Slide 1: Dometic Q4 2023 Report
DOMETIC Q4 2023 REPORT JANUARY 31, 2024
Slide 2: Juan Vargues, President & CEO
JUAN VARGUES PRESIDENT & CEO
Slide 3: Q4 2023 Highlights
Q4 2023 HIGHLIGHTS INCREASED MARGIN AND IMPROVED NET DEBT LEVERAGE Market development ▪ Macro environment and market conditions remain uncertain ▪ Retail inventory levels in Service & Aftermarket and Distribution on the way down ▪ Decline in OEM driven by Marine. RV more stable Performance ▪ -13% or
Slide 4: Q4 2023 Financial Summary
Q4 2023 FINANCIAL SUMMARY Net sales of SEK 5,327 m, -14% total growth ▪ -13% Organic -14% ▪ -1% FX 6,172 ▪ 0% M&A Net Sales EBITA before i.a.c EBITA before i.a.c. of SEK 465 m, +8% ▪ EBITA margin of 8.7% (7.0%) 8% EPS of SEK 0.16 (0.09) 5,327 Adjusted EPS SEK 0.67 (0.54) 465 430 Operating cash flow
Slide 5: Full Year 2023 Financial Summary
FULL YEAR 2023 FINANCIAL SUMMARY Net sales of SEK 27,775 m, -7% total growth ▪ -12% Organic -7% ▪ 5% FX 29,764 ▪ 0% M&A Net Sales EBITA before i.a.c -12% EBITA before i.a.c. of SEK 3,463 m, -12% 27,775 ▪ EBITA margin of 12.5% (13.2%) 3,931 3,463 EPS of SEK 4.17 (5.58) Adjusted EPS SEK 5.93 (8.32) Op
Slide 6: Sales Growth Q4 2023
SALES GROWTH Q4 2023 Rolling 12 Months, MSEK Q4 2023 45,000 Net Sales SEK 5,327 m 36,000 Total growth (-14%) ▪ Americas -20% 27,000 ▪ EMEA -6% ▪ APAC -1% 18,000 ▪ Marine -12% ▪ Global -25% 9,000 Organic growth (-13%) 0 ▪ Americas -16% ▪ EMEA -9% ▪ APAC 1% ▪ Marine -12% Q4 2021 Q1 2022 Q2 2022 Q3 202
Slide 7: Net Sales by Application Area
NET SALES BY APPLICATION AREA SEK B 35 Other Applications ▪ Mainly sanitation and safety products 30 11% ▪ Driven by RV and CPV 11% Power & Control 25 21% ▪ Strong performance in Marine Steering Systems 21% 20 13% ▪ Structural growth in Mobile Power Solutions 8% 8% ▪ Driven by RV, Marine and Outdoor
Slide 8: Net Sales by Sales Channel
NET SALES BY SALES CHANNEL SEK B 35 30 ▪ RV OEM 22% Group sales ▪ 49% in 2017 25 29% 29% 20 15% 9% 11% 27% 15 10% 28% 35% 11% 30% 32% 36% 28% 6% 10 15% 44% 43% CPVOEM 5 61% 57% 50% 61% 54% Marine OEM 22% RVOEM 0 2017 2018 2019 2020 2021 2022 2023 OEM 2023 OEM Service & Aftermarket Distribution
Slide 9: Service & Aftermarket Net Sales
SERVICE & AFTERMARKET NET SALES Proforma Net sales in constant currency ▪ Retailer destocking after high consumer demand and large purchases in 2021 and Q1 2022 ▪ Moving into normal seasonal trend ▪ Continued gradual YoY improvement, -3% 10% YoY organic growth compared to -5% in Q3 5% ▪ Continued gr
Slide 10: EBITA and EBITA Margin before i.a.c.
