 | 6 December 2023 27
Slide 28: Residential Ventilation
2. Strategic Initiatives: Residential Ventilation Summary Countries served Strong market growth in nearly all countries • Increase of German new construction market expected (high demand of living space) • Possibility of obligatory ventilation in PL, NL etc. • Indoor air quality gains importance in
Slide 29: Commercial Ventilation
Commercial Ventilation Capital Markets Day 2023 | 6 December 2023 29
Slide 30: Deepening our skills in industrial clean air
2. Strategic Initiatives: Commercial Ventilation Deepening our skills in industrial clean air to unlock new growth Summary Products • Offering range from "Air Handling Units (AHUs)" to fully • Cleanrooms allow to set and control air parameters, functional cleanrooms such as pressure and humidity • F
Slide 31: Iberian Peninsula
Iberian Peninsula Capital Markets Day 2023 | 6 December 2023 31
Slide 32: Iberian distribution business with Cirelius
2. Strategic Initiatives: Iberian Peninsula With Cirelius, our Iberian Distribution business has reached an attractive size Iberian logistic hub in Madrid, ES Our Iberian distribution business is well prepared with Cirelius • Tecna / Britec (ES) strong in commercial segment and Porto Tecna • Cireliu
Slide 33: Agenda
Agenda Strategic Position Strategic Initiatives Financials / Strategic Outlook Capital Markets Day 2023 | 6 December 2023 33
Slide 34: Ambition 2026
3. Financials / Strategic Outlook Ambition 2026 ► Net revenue > CHF 800M ► EBITDA > CHF 100M We create superior indoor climate solutions ► EBITDA Margin for future generations > 12.5 % ► Backed by various projects for revenue growth and profitability Capital Markets Day 2023 | 6 December 2023 34
Slide 35: ARBONIA climate following the megatrends
3. Financials / Strategic Outlook ARBONIA climate following the megatrends CO2-REDUCTION & HEALTHY INDOOR SUSTAINABILITY CLIMATE energy efficiency indoor air quality climate protection humidity energy independence temperature HOUSING DIGITAL SHORTAGE TRANSFORMATION social housing cus
Slide 36: Agenda
Agenda 1. Strategy of the Climate Division 2. Strategy of the Doors Division 3. Summary & outlook 4. Q&A Capital Markets Day 2023 | 6 December 2023 36
Slide 37: Doors Division Claudius Moor
Doors Division Claudius Moor 2015 – today Arbonia Group 2020 – today Arbonia Group Member of Group Management CEO Doors Division 2023 – today Griffwerk Member of the Advisory Board 2018 – today KIWI Member of the Advisory Board (Chairman as of 2020) 2019 – 2023 Prüm-Garant Managing Director Sales &
Slide 38: Doors Division Starting point 2022
Doors Division Starting point 2022 CHF CHF 2.3 M +5% 553 M 62 M Net revenues # of wooden doors Organic growth CAGR EBITDA (2022) sold (2022) (2019-2022) (2022)1 Whereof CHF 399 M Based on market At stable double digit Produced in 4 market from Wood Solutions penetration, product EBITDA margins leadi
Slide 39: Building a Central European Leader
Doors Division Building a Central European Leader Acquisition Profile Prüm, Capacity Beginning Integration of Acquisition Mile- of Looser Systems Garant, expansion of ERP Glass Solutions of Joro stones (Closing disposed Invado fully started to harmonisation incl. acquisition Dec. 2016) H2 2017 integ
Slide 40: Doors Division Highlights
Doors Division Highlights Market leadership in Central Europe by integrated premium door brands protected by high barriers 1 to entry Long-term positive market prospects for housing construction driven by housing 2 supply-demand imbalance and continuously growing number of buildings for renovation A
Slide 41: Market leadership in Central Europe: Wood Solutions
Market leadership in Central Europe 1 Wood Solutions Business Unit Production footprint 2 Geographical focus Core markets • Weinsheim (DE), 760 FTE Export markets • 1 M doors/year No. Market position 1 %. Revenue BU Wood No. 2 Production site 63% • Ichtershausen (DE), 570 FTE • 0.7 M doors/year No.4
Slide 42: Market leadership in Central Europe: Glass Solutions
1Market leadership in Central Europe Glass Solutions Business Unit Production footprint Geographical focus Core markets • Plattling (DE), 610 FTE Export markets • 25'000m2 production plant No. Market position 1 • Local sales companies in PL, CZ, CN %. Revenue BU Wood Production site Local sales offi
Slide 43: Premium door brands protected by high barriers of entry
1 Market leadership in Central Europe Premium door brands protected by high barriers of entry Clear market leadership across products Integrated products and service solutions Protected by high structural underpinned by long established companies address customer challenges barriers of entry >300 ye
