Slide 1: 2024 H1 results
2024 H1 results 5th September 2024
Slide 2: Executive Summary – H1 2024
Executive Summary – H1 2024 Improving EBITDA and Net Debt Amid Soft Markets Economics Financials Strategy • In H1-24, sales • Leverage at 1.48x • Focus on operating decreased by 7.5%, EBITDA adj LTM, improvements at FX constant -6.5% despite seasonality in through (-5.9% volume and mix, NWC (2.04x o
Slide 3: H1-24 Financial Highlights
H1-24 Financial Highlights Tough comparison with H1-23 € millions H1 2023 H1 2024 Q2 2023 Q2 2024 2023 FY LTM Sales 320.3 296.4 168.9 154.5 617.3 593.3 Growth % 0.6% -7.5% -0.4% -8.5% -0.2% -4.4% EBITDA reported 41.8 43.0 22.7 23.3 78.8 80.0 EBITDA % 13.1% 14.5% 13.4% 15.1% 12.8% 13.5% EBITDA adjust
Slide 4: Achieved in 2021 and 2022 the growth expected in 2023 and 2024
Achieved in 2021 (+22.6%) and 2022 (+25.7%) the growth expected in 2023 and 2024 CAGR = 7.8% CAGR = 11.9% CAGR = -11.5% CAGR = 15.4% 4
Slide 5: H1 24 – Revenues Breakdown
H1 24 – Revenues Breakdown Amid volatile markets, benefits from diversification Products H1 23 % H1 24 % ∆% € 000 Heat Exchangers 169,7 53,0% 135,7 45,8% -20,0% Air Cooled Equipment 141,8 44,3% 148,8 50,2% 4,9% Glass Doors 8,0 2,5% 8,3 2,8% 2,8% Total sales of products 319,6 99,8% 292,8 98,8% -8,4%
Slide 6: Sales by application and market
Sales by application and market Benefit of Diversification of Applications • Sales analysis is heavily influenced by the tough comparison with the second quarter of 2023, the best quarter ever in terms of sales • SBU components -19%: • Excluding HP sales decreased by 3% • Demand recovery for mobile
Slide 7: EBITDA Bridge Analysis H1-24 vs H1-23
EBITDA Bridge Analysis H1-24 vs H1-23 • Record EBITDA in H1-24, despite strong growth of EBITDA in the last 3 years (+ 76%) and volatile markets • Steady growth of EBITDA margin quarter by quarter since H2 -23 • No NRI in H1-24. In H1-23 NRI due to start-up costs of the former ACC plant (1) Due to r
Slide 8: H1-24 From EBITDA to Group Net Income
H1-24 From EBITDA to Group Net Income EBIT adjusted – Net Income Adjusted € millions 2022 2023 H1-23 H1-24 EBITDA reported 75.1 78.8 41.8 43.0 • D&A decreased due to delayed NRI EBITDA adjusted 3.7 78.8 1.3 80.1 0.7 42.5 43.0 capex • In Q1-22 capital gain on D&A 32.7 32.4 16.3 15.6 Gain (loss) of no
Slide 9: Impact of IFRS on Interest Costs
Impact of IFRS on Interest Costs € millions 2022 2023 H1-23 H1-24 Cash interest cost (4,9) (11,8) (5,6) (8,4) Cash interest income 2,0 5,5 2,3 4,7 Net realized FX gain (cost) (1,2) 2,0 0,5 (0,1) Net cash financial costs (A) (4,1) (4,3) (2,8) (3,8) Derivatives fair value 14,4 (7,7) 0,1 (0,4) Amortiza
Slide 10: Adjusted net income Bridge Analysis H1-24 vs H1-23
Adjusted net income Bridge Analysis H1-24 vs H1-23 (1) Due to rounding, numbers presented throughout this chart may not add up precisely to the totals provided (2) Source: management analysis of consolidated results as of 30/6/2024 10
Slide 11: TNWC back toward M/LT Guidance
TNWC back toward M/LT Guidance 30/06/2023 Days 31/12/23 Days 30/06/2024 Days € Millions Stock 132,4 77 110,8 65 117,1 71 A/receivable 117,3 68 87,8 51 115,0 70 Working capital 249,7 198,6 232,0 A/payable 116,7 106 95,7 90 126,2 125 Net working capital 133,0 77 103,0 60 105,8 64 % on net sales LTM 21
Slide 12: Net cash generation adjusted
Net cash generation adjusted LTM June 24: +63% vs 2023 Net cash / (net debt) €m Accelerated capex program above maintenance level Net financial position as of June 2023 ( 160,2) In 2022 and 2023 temporary working capital increase Net financial position as of June 2024 ( 118,9) due to higher safe
