Arteche Lantegi Elkartea Sa · BME:ART
Arteche Lantegi Elkartea Sa — Arteche — Investor Presentation (September 2023)
37 slides from Arteche Lantegi Elkartea Sa's investor presentation, Sep 7, 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 2023 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 the renewables and T&D markets are 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 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 at the centre of Arteche's activities
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: H1 2023 Earnings Release
H1 2023 Earnings Release September 7, 2023 19
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 the first half consolidated accounts of the Company and its Group as of June 30, 2023,
Slide 22: H1 2023 Key highlights
H1 2023 Key highlights Orders grew in the first half by +28.7% to €247.3 million, well above market growth. All geographic regions and business lines grew significantly. Revenue increased by +20.3% to €188.0m and grew by double digit both in Q1 and Q2. Direct margin improved progressively throughout
Slide 23: H1 2023 Financial highlights
H1 2023 Financial highlights Direct NFD / Order book Revenue EBITDA Net profit Margin(1) EBITDA €247.3m €188.0m €66.2m €17.4m €4.3m 1.76x vs 1.90x +28.7% +20.3% +46.3% +32.9% +41.0% at 30 June y/y y/y y/y y/y y/y (+24.4% in 2022 (+52.5% in (+33.7% in constant constant constant currency) currency) cu
Slide 24: Revenue grew at double-digit rate in H1 2023
Revenue grew at double-digit rate in H1 2023 Order book (€m,%) Revenue by geographical region(1) (€m,%) +20.3% +28.7% 247.3 188.0 10% 9% +4.7% 156.3 192.2 14% APAC -28.3% 15% 15% 13% 12% +50.7% LATAM 15% +21.5% 35% 35% 32% +43.6% 28% NAM +46.6% 44% 40% 41% +18.6% EMEA 41% +19.8% H1 2022 H1 2023 H1 2
Slide 25: Double-digit revenue growth in all quarters
Double-digit revenue growth in all quarters Historical record reached in the first half Quarterly revenue (€ million) +16.4% 100.3 103.5 +25.1% 87.8 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 2023 24
Slide 26: Positive contribution from all businesses
Positive contribution from all businesses Revenue by business line (€m,%) Measurement and Monitoring Systems Maintaining the Top 3 in HV and Top 10 in MV 188.0 ✓ New products: 400kV SF6 free GIS VT, 145KV inductive VT with 15% less carbon footprint, 52kV sensor +20.3% ✓ Top four markets YTD: US, Spa
Slide 27: Direct margin exceeds pre-crisis levels during H1 2023
Direct margin exceeds pre-crisis levels during H1 2023 Direct margin(1) by quarter Direct margin evolution ( €m, % of income at (% of income at selling price(2)) H1 23: 32.0% selling price) (+342 bps vs H1 22) +1.9 +0.1 32.0% 33.0% +8.4 66.2 32.1% -2.8 31.1% 31.1% 30.9% +13.4 30.1% 30.0% 29.4% 29.2%
Slide 28: EBITDA H1 2023
EBITDA H1 2023 Record growth of 33% in the first half EBITDA evolution year on year (€ million,% of revenue) ▪ EBITDA increased in the first half as a result of 20,0 9.3% 9,4% record sales volume, updated sales prices and 18,0 9,2% 16,0 operational productivity improvements. 9,0% 14,0 8,8% 12,0 8,6%
Slide 29: Net profit H1 2023
Net profit H1 2023 Growth of 41% in the first six months In € million H1 2023 H1 2022 % y-o-y Financial expenses Exchange rate differences EBIT (Operating profit) 9.3 5.8 +60.7% +1.9 Financial result -3.5 -0.9 n.a. 0.0 Income tax -1.2 -1.6 -23.7% Profit for the year(1) 4.6 3.3 +40.3% -2.8 -3.5 H1 20
Slide 30: Net financial debt at June 30, 2023
Net financial debt at June 30, 2023 Leverage ratio improvement in the year Net financial debt (NFD) / EBITDA H1 2023 Gross financial debt breakdown evolution (€ million, times EBITDA) Avg. maturity: 4.1 year by source (%) Avg. cost: 4.2% 1.90x Bank 1.76x debt 13% 34% +4.9 60.5 +6.5 5% 54.3 +5.1 +2.7
Slide 31: Our ESG Commitment
Our ESG Commitment Moving forward with our 2030 ESG strategy Target Indicator H1-23 2030 Ecological & biodegradable fluid Product ranges with insulators eco/bio fluid insulation solutions/ Total product 74% 100% ranges (%) Net Zero Enviroment Reduce carbon footprint Scope 1+2 emission reduction vs l
Slide 32: Outlook for FY 2023
Outlook for FY 2023 LTM June 30, Outlook FY2022 2023 FY 2023 Revenue (€ million) 345.9 377.7 385.0 – 405.0 EBITDA (€ million) 30.1 34.4 36.5 – 40.5 EBITDA Margin 8.7% 9.3% 9.5% - 10.0% (% over revenue) 31
Slide 33: Conclusions
Conclusions 1 2 3 4 5 Sound growth in Transforming our Focus on cash orders (+28.7% Strength in Ongoing flow generation portfolio through y/y) and revenue revenue together (special focus on with a tight cost new products commitment to (+20.3% y/y) in a and markets ESG that’s inventory context marked
Slide 34: Investor Relations Office
ARTECHE LANTEGI ELKARTEA, S.A. Investor Relations Office Tel: +34 620 328 643 investors@arteche.com www.arteche.com Q&A 33
Slide 35: Annex | Alternative Performance Measures (APM)
Annex | Alternative Performance Measures (APM) APM Unit Definition 30 June 2023 FY 2022 30 June 2022 Income at €m Revenue +/- Change in stocks at sale price €206.8m = 188.0 + 18.8 €347.5m = 345.9 + 1.6 €158.0m = 156.3 + 1.7 selling price Supplies (without depreciations or extraordinary costs) + dire
Slide 36: Annex | Key Financial Figures
Annex | Key Financial Figures Key Financial Figures €m 30.06.2023 30.06.2022 % change Revenue 188.0 156.3 +20.3% Direct margin 66.1 45.2 +46.3% Direct margin (% over income*) 32.0% 28.6% +341.6bps EBITDA 17.4 13.1 +32.9% EBITDA margin (% over revenue) 9.3% 8.4% +87.7bps EBIT 9.3 5.8 +60.7% EBIT marg
Slide 37: Annex | Consolidated Balance Sheet
Annex | Consolidated Balance Sheet Consolidated Balance Sheet €m 30.06.2023 31.12.2022 Non-current Assets 105.5 108.7 Current Assets 226.8 210.7 Inventories 88.0 72.2 Trade and other receivables 77.3 78.4 Short-term financial investments 3.0 3.3 Cash and cash equivalents 57.9 56.2 Others 0.6 0.6 TOT