Forbo Holding AG · SIX:FORN
Forbo — FY2022 Earnings Presentation
31 slides from Forbo's earnings presentation, Mar 2, 2023
Slide 1: Media and Financial Analyst Meeting
FORBO GROUP WELCOME MEDIA AND FINANCIAL ANALYST MEETING ZURICH, THURSDAY, MARCH 2, 2023 This E. Schneider Executive Chairman of the Board of Directors Andreas Jaeger Chief Financial Officer Urs Christen Head Corporate Development and Investor Relations
Slide 2: Disclaimer
DISCLAIMER By attending the meeting where this presentation is made or by reading the presentation slides you agree to be bound by the following limitations: The information in this document has been prepared by Forbo. It does not constitute a recommendation regarding the securities of Forbo. No rep
Slide 3: Agenda
AGENDA WELCOME & INTRODUCTORY REMARKS THIS E. SCHNEIDER FINANCIAL RESULTS 2022 ANDREAS JAEGER ACTIVITIES & FOCUS URS CHRISTEN STRATEGY UPDATE & OUTLOOK 2023 THIS E. SCHNEIDER QUESTIONS & ANSWERS Media and financial analyst meeting 02.03.2023 3
Slide 4: Welcome & Introductory Remarks
THIS E. SCHNEIDER WELCOME & INTRODUCTORY REMARKS Media and financial analyst meeting 02.03.2023 4
Slide 5: 2022 in a Nutshell
FORBO GROUP 2022 IN A NUTSHELL – Demanding market environment impacted by supply chain challenges, increased raw materials, energy, logistics, and other costs – Good volume growth in H1 2022 – strong decline in demand in H2 2022 – Significant increase in cost base and workforce in H1 2022 – Correcti
Slide 6: Financial Performance 2022
FORBO GROUP FINANCIAL PERFORMANCE 2022 Sales growth in all regions thanks to sales price rises Net sales growth of 3.1% to CHF 1,293.2 million (8.5% in local currency) Declining volumes and a significant rise in cost structure EBIT of CHF 132.6 million (–25.9%) and EBIT margin of 10.3% Lower earning
Slide 7: Financial Results 2022
ANDREAS JAEGER FINANCIAL RESULTS 2022 Media and financial analyst meeting 02.03.2023 7
Slide 8: Operational Challenges in 2022
FORBO GROUP OPERATIONAL CHALLENGES IN 2022 – Solid growth in H1 2022 followed by lower market demand in H2 2022, which negatively impacted sales and results – Strong build-up of workforce and structures in H1 2022 led to a higher cost base in H2 2022 – Subsequent delayed reaction in H2 2022 to volum
Slide 9: Financial Overview Income Statement
FORBO GROUP FINANCIAL OVERVIEWINCOME CONSOLIDATED – INCOME STATEMENT FULL YEAR 2022 STATEMENT CHF MILLION 2022 2021 ∆ CHF & LC – Higher sales driven by sales price Net sales 1,293.2 1,254.0 +3.1% / LC +8.5% increases Gross profit 440.8 451.0 –2.3% – Lower gross profit as a result of Operating expens
Slide 10: Net Sales Bridge 2022
FORBO GROUP NET SALES BRIDGE 2022 +3.1% – Sales growth in local currencies of 8.5%; positive sales performance in CHF MILLION 80 -40 1,293.2 all three regions 1,254.0 – Reduction in demand from late -44 54 summer 2022 onwards +3% –6% +9% +12% –4% –6% – Rising price increases over the course of 2022
Slide 11: EBIT Bridge 2022
FORBO GROUP EBIT BRIDGE 2022 OPERATIONAL – Lower market demand drove down volumes and thus EBIT CHF MILLION 179 – Increased sales prices mainly covered higher –26 153 costs for raw materials, energy, and logistics –7 –6 133 –7 – Build-up of workforce and structures in H1 2022 led to a higher cost ba
Slide 12: Consolidated Balance Sheet
FORBO GROUP CONSOLIDATED BALANCE SHEET CHF MILLION 2022 2021 – Reduced cash due to lower result and Non-current assets 388.6 428.0 increased inventories Current assets 571.6 553.6 – Higher inventories caused by increased Cash and cash equivalents 46.7 93.3 costs and challenges in coordinating Workin
Slide 13: Consolidated Cash Flow Statement
FORBO GROUP CONSOLIDATED CASH FLOW STATEMENT Free cash flow down from CHF 128 CHF MILLION 2022 2021 million to CHF 51 million as a result of lower earnings and higher net Cash flow from operating activities 80.6 166.5 working capital Cash flow from investing activities –30.1 –38.4 – Higher inventory
Slide 14: Capital Expenditure
FORBO GROUP CAPITAL EXPENDITURE Lower capital expenditure in 2022 due to delays CHF MILLION in delivery of production systems and machine 39 40 elements by suppliers 38 36 31 REPLACEMENT 57% 2022 43% RATIONALIZATION & EXTENSION 2018 2019 2020 2021 2022 Media and financial analyst meeting 02.03.2023
Slide 15: Development of Profitability
FORBO GROUP DEVELOPMENT OF PROFITABILITY EBIT and EBIT margin 2018–2022 CHF MILLION 200 16% – Long-term track record of performance 180 above industry average EBIT margin 14% 160 – Extraordinary drop in 2022 due to 12% exceptional challenges 140 10% – Well placed to achieve further sustain- 120 able
Slide 16: Activities & Focus
URS CHRISTEN ACTIVITIES & FOCUS Media and financial analyst meeting 02.03.2023 16
