Arteche Lantegi Elkartea Sa · BME:ART
Arteche Lantegi Elkartea Sa — Investor Presentation (March 2023)
39 slides from Arteche Lantegi Elkartea Sa's investor presentation, March 2023
Slide 1: Arteche Corporate Presentation 2023
Arteche Corporate Presentation 2023 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 accounts of the Company and its Group as of fiscal years 2017 to 2022 audited b
Slide 3: Snapshot of Arteche
Snapshot of Arteche Revenue growth €346m Key financial figures (FY 2022) We are a global designer, >11% CAGR ‘17-’22 manufacturer, integrator and provider of electrical equipment… Focus on renewables >30% Activity of 2022 Rev. … and solutions for the measuring, Attractive operating profitability 9%
Slide 4: Key milestones achieved since our incorporation in 1946
Key milestones achieved since our 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 2022 Revenues by business line Network Reliability 8% Solutions that guarantee the Services that strengthen T&D Grid 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: solid business model
Historical financials: solid business model 7
Slide 9: 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 our 2 leadership position Differentiated 3 Long-term relationship with sect
Slide 10: Positive trends within renewables and transmission & distribution markets
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 11: 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 12: 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 13: 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 14: Long-term relationship with sector-leading clients
3 Long-term relationship with sector-leading clients Utilities >1,500 globally(1) 1 2022 Revenues by 2022 Revenues client type concentration Others, 10% Client A, 10% OEM Client B, 7% Diversified 15% Utilities Client C, 4% customer base 30% Client D, 3% Client E, 3% Distributors Others 25% EPC EPC(2
Slide 15: Industry reference company backed by our outstanding innovation capacity
Industry reference company backed by our outstanding innovation 4 capacity Annual investment in R&D(1) (€m) R&D team with +185 people 11.0 9.7 8.8 9.2 9.3 10.0 Dedicated 5.1 5.7 4.5 4.7 4.9 team sourced +190,000 hours in 2022 in R&D 4.4 with recurrent 4.4 4.7 4.6 5.1 5.9 4.0 investment c.30% of the
Slide 16: Opportunity to accelerate growth through organic and inorganic 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 17: Best-practices in Corporate Governance
6 Best-practices in Corporate Governance Current shareholding structure The Board of Directors Free-float Mr. Alexander Artetxe 15.4% Chairman & CEO Onchena S.L. 5.6% Mr. Lander Mr. José María Arteche Abril Arteche family Executive Other external 52.4% Basque Private Equity Fund (rep. Ziskua Ber S.L
Slide 18: Environmental and Social responsibility plans
Environmental and Social responsibility plans always at the centre of 7 Arteche’s core activities Sustainability Strategic Goals 2030 10 strategic objectives 1 Net-zero carbon Products designed with ecological insulation. 5 strategic lines 100% use of Renewable Digitalization of all processes. 2 Ele
Slide 19: 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 20: FY 2022 Earnings Release
FY 2022 Earnings Release March 23, 2023
Slide 21: 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 accounts of the Company and its Group as of fiscal year 2022 audited by Ernst &
Slide 22: FY 2022 Key highlights
FY 2022 Key highlights Orders grew in the year by +42.6% to €407.3 million, well above market growth. All geographic regions and business segments grew by double digit. Revenue increased by +22.7% to €345.9M. Q4 becomes the first quarter above €100 million of sales. Direct margin improved progressiv
Slide 23: FY 2022 Financial highlights
FY 2022 Financial highlights Order book Revenue Direct EBITDA Profit for NFD/EBITDA Margin(1) the year(2) €407.3m €345.9m €103.0m €30.1m €8.3m 1.63x +42.6% +22.6% +16.0% +15.4% -4.4% at 31vsDecember 1.95x y/y y/y y/y y/y y/y (+17.0% in constant (+10.5% in constant 2021 currency) currency) (1) Direct
Slide 24: FY2022 Guidance Met
FY2022 Guidance Met Guidance Reported Achievement FY2022 FY 2022 Revenue (€ million) 325 - 340 346 EBITDA (€ million) 30 – 35 30 EBITDA Margin 9%-10% 9% (% over revenue) 23
Slide 25: Historical figures: solid business model
Historical figures: solid business model Net debt Revenue (€ million) EBITDA (€ million) (€ million, times EBITDA) 140 6,0 346 5.3 30 30 120 5,0 282 26 255 265 24 26 100 3.8 4,0 22 217 2.9 205 80 2.2 3,0 60 119 2.0 1.6 90 2,0 40 75 66 51 49 1,0 20 0 0,0 2017 2018 2019 2020 2021 2022 2017 2018 2019 2
Slide 26: Revenue grew at double-digit rate in FY 2022
Revenue grew at double-digit rate in FY 2022 Robust growth in all geographical areas Order book (€m,%) Revenue by geographical region(1) (€m,%) +22.6% +42.6% 407.3 345.9 APAC 11% 14% 282.0 +20.7% +54.7% 14% 13% 285.6 14% LATAM +7.2% 11% +37.4% 15% 15% 37% 33% NAM 32% +26.8% 31% +72.4% EMEA +26.0% 40
Slide 27: Revenue growth in all quarters
Revenue growth in all quarters Historical record reached in the fourth quarter Quarterly revenue (€ million) +22.1% +26.2% 103.5 +9.4% +32.8% 86.1 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 26
Slide 28: Positive contribution from all businesses
Positive contribution from all businesses Measurement and Revenue by business division T&D Grid automation monitoring systems Development of new product platforms Maintaining the Top 3 in HV and advancing to the Top 10 in (€m,%) and markets MV +22.6% ✓ End of tests for new protection and control pla
Slide 29: Progressive recovery of the direct margin during FY2022
Progressive recovery of the direct margin during FY2022 Revenue growth offsets adverse cost inflation environment Direct margin(1) by quarter Direct margin evolution ( €m, % of income at (% of income at selling price(2)) selling price) +2.6 32.1% +15.4 31.1% +327pbs 31.1% 29.7% 30.1% 30.0% +4.9 103.