Slide 13: Balance Sheet and Capital Allocation
Balance Sheet and Capital Allocation • In H1-24 cash flow from operations at 12.9% of sales (9.2% in H1 23 + 29.5%) • LTM net cash generation adjusted equal to €72.2 M (+ 63% vs June 23) • Due to rounding, numbers presented throughout this chart may not add up precisely to the totals provided • Sour
Slide 14: Future Developments and Closing Remarks
Future Developments and Closing Remarks • Focus on Datacenter and Industrial Projects • Focus on automation, process optimization and cost reduction • Focus on supply chain optimization Strategy • Further product range rationalization • Second stage of plant expansion in China and US • New capex rev
Slide 15: Annexes
Annexes 15
Slide 16: Income Statement as of 30/6/2024
Income Statement as of 30/6/2024 Consolidated Profit & Loss H1-23 % H1-24 % Delta % Reclassified (000 Euro) Sales and operating income 320.300 100,0% 296.382 100,0% -7,5% Purchases of materials (165.667) -51,7% (150.086) -50,6% Inventory increase (decrease) (688) -0,2% 5.019 1,7% Services (42.905) -
Slide 17: Balance Sheet as of 30/6/2024
Balance Sheet as of 30/6/2024 Consolidated Balance Sheet % net invested % net invested % net invested 30/06/2023 capital 31/12/2023 capital 30/06/2024 capital Reclassified (000 Euro) Net intangible assets 95.207 92.863 91.251 Net tangible assets 198.170 205.412 207.561 Pre-paid taxes 8.764 11.039 11
Slide 18: Short company profile
Short company profile
Slide 19: Business Highlights
Business Highlights Business Unit Products % of Sales Applications Type of Customer (1) Heat exchangers • Refrigeration (food cold chain) • Commercial air conditioning and 50% ventilation OEM • Special applications (whitegoods, Business Unit “mobile applications” etc.) Components Glass doors for ref
Slide 20: Diversification to Avoid Cyclicality
Diversification to Avoid Cyclicality Diversified applications, segments and markets with uncorrelated business cycles Focus on markets with expected high potential growth Business growth sustained by megatrends 20 20
Slide 21: Seculars Trends Increase the Addressable Market
Seculars Trends Increase the Addressable Market Cold chain and Urbanization & refrigeration consumer habits Electrification (heat pumps / Global warming district heating) Digitalization Regulations (F-gas etc.) (data centers, IOT) Food safety Safety in supply chains Decarbonization Air treatment & v
Slide 22: Secular Trends Increase total Addressable Market
Secular Trends Increase total Addressable Market Drivers and trends What LUVE does Acceleration of the transition to “green capex” by major • LUVE was a first mover in green customers to: technologies applied to heat exchangers • Adopt refrigerants with low GWP • Currently, ≈ 53.5% of sales are alre
Slide 23: Track Record of Profitable Organic Growth and Acquisitions
Track Record of Profitable Organic Growth and Acquisitions 23 23
Slide 24: Strategy
Strategy Create sustainable competitive advantage through: Product focus and innovation Technology enhancements Production plants efficiency and flexibility First mover in "green tech" Reduce risk profile through: Widening product applications in uncorrelated sectors Increasing internati
Slide 25: LU-VE's Medium Term Value Creation Framework
LU-VE’s Medium Term Value Creation Framework • High Single Digit growth in sales volume (organic) • EBITDA margin toward 14/15% thanks to scale and efficiency capex • NWC on sales: Mid Double Digit (net of extraordinary fluctuation) • Growth capex: € 20/30 m p.a. • Tax rate: 20-21% • ESG targets in
