Fluidra, S.a. · BME:FDR
Fluidra — Investor Day (October 2021)
42 slides from Fluidra's investor day presentation, October 2021
Slide 1: To Create the Perfect Pool & Wellness Experience, Responsibly
TO CREATE THE PERFECT POOL & WELLNESS EXPERIENCE, RESPONSIBLY Investor Relations Materials October 2021
Slide 2: Disclaimer
DISCLAIMER This document is for information purposes only and does not constitute an offer to sell, exchange or buy, or an invitation to make offers to buy, securities issued by any of the companies mentioned. This financial information has been prepared by Fluidra, S.A. ("Fluidra", and with all i
Slide 3: Accelerating Growth & Improving Value Creation
ACCELERATING GROWTH & IMPROVING VALUE CREATION 1 Global leader – at scale, in a long-term structural growth industry Optimal business model and adapted “route to market” - Branded & Pool-Pro centric IoT increasing barriers to entry – Fluidra leading the transformation 2 Continuous margin expansion –
Slide 4: Sustainable Long Term Growth Supported by Increasing Installed Base
SUSTAINABLE LONG TERM GROWTH SUPPORTED BY INCREASING INSTALLED BASE Resiliency driven by large installed base Acceleration in the evolution of the pool base Residential inground pools in millions Split by market type 2020 New Build @ 20 '19 Volumes 21% 15 New Build above '19 10 Volumes 4% 5 Aftermar
Slide 5: Step Change in Consumer Trends Accelerating Growth Drivers
STEP CHANGE IN CONSUMER TRENDS ACCELERATING GROWTH DRIVERS Market Dynamics & Drivers Market Step Change Consumer trends Large installed pool base with accelerating growth Flight to suburbs globally and in the USA to the sunbelt Average selling price continues to grow Increasing tendency towards outd
Slide 6: Large Global Market – Highly Fragmented & Led by Fluidra
LARGE GLOBAL MARKET – HIGHLY FRAGMENTED & LED BY FLUIDRA NA & Europe make up for the bulk of the large Global market Fluidra is #1 in countries with 40% of global pool base and top 3 in 93% Split by market 2020 Rest of the World 21% Global Pool Europe Market NA 30% 49% €11.5bn Fluidra is the global
Slide 7: Global Industry Leader – Strengthened, and Invested, to Win
GLOBAL INDUSTRY LEADER – STRENGTHENED, AND INVESTED, TO WIN WHY FLUIDRA WINS 2015-19 2020 Medium term growth Assumptions Market growth Broadest geographic footprint – access to all markets for 1 growth & diversification New Build growth Optimal business model and adapted “route to market” - 2 Brande
Slide 8: Global R&D Leader with Focus on Value Enhancing IoT Ecosystem
GLOBAL R&D LEADER WITH FOCUS ON VALUE ENHANCING IOT ECOSYSTEM IoT benefits the entire pool ecosystem R&D capability with >200 engineers and 1 • Peace of mind >1,400 patents End User • Quality of service • Cost efficiency • 3x more patents than the next industry player 2 • Efficiency Pool Pro’s • P
Slide 9: Proven Track Record on Margin Expansion - Set to Continue
PROVEN TRACK RECORD ON MARGIN EXPANSION - SET TO CONTINUE Clear competencies to drive margin Proven Margin Expansion (Adjusted EBITDA % Sales) Lean and Value Initiatives as a constant process taking cost out of products mainly through: 27% ‒ Product or component redesign ‒ Supplier change or cost
Slide 10: M&A Track Record: Regular, Systematic Process - Creating Value
M&A TRACK RECORD: REGULAR, SYSTEMATIC PROCESS - CREATING VALUE Clear acquisition parameters Disciplined M&A strategy in a largely fragmented market Opportunity for product range & Culturally aligned • Objective to generate additional annual sales growth of customer expansion c. 1-2% per annum • Larg