Slide 17: Flooring Systems 2022 in a Nutshell
FLOORING SYSTEMS 2022 IN A NUTSHELL – Positive volume development in H1 2022 – reduced demand from late summer 2022, intensified in Q4 2022 – Project postponements due to increased costs for building materials; shift away from renovation projects to energy-saving projects – Sales growth thanks to pr
Slide 18: Flooring Systems Development of Profitability
FLOORING SYSTEMS DEVELOPMENT OF PROFITABILITY EBIT and EBIT margin 2018–2022 CHF MILLION 140 16% – Long-term track record of performance well above industry 120 14% average EBIT margin 12% – Unusual drop in 2022 due to 100 operational challenges and one- 10% time impacts 80 8% 60 6% 40 4% 20 2% EBIT
Slide 19: Movement Systems 2022 in a Nutshell
MOVEMENT SYSTEMS 2022 IN A NUTSHELL – Solid business year despite significantly higher costs for raw materials, energy, and logistics – Sales growth thanks to sales price increases in all regions – Treadmills, raw material processing, and industrial production segments recorded double-digit sales gr
Slide 20: Movement Systems Development of Profitability
MOVEMENT SYSTEMS DEVELOPMENT OF PROFITABILITY EBIT and EBIT margin 2018–2022 CHF MILLION 60 14% – Strong track record of improving EBIT margin 50 12% – EBIT margin contraction in 2020 due to Covid 10% 40 8% 30 6% 20 4% 10 2% EBIT margin EBIT 0 0% 2018 2019 2020 2021 2022 Media and financial analyst
Slide 21: Measures Taken to Address the Challenges/Issues
FORBO GROUP MEASURES TAKEN TO ADDRESS THE CHALLENGES/ISSUES CHALLENGES/ISSUES MEASURES TAKEN − Significant increase in raw materials, energy, logistics, and − Significant and continuous sales price increases in 2022; other costs to be continued in 2023 − Increase in cost structure in H1 2022 versus
Slide 22: Focus 2023
FORBO GROUP FOCUS 2023 – Sales price increases to address higher costs, particularly rising personnel costs – Proximity to local markets to respond to developments in timely and agile manner – Targeted sales & marketing activities to foster growth – Commissioning of second production line in China (
Slide 23: Sustainability Remains a Key Focus
FORBO GROUP SUSTAINABILITY REMAINS A KEY FOCUS Sustainability DNA Fully carbon- Conveyor belt Energy-saving Use of Vinyl floor Various textile neutral linoleum made from conveyor belt – phthalate-free coverings products contain Continuous without offsetting renewable raw allowing energy plasticizers
Slide 24: Strategy Update & Outlook 2023
THIS E. SCHNEIDER STRATEGY UPDATE & OUTLOOK 2023 Media and financial analyst meeting 02.03.2023 24
Slide 25: Attractive Market Prospects
FORBO GROUP ATTRACTIVE MARKET PROSPECTS – Growing population and wealth are boosting demand for construction (Flooring Systems) – Rising labor costs are driving need for automation (Movement Systems) – High share of replacement/renovation business – Increasing demand for service offers – Differentia
Slide 26: Resilient Business Model
FORBO GROUP RESILIENT BUSINESS MODEL – Differentiation through innovative, broad, and high-quality product portfolios with unique selling propositions – Strong global market positions – Presence in attractive growth markets – Diversified customer base in different industries/segments/regions – Robus
Slide 27: Proven Strategy with Commitment to Value Creation
FORBO GROUP PROVEN STRATEGY WITH COMMITMENT TO VALUE CREATION – Create global leadership positions in clearly defined market segments based on customer focus, high level of service, innovation, sustainability, digital transformation, and a strong global brand CLEAR – Shape markets and drive profitab
Slide 28: Strategic Priorities in 2023
FORBO GROUP STRATEGIC PRIORITIES IN 2023 – Drive profitable growth through targeted sales & marketing activities – Foster entrepreneurial mindset – Focus on strategy execution Media and financial analyst meeting 02.03.2023 28
Slide 29: Financial Outlook 2023
FORBO GROUP FINANCIAL OUTLOOK 2023 Provided the geopolitical and economic environment does not change significantly and barring any foreign exchange fluctuations, we expect: – Slightly higher net sales in local currencies compared with the previous year – Group profit in the magnitude of CHF 130 mil
Slide 30: Proposals to the Ordinary General Meeting
FORBO GROUP PROPOSALS TO THE ORDINARY GENERAL MEETING – All members of the Board of Directors to stand for re-election with the exception of Jens Fankhänel (CEO with effect from March 1, 2023) – This E. Schneider to stand for election as full-time Chairman of the Board of Directors – Dividend of CHF
Slide 31: Questions & Answers
QUESTIONS & ANSWERS Media and financial analyst meeting 02.03.2023 31