EBITA AND EBITA MARGIN BEFORE I.A.C EBITA before i.a.c. run rate 12.5% (13.2%) EBITA MSEK margin Q4 2023 1.350 16% EBITA margin before i.a.c. 8.7% (7.0%) 1.200 14% ▪ Driven by stronger Gross margin 1.050 ▪ Price management, cost reductions and 12% sales mix 900 10% ▪ Prioritizing margin before volum
Slide 11: Americas Q4 2023
AMERICAS Q4 2023 Net sales SEK 951 m, -20% ▪ Organic growth -16% ▪ Service and Aftermarket negative, but showing improvement ▪ Decline driven by RV OEM while RV industry production turned positive in the quarter Net sales and EBITA margin before i.a.c. EBITA before i.a.c. SEK -57m (-60) 2,000 10% ▪
Slide 12: EMEA Q4 2023
EMEA Q4 2023 Net sales SEK 1,498 m, -6% ▪ Organic growth -9% ▪ Service & Aftermarket and Distribution remain low, but retailer inventory situation is improving ▪ RV OEM sales slightly negative while CPV OEM showed growth Net sales and EBITA margin before i.a.c. 2,500 20% EBITA before i.a.c. SEK 5 m
Slide 13: APAC Q4 2023
APAC Q4 2023 Net sales SEK 580 m, -1% ▪ Organic growth 1% ▪ Single-digit decline in Service & Aftermarket ▪ Growth driven by OEM and Distribution EBITA before i.a.c. SEK 152 m (129) Net sales and EBITA margin before i.a.c. ▪ EBITA margin 26.2% (22.0%) 600 30% ▪ Improvement driven by price management
Slide 14: Marine Q4 2023
MARINE Q4 2023 Net sales SEK 1,447 m, -12% ▪ Organic growth -12% ▪ Growth in Service & Aftermarket ▪ Lower industry boat production impact OEM net sales ▪ Similar trend as in Q3 2023 Net sales and EBITA margin before i.a.c. EBITA before i.a.c. SEK 313 m (422) 2,000 30% ▪ EBITA margin 21.6% (25.5%) 2
Slide 15: Global Q4 2023
GLOBAL Q4 2023 Net sales SEK 851 m, -25% ▪ Organic growth -22% ▪ Temporary decline for the Igloo business ▪ Retailers are re-balancing their inventory levels EBITA before i.a.c. SEK 53 m (1) Net sales and EBITA margin before i.a.c. ▪ EBITA margin 6.2% (0.1%) 2,500 14% ▪ Improved margins in Other glo
Slide 16: Igloo Performance
IGLOO PERFORMANCE Hardside coolers industry data, US Sell through growth YoY (value) +5.8% 2023 performance +3.5% ▪ End user demand remains strong +2.4% ▪ Continues to gain market share Last 12 months Last 3 months Last month ▪ 2H 2023 net sales impacted by Source NPD. Retail sales. 2023 November in
Slide 17: 2023 Strategy Execution
2023 STRATEGY EXECUTION 1▪ Profitable expansion ▪ Distribution and Service & Aftermarket share of sales 57% (39% in 2018) ▪ DTC sales +19% in 2023 and representing 8% of total non-OEM business (6% in 2022) ▪ Improved margin 2H 2023 shows resilience 2▪ Product leadership ▪ Innovation index 17% (17%)
Slide 18: 2023 – Examples of Key Product Launches
2023 – EXAMPLES OF KEY PRODUCT LAUNCHES
Slide 19: Cost Reductions
COST REDUCTIONS ▪ The two programs launched in 2019 and 2022 completed in 2023 ▪ Cost in the quarter SEK -68 m ▪ Total cost of SEK -960 m since start. In line with plan ▪ 2,000 employees affected ▪ SEK 525 m in annual saving compared to 2019 ▪ SEK 600 m will be realized as volumes increase ▪ Continu
Slide 20: Sustainability
SUSTAINABILITY ▪ LTIFR1) better than target KPI Focus area Actual Actual 2024 Target ▪ Implementation of Health & Safety guidelines last year continues LTIFR1) People 1.9 1.5 <2.0 ▪ Share of female managers improved to 29% Share of female managers People 29% 24% 27% (24%) CO2 ton / Net sales SEK m P
Slide 21: Stefan Fristedt, CFO
STEFAN FRISTEDT CFO
Slide 22: Q4 EBITA Development
Q4 EBITA DEVELOPMENT Organic + FX EBITA before i.a.c. SEK m (% of sales) ▪ Gross margin improved to 27.0% (23.4%) ▪ Sales mix SEK 465 m ▪ Price Management SEK 430 m (8.7%) (7.0%) ▪ Cost reductions ▪ Lower raw material costs ▪ Gradually declining negative effect from logistic costs and manufacturing
