Arbonia Ag · SIX:ARBN
Arbonia — H1 2023 Earnings Presentation
28 slides from Arbonia's earnings presentation, Aug 22, 2023
Slide 1: H1 results 2023
H1 results 2023 Alexander von Witzleben, Executive Chairman Daniel Wüest, Group CFO
Slide 2: Overview HY 2023 – Key metrics (CHF M)
Overview HY 2023 Key metrics (CHF M) Net revenues EBITDA1 Net debt/cash EBITDA margin Leverage Ratio -3.2% 11.4% 8.3% 7.9% 0.6x 1.6x 2.3x -9.6% 631 -32.7% 589 570 -13.8% 241 184 67 52 45 68 H1 H1 H1 H1 H1 H1 06 12 06 2021 2022 2023 2021 2022 2023 2022 2022 2023 Net revenues in CHF down by 9.6% Despi
Slide 3: H1 2023 in context
H1 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 rising interest rates making returns on new real estate investments unattractiv
Slide 4: Destocking and volume developments
1 Destocking and volume developments Steel panel radiators and interior doors German SPR1 market (in M units) • Overstocking in the German market during 2021, CAGR -2% with ~20% higher volumes in some months vs. 2020, -21% annualised ~5% higher volumes +7% 3 -30% • The number of completed flats decr
Slide 5: Development of electricity consumption and cost
2 Development of electricity consumption and cost Cost of electricity Electricity consumption in CHF M in M kWh 40 100 ~ -12 M SoP of 2 CHP1 plus additional PV 90 80 30 ~ +16 M 70 60 20 50 ~ -5 M ~ +8 M 40 ~ -0.5 M 30 10 20 10 0 0 2021 2022 2023e 2024e 2025e 2026e Electricity costs Electricity use S
Slide 6: Accelerated cost reduction – focus on cash flow
3 Accelerated cost reduction – focus on cash flow Relocation of design radiator production and other measures Concentration design radiator production Closure of design radiator production in Dilsen (BE) • To improve utilisation and productivity, the production and painting of design radiators will
Slide 7: Agenda
Agenda 1. Group results H1 2023 2. Divisions in H1 2023 and outlook 3. Construction environment Questions H1 results 2023 | 22 August 2023 7
Slide 8: Income Statement – without one-time effects
Income Statement Without one-time effects In CHF M H1 2023 in % H1 2022 in % I Revenues (-9.6%) Net revenues down due to double- Net revenues 570.4 I 100.0 630.9 100.0 digit volume decline in certain product Cost of material and goods -268.6 -47.1 II -324.4 -51.4 categories (radiators, interior door
Slide 9: Income Statement – as reported (CHF M)
Income Statement As reported (CHF M) In CHF M H1 2023 in % H1 2022 in % I Revenues I Net revenues not impacted by one- Net revenues 570.4 100.0 630.9 100.0 time effects Cost of material and goods -268.6 -47.1 II -324.4 -51.4 II Cost base II Personnel expenses -175.2 -30.7 -185.9 -29.5 CHF 0.3 M pers
Slide 10: Net revenues – Performance by Group and Divisions
Overview H1 2023 Performance by Group and Divisions CHF M1,2 -3.2% Net revenues -9.6% -0.7% -5.7% 589 631 570 -12.1% -6.5% 305 345 303 282 284 266 0 H1 2021 H1 2022 H1 2023 H1 2021 H1 2022 H1 2023 H1 2021 H1 2022 H1 2023 (incl. margin) -32.7% -14.1% -47.4% EBITDA -13.6% +3.8% -30.0% 67.2 52.4 45.3 4
Slide 11: EBITDA Bridge H1 2022 to H1 2023
EBITDA Bridge H1 2022 to H1 2023 Arbonia Group1 Amounts in CHF M -13.6% 52.4 45.3 -7.1 M EBITDA SPI SVI MCC SI PI ECC Residual FX-Effect Corporate EBITDA H1 2022 Services H1 2023 1) 2) 3) 4) 5) 6) 7) 8) 9) Explanations: 1) SPI - Sales-Price-Increase 6) ECC - Energy-Cost-Change 2) SVI - Sales-Volume-
Slide 12: Net revenues by Division and Region
Net revenues by Division and Region Only marginal changes in revenue split by Division and Region Net revenues by Division Net revenues by Region 13% (12%) 6% (8%) 46% 54% 6% 48% (8%) (45%) (55%) (50%) 12% (9%) 15% (13%) Climate Doors Germany Eastern Europe1 Switzerland Benelux Southern Europe2 RoW
