Carel Industries Spa · MIL:CRL
Carel Industries Spa — Q1 2019 Earnings Presentation
34 slides from Carel Industries Spa's earnings presentation, May 15, 2019
Slide 1: 2019 - Q1 Results
CAREL INDUSTRIES S.p.A. 2019 - Q1 Results 15th May 2019 This document and all of its contents are property of CAREL. All unauthorised use, reproduction or distribution of this document or the information contained in it, by anyone other than CAREL, is severely forbidden.
Slide 2: Q1 2019 – Highlights
Q1 2019 – Highlights • In Q1 2019 the implementation of the strategic guidelines continued, leading to a growth in revenues equal to 19.5%, benefitting mainly from: Organic Growth (+3.7m€) – All the geographic areas reported a growth ECONOMICS Hygromatik and Recuperator (+8.7m€) – In line with b
Slide 3: Q1 2019 – Growth in all the economic KPIs
Q1 2019 – Growth in all the economic KPIs KPIs Revenues Bridge (m€) m€ Q1 2018 Q1 2019 Δ% 0.7 80.1 Revenue 67.0 80.1 19.5% 8.7 Revenue FX Adj. 67.0 79.4 18.4% 67.0 3.7 Revenue (no M&A) 67.0 71.4 6.4% EBITDA 13.2 15.7* 18.9% EBITDA/Revenue 19.7% 19.6% Net Profit 8.2 8.9 8.4% Capex 1.7 4.9 n.r. *Inclu
Slide 4: Q1 2019 – Revenue breakdowns
Q1 2019 – Revenue breakdowns Breakdown by region Breakdown by sector Other South America 2% 2% North America 13% HVAC 66% EMEA 71% 80.1 80.1 APAC Refrig. M€ 14% M€ 32% m€ m€ m€ m€ Area Q1 2018 Q1 2019 Δ% Δ% fx Sector Q1 2018 Q1 2019 Δ% Δ% fx EMEA 46.5 56.9 22.3% 22.6% APAC 9.9 11.4 15.8% 13.7% HVAC
Slide 5: From EBITDA to Net Profit
From EBITDA to Net Profit K€ Q1 '18 Q1 '19 Δ% • Higher D&A mainly linked to: the EBITDA 13,222 15,718 18.9% change in scope of consolidation, to D&A -1,961 -4,052 higher Capex in 2018 and to the Impairment adoption of IFRS 16 (0.9m€) EBIT 11,260 11,666 3.6% Financial (charges)/income 97 -266 • Finan
Slide 6: Q1 2019 – NFP Bridge
Q1 2019 – NFP Bridge 77.5 14.7 0.9 62.7 59.1 4.9 11.1 (8.9) (4.4) m€ NFP Net Profit D&A and NWC CAPEX Other Organic NFP IFRS 16 NFP FY 2018 Provisions Q1 2019 • The 18.4m€ increase in NFP is mainly linked to the adoption of the IFRS 16 (+14.7m€). • FFO 13.3m€: which covered higher capex (due to the
Slide 7: Closing Remarks
Closing Remarks Overall good results: the good balance in CAREL’s product portfolio is confirmed by a solid growth in all the geographic areas even in presence of an uncertain macro-economic scenario. Hygromatik and Recuperator integration process on track: high single-digit top-line growth of the t
Slide 8: Annexes
Annexes
Slide 9: Shareholding structure
Shareholding structure CAREL Industries S.p.A. Share capital Other Luigi Rossi Shareholders; Luciani 32,23% S.a.p.a; 36,17% Capital Research and Management Company; 8,02% Luigi Nalini S.a.p.a; 23,58% 9 9 This document and all of its contents are property of CAREL. All unauthorised use, reproduction
Slide 10: Income statement and Balance Sheet
Income statement and Balance Sheet Income statement Balance sheet K€ Q1_2018 Q1_2019 Delta % K€ FY 2018 Q1_2019 Delta % Revenues 67,031 80,097 19.5% Fixed Capital 131,364 148,749 13.2% Other revenues 359 609 69.6% Working Capital 53,383 65,024 21.8% Operative costs (54,169) (64,988) 20.0% Empl. defi
Slide 11: Company profile
Company profile
Slide 12: Leading provider of advanced control solutions for HVAC/R
Leading provider of advanced control solutions for HVAC/R Key financials – 2018A • HVAC: Industrial, Residential, Growing key Commercial markets • Refrigeration: Food Retail and Revenue Adj. EBITDA EBITDA margin Adj. Net income Food Service €280m €55m ~20% €38m Leadership in • Control solutions prem
Slide 13: We operate in attractive niches across a wide range of end-markets