Slide 26: Pillars of a Sustainable Competitive Advantage
Pillars of a Sustainable Competitive Advantage Sources LU-VE business model Technological • Patent and tech innovation Advantage • Leadership in R&D: laboratories / CFD / nanotechnologies / IOT • Market leadership: ca. 50% (1) of sales are in market segments where Lu-Ve is market leader Cost advanta
Slide 27: Years of experience in heat exchanger technology
aver 600 YEARS OF EXPERIENCE IN HEAT EXCHANGER TECHNOLOGY, =< Lo (=7) oO = q E E 27
Slide 28: Organization: Production Units
Organization: 20 Production Units Italy Finland 34 SALES COMPANIES Poland India • AUSTRIA – VIENNA • BENELUX – BREDA-UCCLE • CHINA – TIANMEN-CHANGZHOU • CZECH REPUBLIC - NOVOSEDLY • DENMARK - AARHUS • FINLAND - VANTAA • FRANCE - LYON • GERMANY – STUTTGART • Over 1.080.000 sqm. total surface area (30
Slide 29: Metal Price Impact on Profitability
Metal Price Impact on Profitability Metal influence on Sale contract Main application Metal fluctuation management product price Frame contracts Mainly in the Mechanical price • Price adjusted through formulas linked to Components SBU adjustment through metal publicly available quotation (average fo
Slide 30: The Pricing Power in 2021
The Pricing Power in 2021 H1 + H2 2021 30
Slide 31: The Pricing Power in 2022
The Pricing Power in 2022 EBITDA FY 2022 vs 2021 + 29.6% • EBITDA adjusted grew by 29.6% thanks to volumes increase and pricing power • In 2022, non-recurring items are M&A transaction costs and extraordinary bonuses to employees (no adjustments in 2021) (1) Due to rounding, numbers presented throug
Slide 32: EBITDA 2023 Bridge Analysis
EBITDA 2023 Bridge Analysis FY 2023 vs 2022 = + 1.7% FY 2023 vs 2018 = + 108.6% • EBITDA adjusted grew by 1.7% thanks to cost savings • In 2023, non-recurring items are new plant in Belluno start-up costs and extraordinary contribution to flooded populations of Emilia Romagna (1) Due to rounding, nu
Slide 33: 2023 Net Income – Net income Adjusted Bridge Analysis
2023 Net Income – Net income Adjusted Bridge Analysis +5.4% (1) Due to rounding, numbers presented throughout this chart may not add up precisely to the totals provided (2) Source: management analysis of consolidated results as of 31/12/2023 (3) Net income adjusted considers the depreciation of “pur
Slide 34: Performance since IPO (2015)
Performance since IPO (2015) Strategic targets identified since 2015 Actual results: 2015 – 2023 CAGR Organic Total Organic growth 5/6% p.a. Sales 10.5% 14.3% (CAGR) EBITDA 11.2% 15.0% 10-15% on sales NWC Strict control In 22/23 temporary increase of safety stock due to uncertain supply chain Growth
Slide 35: Financial Highlights
Financial Highlights Turnover 2009-2023 EBITDA ADJ (2) 2009-2023 CAGR +14.3% since IPO CAGR +7.5% Net Income reported 2009-2023 Net Cash Generation ADJ (2) 2013-2023 AVG = €21.2M • All data in € millions • (1) 2014-2023 based on IFRS – 2009-2013 based on ITA GAAP 35 • (2) Adjustments to exclude non-
Slide 36: Resilient business model and improving profitability
Resilient business model and improving profitability Since H2 2019, dilutive effect on margin percentage due to lower profitability of AL AIR (≈ 125bps) In 2020 impact of Covid and lockdown In H1-20, volumes decreased by 10.4% LFL due to lockdown In 2021, volumes increased by 14.7% In 2022
Slide 37: Shareholders Structure