Slide 11: Efficient Pool Systems Drive Replacement Cycle
EFFICIENT POOL SYSTEMS DRIVE REPLACEMENT CYCLE Automatically optimizes for peak Uses 70% efficiency Variable-Speed less energy iAquaLink Pumps Reduces chlorine use by Uses less than up to 50% Salt + Mineral Sanitization LED Lighting 50W of power Reduces 50% increase in evaporation by Jandy hydraulic
Slide 12: Responsibility Blueprint: Clear Commitments in Each ESG Vertical
RESPONSIBILITY BLUEPRINT: CLEAR COMMITMENTS IN EACH ESG VERTICAL Environment Social Governance Carbon neutral Zero net wage gap Rating Be a carbon neutral company in Equal pay for equal work Reach a score of 80 in 2027 (Scope 1 & 2) and by 2050 between men and women by S&P in 2030 (Scope 3) 2024 − 2
Slide 13: Strong Track Record - Growth, Diversification & Resilience
STRONG TRACK RECORD - GROWTH, DIVERSIFICATION & RESILIENCE Growth dynamics Revenues1 CAGR 17-20 Adj. EBITDA2 CAGR 17-20 Cash EPS3 CAGR 17-20 • Strong and consistent top-line growth 139% above market 23% 21% growth 86% in 9M 15% 11% growth 2021 in 9M 41% 2021 • Resilience founded on megatrends, and 7
Slide 14: High Quality Cash Returns on Investment – Set to Improve Further
HIGH QUALITY CASH RETURNS ON INVESTMENT – SET TO IMPROVE FURTHER Very strong operating, cash conversion and returns dynamics … • Delivering Growth & Avg. EBITDA1 Mgn. 17-20 Avg. FCF conversion2 17-20 ROCE3 2020 Quality of Returns Significant operating leverage 19% as measured - Fluidra leads a fast-
Slide 15: Medium-Term Strategic & Financial Objectives Summary
MEDIUM-TERM STRATEGIC & FINANCIAL OBJECTIVES SUMMARY > Industry, leveraging global footprint Operating and financial performance Growth Focus on North America expansion Past Step change Future Drive by innovation, IoT, Commercial Pool Medium 2017-19 20202 2021E Term Continued execution – Sim
Slide 16: Appendix
APPENDIX FLUIDRA CAPITAL MARKETS DAY
Slide 17: Fluidra Continues to Deliver on Financial Objectives – Ahead of Plan
FLUIDRA CONTINUES TO DELIVER ON FINANCIAL OBJECTIVES – AHEAD OF PLAN Targets set – Strategic Plan 2018-2022 €1.2bn €1.7bn • Executed ahead of plans set with transformational 2018 Zodiac Sales €1.5bn Margin guidance merger 2017 at c. 23% vs 22% target in 2022 €199m €351m EBITDA1 €321m • All 2022 Stra
Slide 18: Total Addressable Market Well-Diversified by Segment
TOTAL ADDRESSABLE MARKET WELL-DIVERSIFIED BY SEGMENT Maintenance New Build Consumables Re-model & Upgrade €2.9bn €2.8bn €4.2bn €1.6bn c.94% Residential / c.74% Residential / c.89% Residential / c.91% Residential / c.6% Commercial c.26% Commercial c.11% Commercial c.9% Commercial Total global address
Slide 19: Blended Model Adapts & Optimizes Route to Market Across Globe
BLENDED MODEL ADAPTS & OPTIMIZES ROUTE TO MARKET ACROSS GLOBE Fluidra operates across the value chain with Significance of Pool Pro an adapted regional model • Critical route to market > 70% of channel share Fluidra presence • Pool Pro is key decision-maker for product North America: selection and s
Slide 20: Global Industry Leader with Winning Regional Strategies
GLOBAL INDUSTRY LEADER WITH WINNING REGIONAL STRATEGIES Accelerate growth in North America Strong product pipeline Expand into new residential Leverage connected Continue aftermarket Develop commercial pool and new channels categories from CMP pools for cross-selling penetration strategy by growing