We operate in attractive niches across a wide range of end-markets… HVAC Refrigeration Industrial Residential Commercial Food Retail Food Service Data Centers Residential Shopping Centers Convenience Stores Restaurant Chains Industry and Process Office Space Hypermarkets Refrigerated Merchandisers P
Slide 14: One-stop-shop portfolio of components and platforms
…through a one-stop-shop portfolio of components and platforms Programmable controls HMI and unit terminals Parametric controls Heat exchangers Isothermal humidifiers Electronic controls easily programmable and User interfaces for units and systems Entry level electronic controllers Heat exchangers
Slide 15: Long track record of profitable organic growth
Long track record of profitable organic growth 280 Revenue (€m) 255 231 203 1990s 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A Adj. EBITDA (€m) 51 55 43 38 1990s 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 201
Slide 16: Well-articulated strategies to continue the growth track record
Well-articulated strategies to continue the growth track record • Consolidation of HVAC market leadership • Growth in Refrigeration driven by technology leadership • Upselling and cross-selling HVAC Refrigeration • Global penetration to consolidate to represent the its market leadership engine of gr
Slide 17: Leading provider of advanced energy efficient control solutions
Leading provider of advanced energy efficient control solutions 1 High-tech leader in attractive niches of the HVAC/R industry 2 Attractive above market growth supported by secular trends Positioning and technological innovation capability hard to 3 replicate Highly efficient global operations servi
Slide 18: High-tech leader in attractive niches of the HVAC/R industry
1 High-tech leader in attractive niches of the HVAC/R industry Focus on attractive niches… …resulting in leadership positioning …CONSOLIDATED …INNOVATION-ORIENTED High value applications IN HVAC PREMIUM NICHES IN REFRIGERATION Deep knowledge of final applications is 33%1 #1 SIGNIFICANT ROOM FOR key
Slide 19: Attractive market growth supported by secular trends
2 Attractive market growth supported by secular trends Secular trends… …supporting attractive market growth Reference HVAC Market Market value (€m)1 GROWING • Improvement in LIVING STANDARDS POPULATION increasing demand for HVAC/R • Focus on WASTE REDUCTION in CHANGE IN food sector CONSUMER • Increa
Slide 20: Growth is driven by market trends and focused strategic actions
2 Growth is driven by market trends and focused strategic actions… Growth drivers SECULAR TRENDS Market Increasing the market of the applications addressed by CAREL trends NICHES EXPANSION Secular Leverage of deep knowledge of final trends applications to expand to adjacent niches Expansion to Incre
Slide 21: …and favoured by up-selling and cross-selling
2 …and favoured by up-selling and cross-selling FROM PRODUCT PLATFORMS TO INTEGRATED ELECTRONIC SOLUTIONS… PRODUCT PLATFORMS SYSTEMS From a COMBINATION OF PRODUCTS FROM DIFFERENT PLATFORMS To an ECOSYSTEM TO QUICKLY ADOPT NEW TECHNOLOGIES …IN THE HVAC AND REFRIGERATION MARKETS HVAC Refrigeration Exa
Slide 22: Positioning and innovation capability hard to replicate
3 Positioning and innovation capability hard to replicate ~6% OF REVENUE1 13% OF TOTAL WORKFORCE Invested annually in R&D dedicated to R&D 3 R&D CENTRES PROPRIETARY SOFTWARE COMBINING 5 DOMAINS Vast library of proprietary software modules UNIQUE 01100 • Hardware & Firmware developed over the past 10
Slide 23: Leadership position in HVAC OEM premium niches
