Carel Industries Spa · MIL:CRL
Carel Industries Spa — FY2023 Earnings Presentation
42 slides from Carel Industries Spa's earnings presentation, Mar 6, 2024
Slide 1: 2023 – FY Results
CAREL INDUSTRIES S.p.A. 2023 – FY Results 6th March 2024 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: Company presentation disclaimer
Company presentation disclaimer By attending this meeting and accepting this presentation (the “Presentation”), you will be deemed to have agreed that: (i) you will not disclose information contained herein to anyone within your firm (other than subject to these restrictions) or outside your firm an
Slide 3: Company presentation disclaimer
Company presentation disclaimer Forward-Looking Statements: this document may include projections and other “forward-looking” statements within the meaning of applicable securities laws. In particular, all statements that address expectations or projections about the future, including statements abo
Slide 4: FY 2023 – Highlights
FY 2023 – Highlights For the third consecutive year CAREL reported a >20% revenue growth rate (constant FX) and ->21% adj. Ebitda margin • Reported Revenue equal to 650m€ in line with the guidance given in October. • Organic growth in revenues (LFL and constant exchange rates) stood at 10.0% +21.1%
Slide 5: FY 2023 – Results
FY 2023 – Results KPIs FY 2023 Revenues bridge m€ FY 2022 FY 2023 Δ% 58.7 650.2 Revenue 544.9 650.2 19.3% 54.6 544.9 (7.9) Organic Revenue 544.9 599.4(1) 10.0% EBITDA 111.7 137.2 22.8% (2) Adj. EBITDA 114.7 139.9 21.9% Adj. EBITDA /Revenue 21.1% 21.5% Net Profit 62.1 70.9 14.2% Capex 26.8 27.4 2.2%
Slide 6: FY 2023 – Revenue breakdowns
FY 2023 – Revenue breakdowns Breakdown by region Breakdown by sector Other 1% South America 2% North America 15% Refrig. EMEA HVAC 27% 69% 650.2 72% 650.2 APAC M€ 14% M€ m€ m€ m€ m€ Area FY 2022 FY 2023 Δ% Δ% fx Sector FY 2022 FY 2023 Δ% Δ% fx EMEA 382.7 450.2 17.6% 17.9% HVAC 371.9 472.1 27.0% 28.7
Slide 7: From EBITDA to Net Profit
From EBITDA to Net Profit • Higher D&A mainly due to the purchase price allocation amortization. EBITDA 111,725 137,183 22.8% D&A -24,414 -32,783 • Higher Financial charges due to the macro trend on interest rates, the bridge EBIT 87,311 104,400 19.6% loan for the Kiona acquisition and non-cash inte
Slide 8: FY 2023 – NFP Bridge
FY 2023 – NFP Bridge 184.0 -47.6m€ 95.8 32.7m€ from IFRS 16 1.0 21.2 48.2 27.4 (14.3) 35.7 (196.5) 33.4m€ 16.7 from (74.5) IFRS 16 7.4 63.1 (32.7) m€ NFP Net Profit D&A Leasing/ NWC CAPEX Dividends Buy-back Other NFP FY 2023 M&A Capital NFP FY 2022 rent fees (no increase FY 2023 extraord.) • Total N
Slide 9: Stone, 5th generation software development environment
In March, the 5th generation of CAREL’s software development environment, named Stone, will be launched at the MCE Exhibition in Milan. Ideal development path It will natively support all CAREL products. - Optimized teamwork allowing multiple people to work simultaneously on the same project. 1 A (m
Slide 10: Integration process: main integration projects, results and expectations
2024 Integration process Results and expectations main integration projects • STEERING COMMITTEE • REFRIGERATION • 2023 - Following the acquisition of Kiona a steering - Keeping Kiona HW-agnostic, CAREL field In 2023 the company posted approximately committee has been established and consists of con
Slide 11: Closing Remarks
Closing Remarks • For the third consecutive year, CAREL reported a >20% revenue growth rate (constant exchange rate), with a balanced mix between organic and external growth. FY 2023 • In spite of a deteriorating scenario, in particular in the HP sector in Europe and a weak demand in Results refrige
Slide 12: Annexes
Annexes
Slide 13: Income statement and Balance Sheet