Shareholders Structure (1) 45,82% (3)(4) 16,00% (3) (4) 38,18% (3) (1) Fully diluted – post warrant conversion at end of May 2017 (2) Updated as of as of April 5th, 2024 (3) Based on number of shares (4) Thanks to the Loyalty Share Program (2 years ownership) as of April 5th, 2024, Finami owns 50,9%
Slide 38: LU-VE presence on the Italian Stock Exchange
LU-VE presence on the Italian Stock Exchange STAR segment MID Cap index 21st MTA September 19th 2022 AIM 21st June September 9th July 2017 2022 2015 38
Slide 39: ESG
LU-VE GROUP me leadership with passion
Slide 40: LU-VE Group Approach to ESG Topics
LU-VE Group Approach to ESG Topics Global Scenario Paris Green Deal – Horizon, IPPC, Sixth 28th United Nations climate 2015 Agreement 2019 Kigali Amendment Assessment Report change conference (COP28) 1985 LU-VE 2017 SUSTAINABILITY 2020 2022 SUSTAINABILITY 2023 SUSTAINABILITY 2021 EU TAXONOMY GOVERNA
Slide 41: Social Impact of LU-VE Group solutions
Social Impact of LU-VE Group solutions FOOD ENERGY SAFETY 50% CLIMATE EFFICIENCY WELL-BEING 18% DIGITAL DIGITAL TRANSFORMATION CLIMATE 25% TRANSFORMATION 7% WELL-BEING *respect Group’s total turnover in 2023 41
Slide 42: Our Vision in 4 pillars is aligned to the SDGs
Our Vision in 4 pillars is aligned to the SDGs Our vision is linked to the material topics that we pursue so that this vision can take shape in the real world. The Sustainable Development Goals (SDGs) have been defined at global level by the United Nations to identify global priorities for developme
Slide 43: The Sustainability Governance
The Sustainability Governance In 2022 LU-VE Group set up a corporate Sustainability Steering Committee: this is where the strategic lines will be plotted and the progress of our performance will be evaluated. The new figure of Group General Manager (GM), introduced in 2023, has been also involved in
Slide 44: The Sustainability Plan
The Sustainability Plan The 2023 was the first year of implementation of LU-VE Group’s 2023-2025 Sustainability Plan. It was prepared by the Corporate Sustainability Steering Committee, reviewed by the Control and Risk Committee, and approved by the Board of Directors in February 2023. All the targe
Slide 45: EU Taxonomy and the eligible activities of the LU-VE Group
EU Taxonomy and the eligible activities of the LU-VE Group LU-VE Group’s activities eligible to the EU Taxonomy, because of its contribution to the objectives: «Climate Change Mitigation» (CCM) - Delegated Regulation (EU) 2023/2485 and «Transition to a circular economy» (CE) - Delegated Regulation (
Slide 46: Climate Risks analysis for the Business Plan 2023-2026
Climate Risks analysis for the Business Plan 2023-2026 PHYSICAL CLIMATE RISKS ANALYSIS • LU-VE Group already required a risk assessment for its production facilities in 2022. This analysis is considered up-to-date and also applicable for the financial year 2023 as it is based on IPCC (Intergovernmen
Slide 47: Helping Customers Reach their Sustainability goals
Helping Customers Reach their Sustainability goals FIRST MOVER IN GREEN TECH LU-VE GROUP FOR CO2 Over the last 10 years, LU-VE Group’s technological leadership has been strengthened thanks to the development fluids and energy-efficient motors. 47 The graph “% of sales with EC/AC motors” shows for 20
Slide 48: Decarbonisation and heat pumps
Decarbonisation and heat pumps • Heat pumps are a decisive element for achieving the goal of zero “net carbon emissions” • LU-VE Group has designed special products to make the best use of heat sources for heat pumps: thus supporting this market which in 2022 recorded a strong growth HEAT PUMPS FOR