Slide 23: Cash Flow for the Period
CASH FLOW FOR THE PERIOD Q4 2023 ▪ Operating cash flow SEK 488 m (1,117) Q4 Q4 Jan-Dec Jan-Dec ▪ Robust performance SEK m 2023 2022 2023 2022 ▪ Q4 2022 a tough comparison EBIT 242 236 2,682 2,789 Adjustments for non-cash items 206 217 1,512 1,898 ▪ Temporary increased investments in fixed assets Cha
Slide 24: Operating Cash Flow
OPERATING CASH FLOW 2023 - A RECORD YEAR SEK m 2,299 2,125 1,417 1,301 1,043 1,117 917 875 738 812 724 546 488 311 346 294 181 84 -20 -398 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2019 2020 2021 2022 2023
Slide 25: Working Capital
WORKING CAPITAL ACCOUNTS PAYABLES DAYS ACCOUNTS RECEIVABLES DAYS ▪ LTM Working capital declined to 31% of net sales ▪ 25% in the quarter ▪ Inventory balance SEK 7,3 b (9,3) INVENTORY DAYS WORKING CAPITAL ▪ Sequential decline since Q3 2022 ▪ # of days are decreasing ▪ Continuous actions to optimize W
Slide 26: Capex and Research & Development
CAPEX AND RESEARCH & DEVELOPMENT (SEKm, % OF NET SALES) CAPEX 300 3.2% 5.1% 8 2.7% 6 Q4 2023 CAPEX 200 272 4 5.1% (3.2%) of net sales 100 152 135 199 115 2 ▪ Executed an option for a building 111 111 99 109 related to Mobile Cooling in Texas 0 0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ▪ Full year 2.1% (1.9%) 20
Slide 27: Net Debt to EBITDA Leverage
NET DEBT TO EBITDA LEVERAGE ▪ Net debt leverage ratio declined to 2.7x ▪ Adequate headroom to covenants ▪ Reduction compared to Q4 2022 driven by strong operating cashflow 3.1 3.2 3.2 ▪ Reduction compared to Q3 2023 3.0 2.8 2.8 2.9 3.0 3.0 2.9 2.7 2.8 2.6 2.7 2.7 supported by FX and improved EBITDA
Slide 28: Debt Maturity Profile
DEBT MATURITY PROFILE SEK b 1.0 ▪ Used cash at hand to repay EUR 300 m bond in 3.3 September 2023 2.0 ▪ Average maturity 2.5 years (2.8 years incl 1+1 year extension option) 0.8 ▪ Undrawn revolving credit facility of EUR 200 m 3.3 3.3 maturing in 2026 (but with 1+1 year extension option) 2.6 2024 20
Slide 29: 2023 Dividend Proposal
2023 DIVIDEND PROPOSAL Dividend per share SEK 2.45 • SEK 1.90 (1.30) per share proposed by Board of 2.15 2.30 2.05 Directors 1.85 1.90 • 46% of 2023 net profit 151% • Average dividend payout ratio 2016-2023: 39% 1.30 • Dividend target of at least 40% of net profit over a business cycle 40% 41% 40% 4
Slide 30: 2023 Summary
2023 SUMMARY Business highlights ▪ A year impacted by geopolitical and macroeconomic uncertainty ▪ Demand impacted by high retail inventory levels and interest rates ▪ Organic growth -12% ▪ EBITA margin 12.5% (13.2%) with YoY improvements 2H ▪ Operating cash flow SEK 5.2 b, strongest ever ▪ Tracking
Slide 31: Dometic Transformation Journey
DOMETIC TRANSFORMATION JOURNEY 2017-2020 Net Sales development ▪ Initially three geographical regions managing all products to all verticals ‒ High complexity level ▪ Gradually shifting the focus from a regional led approach to a product led approach globally ‒ Segmentation and additional focus on f
Slide 32: New Segment Structure
NEW SEGMENT STRUCTURE* FROM TO • Gradually shifting focus from a regional lead to a SEGMENT SEGMENT BUSINESSES product lead approach with focused teams driving INCLUDED specific product solutions globally LAND VEHICLES AMERICAS • Mobile Cooling Solutions a new segment AMERICAS • Product solutions •
Slide 33: SEED ine
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Slide 34: Disclaimer
DISCLAIMER SOME STATEMENTS HEREIN ARE FORWARD-LOOKING AND THE ACTUAL OUTCOME COULD BE MATERIALLY DIFFERENT. IN ADDITION TO THE FACTORS EXPLICITLY COMMENTED UPON, THE ACTUAL OUTCOME COULD BE MATERIALLY AFFECTED BY OTHER FACTORS, (A) CHANGES IN ECONOMIC, MARKET AND COMPETITIVE CONDITIONS, (B) SUCCESS
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