3 Leadership position in HVAC OEM premium niches… Leadership positioning in premium …with no perfect comparable niches… Chiller European Market Share1 OEM Large 33% proprietary diversified EM / Low cost 26% solutions competitors competitors 14% 8% 6% Vertical niche approach Innovation p
Slide 24: …and leading in innovation in the refrigeration market
3 …and leading in innovation in the refrigeration market Leveraging on HVAC experience… …CAREL is a leader in innovation Large diversified EM / Low cost competitors competitors 2014 HEOS SISTEMA Waterloop system with DC tech for refrigeration Vertical niche approach Innovation pace & 2015
Slide 25: Highly efficient global operations serving locally
4 Highly efficient global operations serving locally… NORTH AMERICA WESTERN EUROPE NORTH APAC GLOBAL PRODUCTION FOOTPRINT 1 5 Plant Plants 112 893 Employees Employees DIRECT AND HIGHLY SKILLED SALES NETWORK 57 150* Sales force Sales force 1 79 x3 Plant Sales force 1 1 BEST POSITIONED TO CAPTURE R&D
Slide 26: …diversified blue-chip customers
4 …diversified blue-chip customers HVAC REFRIGERATION GLOBAL BLUE-CHIP Dealers 14% >6,300 c. 5% OEMs BROAD & HIGHLY Customers from first customer1 70% Installers/ DIVERSIFIED In c. 100 c. 25% contractors / VARs / End Users countries worldwide from top-15 customers2 16% 2018A revenue LONG-TERM >80% >
Slide 27: Track record of profitable organic growth
5 Track record of profitable organic growth Organic double-digit growth Strong profitability High conversion to net income Cash generative business Revenue Adj. EBITDA Net Income Operating cash1 (€m) 280 37,5 255 55,2 50,9 31,2 231 39,8 203 43,0 25,1 37,5 21,4 27,7 23,7 20,7 2015A 2016A 2017A 2018A
Slide 28: Global expansion, innovation and services
6 A Global expansion, innovation and services Pursuing additional Consolidation of opportunities leadership positions improving services in HVAC offer with IoT and Growth in advanced Refrigeration monitoring solutions Geographical Cross-selling and up- expansion through selling exploiting the introd
Slide 29: Pursuing external growth through disciplined bolt-on M&A
6 Pursuing external growth through disciplined bolt-on C M&A CAREL has performed detailed analyses and scouting of potential targets, thus promoting an opportunistic approach with a focus on 3 MAIN EXPANSION AREAS: A B C COMPLEMENTING GEOGRAPHICAL Potential selected CORE-BUSINESS EXPANSION acquisiti
Slide 30: M&A
M&A
Slide 31: M&A - Recuperator
M&A - Recuperator • Key Data: Cash-out for equity = 25.7m€ Company positive net-cash = 6.9m€ 2017 Revenues = 16.4m€ EBITDA = 1.7m€ Employees = ~60 • Industrial fitting: Small-size Company Complementary products Carel’s commercial strength Cross-selling • Financial fitting: ~11x E
Slide 32: M&A - HygroMatik
M&A - HygroMatik • Key Data: Cash-out for equity = 56.1m€ Enterprise Value = 59.0m€ 2017 Revenues = 15.0m€ EBITDA = 4.7m€ Employees = ~60 • Industrial fitting: Small-size Company Interesting geographic positioning Strong in after-sale services Cross-selling • Financial fitting: ~
Slide 33: Disclaimer
Disclaimer This document has been prepared by CAREL Industries S.p.A for use during meetings with investors and financial analysts and is solely for information purposes. The information set out here in has not been verified by an independent audit company. Neither the Company nor any of its subsidi
Slide 34: This document and all of its contents are property of CAREL. All unauthorised use,
34 This document and all of its contents are property of CAREL. All unauthorised use, reproduction or distribution of this document or the information contained in it, by anyone other than CAREL, is severely forbidden.