Income statement and Balance Sheet Income statement Balance sheet K€ FY 2023 FY 2022 Delta % K€ FY 2023 FY 2022* Delta % Revenues 650,247 544,852 19.3% Fixed Capital 507,725 313,282 62.10% Other revenues 6,007 5,780 3.9% Working Capital 77,509 85,899 -9.80% Operating costs (519,070) (438,906) 18.3%
Slide 14: Company Profile
Company Profile
Slide 15: Leading provider of advanced control solutions for HVAC/R
Leading provider of advanced control solutions for HVAC/R Key financials – 2023A • HVAC: Industrial, Residential, Growing key Commercial markets • Refrigeration: Food Retail and Revenue EBITDA EBITDA margin Net income Food Service €650m €137m ~21.1% €70.9m Leadership in • Control solutions premium +
Slide 16: 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 17: One-stop-shop portfolio of components and platforms
…through a one-stop-shop portfolio of components and platforms Adiabatic humidifiers and Programmable controls HMI and unit terminals Parametric controls Isothermal humidifiers evaporative coolers Electronic controls easily programmable and customizable User interfaces for units and systems Entry le
Slide 18: Long track record of revenue growth
Long track record of revenue growth 650 545 420 327 332 280 231 255 203 Revenue (€m) 1990s 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A 2022A 2203A 140 112 85 63 65 51 55 38 43 Adj. EBITDA (€m) 1990s 2000A 2001A 2
Slide 19: 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 increase its market leadership market share • Co
Slide 20: 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 growth supported by secular trends Positioning and technological innovation capability hard to 3 replicate Highly efficient global operations serving locally di
Slide 21: 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 39% #1 SIGNIFICANT ROOM FOR key E
Slide 22: Attractive market growth supported by secular trends
2 Attractive market growth supported by secular trends Secular trends… …supporting attractive market growth Reference HVAC and refrigeration Market GROWING • Improvement in LIVING STANDARDS POPULATION increasing demand for HVAC/R • Focus on WASTE REDUCTION in CHANGE IN food sector CONSUMER • Increas
Slide 23: 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 24: 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 25: Positioning and innovation capability hard to replicate
3 Positioning and innovation capability hard to replicate >5% OF REVENUE1 ~12% OF TOTAL WORKFORCE Invested annually in R&D dedicated to R&D 6 R&D CENTRES PROPRIETARY SOFTWARE COMBINING 5 DOMAINS Vast library of proprietary software modules UNIQUE 01100 • Hardware & Firmware developed over the past 2
Slide 26: 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 Share OEM Large 39% proprietary diversified EM / Low cost solutions competitors competitors 27% 14% 8% Vertical niche 5% 6% ✓✓✓ ✓✓ ✓ ✓✓✓ approach Innovation
Slide 27: 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 2014 competitors competitors HEOS SISTEMA Waterloop system with DC tech for refrigeration Vertical niche approach ✓✓✓ ✓✓ ✓✓✓ 2015 HECU SISTEMA Inno
Slide 28: Highly efficient global operations serving locally diversified customers
4 Highly efficient global operations serving locally… NORTH AMERICA WESTERN EUROPE NORTH APAC GLOBAL PRODUCTION FOOTPRINT 2 9 Plants Plants 273 1,437 Employees Employees DIRECT AND HIGHLY SKILLED SALES NETWORK 94 x3 395 Sales force Sales force 1 88 x3 Plant Sales force 2 3 BEST POSITIONED TO CAPTURE
Slide 29: Track record of profitable growth
5 Track record of profitable growth Double-digit growth Strong profitability High conversion to net income Cash generative business Revenue1 (€m) EBITDA1 (€m) Net Income1 (€m) Operating cash2 (€m) 137 103 650 71 62 555 112 49 85 60 420 53 50 65 35 35 45 327 332 63 31 31 40 280 51 255 47 25 28 231 43