Slide 44: Gaining market shares in Germany
Market prospects 2 Gaining market shares in Germany Building completions in Germany Doors sold by Prüm-Garant Number of flats (in thousands) Number of doors +0.7% +3.5% +19% +4% 306′376 295′300 293′393 293′002 287′352 284′816 1.8 1.8 1.8 1.5 1.5 1.6 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020
Slide 45: Germany: Market outlook
Long-term positive market prospects 2 Germany: Market outlook New Construction Number of completed residential buildings German population grew 1.1m in 2022 and is expected to continue growing Additionally, average living space per person is steadily increasing On top, residential building completio
Slide 46: Current decline of German market
Market prospects 2 Current decline of German market Production volume interior wooden doors Production volume interior wooden doors of German door producers1 of Prüm-Garant Number of doors (M) Number of doors (M) -19% -21% 0.9 -22% 2.2 4.4 -18% 2.1 0.8 2.0 -0.91 Garant 1.8 1.7 3.5 1.7 Prüm Q1 Q2 Q3
Slide 47: Arbonia is well positioned to benefit from megatrends
3Addressing the mega trends Arbonia is well positioned to benefit from megatrends that are currently reshaping the market Supporting mega trends New living Impact of Ageing Sustainability trends PropTech population Recent changes in living Tech-enabled hardware ~75% of EU buildings are Demographic a
Slide 48: Platform for growth: Selected opportunities
Platform for growth 4 Selected opportunities Selected growth potentials Germany: Growing market segments Switzerland: Increase market shares in W-CH Wholesale Project business DIY German speaking2 French speaking <10% <5% <10% >25% ~25% ~650M1 ~500M1 ~200M1 ~250M1 ~70M1 Wholesale business • Set-up o
Slide 49: Digital outrider: Selected initiatives
5Digital outrider Selected initiatives Selected digital initiatives System: ERP harmonisation Digitalisation of production planning (MES) MES: Production planning in SAP S/4 HANA Machinery (Industry 4.0) real time Lead time reduction! Platform for digital sales processes Products: SmartDOORS - 49% s
Slide 50: Cost leadership: Selected initiatives
Cost leadership 6 Selected initiatives Selected cost leadership initiatives Integrated Arbonia Doors Platform New frame production site at Prüm - Economies of scale: capacity increase of 35% - Start of mass production: H2 2023 Factory 4.0 Vertical integration New door production site at Invado Insou
Slide 51: Sustainability: In everything we do
10Sustainability In everything we do Selected Initiatives Two new combined heat and power plants at the production sites in Germany, pursuing 100% use and pollution free-disposal of Responsibility wood-type residue Compliance and Health and Transparency Safety Invested heavily in energy-efficient ES
Slide 52: Agenda
Agenda 1. Strategy of the Climate Division 2. Strategy of the Doors Division Summary 3. Group & outlook strategy 4. Q&A Capital Markets Day 2023 | 6 December 2023 53
Slide 53: Demand for new flats steadily increasing
Demand for new flats steadily increasing Developments in the German housing market1 Population forecast before migration of Baseline Ukrainian refugees (in M)2 • Completions of new flats reached just 295k units in 2022, compared to a 88 demand of ~400k annually 86 • The backlog of building permits f
Slide 54: German housing construction: Permits and completion of flats
German housing construction Permits and completion of flats Permits and completions per year1 Permits per month1 (in thousands) (in thousands) 400 40 354 300 295 30 200 20 100 10 0 0 06 08 10 12 14 16 18 20 22 21 22 Jan 23 Mar 23 May 23 Jul 23 Sep 23 Building permits Building completions Building pe
Slide 55: German housing market: High demand for housing and energy savings
German housing market High demand for housing and energy savings Components of rental costs (indexed)1 Credit checks vs. new mortgages2 (in percent) 200 100 +34% 150 50 100 0 20 21 22 23 24 50 -50 20 21 22 23 24 Rent Ancillary costs Energy Credit checks from apartment seekers New mortgages • High de
Slide 56: Confirmation of mid-term guidance 2026
Confirmation of mid-term guidance 2026 Adjusted for FX Financial per CMD 2021 per CMD 2023 Annual organic growth (CAGR 2021 – 2026) > 5% p.a. > 3.5% (> 5%)1 Group EBITDA (excluding M&A) > CHF 200 M > CHF 170 M 2 Capex in % of revenues (maintenance and growth) 4-5% < 4% Cash Conversion Ratio (FCF in
Slide 57: Thank you
ARBONIA @ Thank you