Slide 21: CMP Acquisition Case Study (Q1 2021) – Meets All Our Criteria
CMP ACQUISITION CASE STUDY (Q1 2021) – MEETS ALL OUR CRITERIA Our Criteria & CMP Opportunity Fast-growing business - attractive adjacent segment (sales by segment) Expands Group North America Footprint: US 1 manufacturer of solutions for recreational water industry • 2016-20 Sales CAGR of Product ra
Slide 22: S.R. Smith Acquisition (Q3 2021)
S.R. SMITH ACQUISITION (Q3 2021) S.R. Smith Acquisition Rationale Sales by segment Complementary pool deck business accelerates 1 growth in the US Accelerate commercial pool business in North $103m 2 America and provides a start in Australia Significant revenue synergies (>$10M) as well as 3 cost sy
Slide 23: Ownership Structure and Board Composition
OWNERSHIP STRUCTURE AND BOARD COMPOSITION Ownership structure(1) Board Composition(1) 12 members Free float 60.2% Eloi Planes Bruce Brooks Esther Berrozpe (Executive Chairman) (CEO) Bernardo Corbera Steven M. Langman Jorge Constans Bernat Garrigós José Manuel Vargas Gabriel López Founding Óscar Serr
Slide 24: US GAAP to IFRS - Key Financial Differences for Fluidra
US GAAP TO IFRS - KEY FINANCIAL DIFFERENCES FOR FLUIDRA €M 2020 Adjusted EBITDA 320.8 Lease expense (24.7) Lease expenses not included in P&L under IFRS 16 R&D expense (12.5) Capitalized R&D expenses Adjusted EBITDA (US GAAP comparable) 283.6 Depreciation (20.4) Adjusted EBITA (US GAAP comparable) 2
Slide 25: Q3 Results 2021
Q3 RESULTS 2021 October 28th 2021
Slide 26: Key Messages
Key Messages 1. Continuation of strong growth experienced in 1H21 despite the more difficult comparison of 3Q20. 2. Fundamentals of the business remain robust. Constructive long-term perspectives. 3. Ongoing inflationary pressure on raw materials and shipping mostly offset by price increases and ope
Slide 27: YTD Financial Highlights
YTD Financial Highlights Excellent Growth & Operating Leverage in Q3 2021 Evol. Const. FX & €M 2020 2021 21/20 Perimeter • Strong Sales growth in Q3 in all Sales 1,142.9 1,703.8 49.1% 41.4% regions led by North America. • EBITDA and EBITA showed EBITDA 248.0 450.5 81.6% 86.2% excellent operating lev
Slide 28: Highlights for the Quarter
Highlights for the Quarter Robust Business Evolution ● Solid growth across all geographies in the third quarter with a tough 2020 comp. North America remains as main growth engine driven by demographic trends and builder backlog. ● Implementation of mid-to-high single digit price increase for the 20
Slide 29: Sales by Geography
Sales by Geography Solid Performance in All Geographies on the Back of Strong Q3 2020 +25.2%(1) vs Q3 2019 % % Evol. Const. FX & Q3 €M 2020 Sales 2021 Sales 21/20 Perimeter • Southern Europe, robust evolution Southern Europe 120 32% 129 25% 7.3% 7.1% with accelerated demand through Rest of Europe 78
Slide 30: Sales by Business Unit
Sales by Business Unit Residential Drives Growth with Commercial Pool in Recovery % % Evol. Q3 €M 2020 2021 Sales Sales 21/20 • Residential Pool grew strongly in Pool & Wellness 361 97% 504 98% 39.6% the quarter backed by continuous Residential 266 71% 385 75% 45.0% robust demand and inorganic activ
Slide 31: YTD 2021 Results
YTD 2021 Results Increasing Margins and Operating Leverage Lead to Higher Profitability Evol. • Superb Sales performance activity in €M 2020 % Sales 2021 % Sales 21/20 the Northern Hemisphere. Sales 1,142.9 100% 1,703.8 100% 49.1% • Price and value improvement initiatives Gross Margin 597.6 52.3% 90