Slide 30: Global expansion, innovation and services
6 A Global expansion, innovation and services Pursuing additional OF LE BIG S IN H Consolidation of ET FER CA opportunities MENI F E IN R VEAC UDME IN V M AO O L EF S & leadership positions RI T RS ECS ROV NE improving services ULGRNTSTION SE ERCOOV G in HVAC S HA M ER FIC IPTEW E A offer with IoT a
Slide 31: Pursuing external growth through disciplined bolt-on M&A
6 Pursuing external growth through disciplined bolt-on B 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, mainly a
Slide 32: M&A
M&A
Slide 33: M&A – 2023 – Kiona
M&A – 2023 – Kiona • Industrial fitting: ✓ Increasing R&D fire-power in digital solutions by joining CAREL and Kiona teams. ✓ Strengthening CAREL capabilities to develop and sell digital services. ✓ Opening new commercial opportunities for • Company profile: Kiona is a leading Norway-based Software
Slide 34: M&A – 2022 – Senva
M&A – 2022 – Senva • Company profile: SENVA is a US company located in Oregon specialising in the design and manufacture of a wide range of sensors, mainly in the air-conditioning and ventilation sectors, and with a significant presence in indoor air quality. • Rationale: the acquisition of SENVA is
Slide 35: M&A – 2022 – Klingenburg
M&A – 2022 – Klingenburg • Company profile: Klingenburg GmbH and Klingenburg International Sp. Z.o.o. are leading producers of a wide range of products used mainly for heat recovery in ventilation and humidification systems, adiabatic cooling and air purification. • Rationale: The transaction ration
Slide 36: M&A – 2022 – Sauber
M&A – 2022 – Sauber • Company profile: Sauber is based in Porto Mantovano (Mantua) and is active mainly in the sector of on-field installation and maintenance services for HVAC/humidification systems in commercial and residential buildings, with a strong focus on energy saving and optimization. • Ra
Slide 37: M&A – 2022 – Arion
M&A – 2022 – Arion • Company profile: Arion is the joint venture based in Bolgare (Bergamo Province - Italy), established in 2015 between CAREL and Bridgeport S.p.A. with the aim of developing sensor technology expressly dedicated to the air conditioning and refrigeration sectors. • Rationale: The t
Slide 38: M&A – 2021 – CFM
M&A – 2021 – CFM • Company profile: a long-standing distributor and partner in Turkey as well as a provider of digital and on-field services and complete high added value solutions dedicated to OEMs, contractors and end users in the Turkish HVAC (Heating, Ventilation and Air conditioning) and Refrig
Slide 39: M&A – 2021 – Enginia
M&A – 2021 – Enginia • Company profile: Enginia has been operating in the AHU sector since 1997 and has grown year after year to become a recognized leader, particularly as regards the manufacture production of dampers for air handling units. • Rationale: expansion of the product portfolio in the HV
Slide 40: M&A – 2018 – Recuperator
M&A – 2018 – Recuperator • Company profile: Recuperator is an Italy-based company active in the design, production and sale of "air-to-air" heat exchangers. • Rationale: Integration with Recuperator expands CAREL’s product portfolio in the HVAC market, consolidating its role as a supplier of complet
Slide 41: M&A – 2018 – HygroMatik
M&A – 2018 – HygroMatik • Company profile: Hygromatik is based in Henstedt- Ulzburg, near Hamburg. It designs, produces and markets humidifiers and related accessories, in the industrial, commercial and wellness field. • Rationale: integration with HygroMatik will consolidate Carel's positioning in
Slide 42: This document and all of its contents are property of CAREL. All unauthorised use,
42 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.