Slide 30: EBITDA FY 2022 Growth of 15.4% in the year
EBITDA FY 2022 Growth of 15.4% in the year EBITDA evolution year on year ▪ EBITDA increased as a result of higher sales (€ million,% of revenue) volume, updated sales prices and plant 8.7% productivity improvements, in a global scenario of +15.4% 30.1 9.3% rising material and logistics costs and sup
Slide 31: Profit for the year reached €8.3 million
Net profit FY 2022 Profit for the year reached €8.3 million In € million FY 2022 FY 2021 % y-o-y EBIT (Operating profit) 14.3 12.5 +14.4% Financial result -3.5 1.3 n.a. Income tax -2.5 -5.1 -52.2% Profit for the year(1) 8.3 8.7 -4.4% Minorities -0.6 -0.2 +271.3% Profit attributable to parent company
Slide 32: Net financial debt at December 31, 2022
Net financial debt at December 31,2022 Leverage ratio improvement in FY 2022 Net financial debt (NFD) / EBITDA FY 2022 Gross financial debt breakdown evolution (€ million, times EBITDA) by source (%) Avg. maturity: 4.3 años Avg. cost: 3.5% 1.95x 15% Bank debt -30.1 1.63x 19% +2.6 +1.6 +2.9 5% +2.9 +
Slide 33: Progressing in our ESG Commitment
Progressing in our ESG Commitment Arteche signs with BID Invest(1) the first reverse factoring sustainable line amounting to USD 20m. Electrical & ✓ Positive impact on production plants in Mexico (30% of the Electrical & electronic electronic Group's total revenue). equipment equipment ✓ Arteche is
Slide 34: Progressing in our ESG Commitment
Progressing in our ESG Commitment Strategic Target Indicator Unit Real 2022 Target 2030 100% of our products designed with ecological and Product ranges with ecological- biodegradable fluid insulation solution / # 74% 100% biodegradable fluid insulators Total product ranges (%) Total emissions (scop
Slide 35: Conclusions 2022 and Outlook 2023
Conclusions 2022 and Outlook 2023 CONCLUSIONS FY 2022 OUTLOOK FY 2023 Strength in Focus on cash Sound growth in revenue together flow generation ✓ Direct margin recovered at orders (+42.6% with a tight cost (special focus on Our record order backlog pre-crisis levels. y/y) and revenue management inv
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 FY 2022 FY 2021 Income at €m Revenue +/- Change in stocks at selling price €347.5m = 345.9 + 1.6 €290.5m = 282.0 + 8.5 selling price Supplies (without depreciations or extraordinary costs) + direct staff €244.5m = 197.3 + 28.5 + €201
Slide 38: Annex | Key Financial Figures
Annex | Key Financial Figures Key Financial Figures €m 31.12.2022 31.12.2021 % change Revenue 345.9 282.0 +22.6% Direct Margin 103.0 88.8 +16.0% Direct margin (% of income at selling price(1)) 29.7% 30.6% -92.0pbs EBITDA 30.1 26.1 +15.4% EBITDA margin (% of revenue) 8.7% 9.3% -54.4pbs EBIT 14.3 12.5
Slide 39: Annex | Consolidated Balance Sheet
Annex | Consolidated Balance Sheet Consolidated Balance Sheet €m 31.12.2022 31.12.2021 Non-current Assets 108.7 101.7 Current Assets 210.7 183.6 Inventories 72.2 61.8 Trade and other receivables 78.4 60.4 Short-term financial investments 3.3 2.0 Cash and cash equivalents 56.2 58.7 Others 0.6 0.7 TOT
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