Slide 32: Net Working Capital
Net Working Capital Outstanding Management of NWC, Improving Ratio to Sales by 178 Bps in Q3 September €M 2020 2021 Evol. 21/20 • Operating Net Working Capital performed very well, improving ratio to LTM Sales by 178 bps. Inventory 272.0 421.2 54.9% • Inventory increased driven by Accounts Receivabl
Slide 33: Cash Flow and Net Debt YTD
Cash Flow and Net Debt YTD Further Deleverage Despite Strong M&A Activity €M 2020 2021 € Evol. 21/20 Reported EBITDA 234.6 414.7 180.1 Net Interest Expense Paid (28.4) (24.4) 4.0 Corporate Income Tax Paid (29.7) (66.2) (36.6) Operating Working Capital 26.1 (43.5) (69.6) • Excellent Operating Cash Fl
Slide 34: Outlook and 2021 Guidance
Outlook and 2021 Guidance 1. Strong finish to the 2021 Northern Hemisphere Residential Pool season in Q3. 2. Management is confident on delivering a solid Q4 despite challenging supply chain and inflationary environment. Positive early data for October. 3. Momentum continues for New Builds demograph
Slide 35: Conclusions
Conclusions 1. Confirmation of step change in the industry, with Q3 growth across all regions vs a high growth Q3 2020 comp. 2. Business fundamentals and industry resilience are both very strong. Optimally positioned to achieve medium term targets shared at CMD. 3. Continued efforts to navigate supp
Slide 36: Appendix
Appendix FLUIDRA Q3 RESULTS 2021
Slide 37: (I) Sales by Geography
(I) Sales by Geography Constant Q3 Evol. 21/20 Const. FX Perimeter Const. FX & Perimeter Southern Europe 7.3% 7.3% 7.1% 7.1% Rest of Europe 13.7% 12.6% 11.2% 10.1% North America 105.4% 103.3% 61.9% 60.2% Rest of the World 19.6% 15.6% 15.7% 11.9% Total 39.1% 37.5% 25.3% 23.9% Constant YTD Evol. 21/20
Slide 38: (II) Reported Profit & Loss Account YTD
(II) Reported Profit & Loss Account YTD €M 2020 % Sales 2021 % Sales Evol. 21/20 Sales 1,142.9 100% 1,703.8 100% 49.1% Gross Margin 596.6 52.2% 896.3 52.6% 50.3% Opex before Dep. & Amort. 357.4 31.3% 481.4 28.3% 34.7% Provisions for Bad Debt 4.5 0.4% 0.2 0.0% (94.8%) Reported EBITDA 234.6 20.5% 414.
Slide 39: (III) Reconciliation to Reported EBITDA YTD
(III) Reconciliation to Reported EBITDA YTD €M 2020 2021 Evol. 21/20 EBITDA 248.0 450.5 81.6% Integration Related Non-Recurring Expense (3.1) (13.9) 344.2% Other & FX impact on Non-Recurring Expense (0.2) 0.5 (330.8%) Profit/Loss from Sales of Subsidiaries (1.0) - (100.0%) Stock Based Compensation (
Slide 40: (IV) Reconciliation of Reported to Cash Net Profit and Cash EPS YTD
(IV) Reconciliation of Reported to Cash Net Profit and Cash EPS YTD €M 2020 2021 Evol. 21/20 Reported Net Profit from Continued Operations 77.0 221.4 187.5% Integration Related & Other Non-Recurring Expense 3.3 13.5 303.1% Stock Based Compensation 7.2 21.8 202.6% Run Rate Synergies 1.9 0.5 (71.5%) P
Slide 41: (V) Reported Balance Sheet
(V) Reported Balance Sheet Assets 09/2020 09/2021 Liabilities 09/2020 09/2021 PPE & Rights of Use 220.7 292.1 Share Capital 195.6 195.6 Goodwill 1,095.5 1,278.8 Share Premium 1,148.6 1,148.6 Other Intangible Assets 675.6 831.6 Retained Earnings 206.1 388.8 Other Non-Current Assets 94.0 108.0 Interim
Slide 42: Thanks For Your Attention
+34 93 724 39 00 Investor_relations@fluidra.com Avda. Alcalde Barnils 69 - 08174 Sant Cugat (Barcelona) www.fluidra.com Thanks For Your Attention