Slide 13: Overview organic revenue growth HY 2021-2023
Overview organic revenue1 growth HY 2021-2023 In CHF M Arbonia Group 3.7% • Double-digit percentage decline in volume in combination -8.1% with positive price effects led to negative organic growth of -8.1% on Group level • Negative FX effect of c. -4% and positive acquisitions effect of c. 2% • How
Slide 14: Cash flow statement
Cash flow statement In CHF M I Cash flow from operating activities • Cash flow from operating activities turns positive in H1 +80.6 M 2023 mainly due to lower seasonal increase of NWC … 50 12.0 • …despite lower operational performance compared to 0 H1 2022 -25.8 -68.6 • Further positive NWC effect e
Slide 15: Focus on cash flow
Focus on cash flow Operational performance and reduction of net working capital will lead to substantial positive cash flows 200 Cash flow development H1 FY 2023 120 150 100 80 100 60 45 40 -27 50 45 20 H1 0 -40 0 EBITDA Δ oper. NWC Capex oper. CF FCF -20 -40 -22 -28 EBITDA Δ oper. NWC Capex oper.
Slide 16: Net debt as of June 2023
Net debt as of June 2023 In CHF M 250 241 12.6x 25 11.7x 10.8x 200 9.9x I Net debt 184 9.0x • Increase of CHF 57 M mainly due to capex 22 (CHF 40 M) and dividend payment (CHF 20 M) 8.1x 150 7.2x 6.3x II Leverage ratio 5.4x • Leverage ratio with 2.3x temporarily too high 216 100 4.5x • Measures defin
Slide 17: Agenda
Agenda 1. Group results H1 2023 2. Divisional highlights Divisions in H1 2023 H1 2023 and outlook 3. Construction environment Questions H1 results 2023 | 22 August 2023 17
Slide 18: Divisions in H1 2023 and outlook – Climate Division
Divisions in H1 2023 and outlook Climate Division (former HVAC) Overview in M CHF Expansion of heat pump factory in CZ 8.0% 9.4% 345.0 303.3 27.6 28.6 H1 2022 H1 2023 Start of construction Start of production Net revenue EBITDA1 EBITDA margin1 H1 2023 H1 2024 The heat pump radiator Additional market
Slide 19: Divisions in H1 2023 and outlook – Doors Division
Divisions in H1 2023 and outlook Doors Division Overview in M CHF Completed and upcoming projects 10.7% 8.0% 284.2 265.6 30.3 21.2 H1 2022 H1 2023 Net revenue EBITDA EBITDA margin • High level of automation allowed swift reduction of shifts, • Logistics hub in Roggwil offering best in class delivery
Slide 20: Agenda
Agenda 1. Group results H1 2023 2. Divisions in H1 2023 and outlook 3. Construction environment and outlook Questions H1 results 2023 | 22 August 2023 20
Slide 21: 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 22: German housing construction
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 Building permits Building completions Building permits Multi-fa
Slide 23: German housing market
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 +35% 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 24: Unlocking demand in new construction and renovation
Unlocking demand in new construction and renovation At current building and financing costs rents have to climb to EUR 22 per m2 to make investments in real estate financially attractive again in Germany ROE 15% Simulation 10% Scenario I (inverted yield curve) 5% Scenario II (continuing interest rat
Slide 25: Thank you
ARBONIA @ Thank you
Slide 26: Back-up
ARBONIA @
Slide 27: Well positioned for release of pent-up demand
Well positioned for release of pent-up demand Climate Doors 1. Well positioned in key European HVAC markets 1. Arbonia Doors with its brands (Prüm, Garant, Joro, Kermi, RWD Schlatter, Bekon-Koralle, Invado) has a 2. Portfolio in residential and commercial sector perfect market leading position in th
Slide 28: Thank you
ARBONIA @ Thank you