Slide 49: Sustainability Ambassadors' Journey
Sustainability Ambassadors’ Journey The “Sustainability Ambassadors’ Journey” is a global internal training programme launched in 2023 to increase the sustainability culture at LU-VE Group and accelerate sustainable change in the company. From the various applications received, a total of 80 employe
Slide 50: LU-VE Group
LU-VE GROUP me leadership with passion
Slide 51: M&A activity (2015-2022)
M&A activity (2015- 2022) Four acquisitions completed Sales acquired: € 145 m (1) Amount invested: € 122 m (1) Average EBITDA multiple paid = 7.0x (1) ACC Wanbao asset deal (1) Including Refrion acquired on 30 March 2022 51
Slide 52: Refrion (Italy) (2022)
Refrion (Italy) (2022) Main financial terms Strategic rationale • Acquisition completed on 30th of March • Refrion specializes in the production and 2022 marketing of air heat exchangers with adiabatic technology, which enables • Acquisition of 75%, plus put&call on reductions to be made in energy t
Slide 53: ACC (Italy) (2022)
ACC (Italy) (2022) Main financial terms Strategic rationale • Transaction completed on 29th of July • Access to modern industrial plant at 2022 cheap conditions (40.000 mq) • Contracting of selected assets and employees of former ACC under receivership (based on Belluno – Italy) • Hiring skilled peo
Slide 54: Tecnair LV (Italy) (2022) - Divestiture
Tecnair LV (Italy) (2022) - Divestiture Main financial terms Strategic rationale • Transaction completed on 21st of March • Limited integration with the LUVE 2022 Group • Sale to Systemair of the entire • Product range in competition with large participation (80%) in Tecnair LV customers of LUVE • T
Slide 55: Acquisition of Alfa Laval Air Heat Exchanger Business: Overview (2019)
Acquisition of Alfa Laval Air Heat Exchanger Business: Overview (2019) On December 12th, 2018, Lu-Ve signed a binding contract to acquire 100% of Alfa Laval Air Heat Exchanger division (“AL Air”) of Alfa Laval Group. The acquisition was completed on April 30th, 2019 (1) Purchase price paid at cl
Slide 56: Acquisition of Alfa Laval Air Heat Exchanger Business: Rationale (2019)
Acquisition of Alfa Laval Air Heat Exchanger Business: Rationale (2019) Becoming the third largest player in the world in the air-cooled products Strengthening market position in Europe in industrial cooling business unit, achieving a leading position Enlargement of product applications (engin
Slide 57: ZHT (USA) (2018)
ZHT (USA) (2018) On June 26, 2018, LUVE completed the acquisition of Zyklus Heat Transfer Inc (ZHT), based in Jacksonville (Texas) Luve acquired 100% ZHT is specialized on heat exchanger for the US market Mr. Zachary Riddleseperger – founder and 100% owner – remains as VP Operation Three y
Slide 58: Spirotech (India) (2016)
Spirotech (India) (2016) • Binding contract to acquire 95% of Spirotech signed on 18/9/2016 • Spirotech is a leading and fast-growing Indian producer of heat exchanger for HVAC industry, home appliances and transportation: • turnover of € 21 millions with an average EBITDA margin > 20% • doubled the
Slide 59: Disclaimer
Disclaimer • This presentation has been prepared by LU-VE S.p.A. for information purposes only and for use in presentations of the Group’s results and strategies. • For further details on the LU-VE Group, reference should be made to publicly available information. • Statements contained in this pres
Slide 60: Our best days have yet to be lived
OUR BEST DAYS HAVE YET TO BE LIVED Nazim Hikmet