Carel Industries SpA · MIL:CRL
Carel Industries SpA — FY2020 Earnings Presentation
35 slides from Carel Industries SpA's earnings presentation, Mar 4, 2021
Slide 1: 2020 – FY Results
CAREL INDUSTRIES S.p.A. 2020 – FY Results 4th March 2021 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: FY 2020 – Financial highlights
FY 2020 – Financial highlights Thanks to its resilience and the ability to seize significant opportunities even in a challenging scenario, CAREL continued to grow across all the economic KPIs and generated an outstanding cash flow. • Excluding the adverse impact of the exchange rates, revenues growt
Slide 3: FY 2020 – Non-financial highlights
FY 2020 – Non-financial highlights ESG topics are one of the most important elements in CAREL’s strategy development. Significant results were achieved in 2020, with more to come in 2021. In April CAREL gained one notch in the MSCI ESG Rating assessment receiving a rating of BB. In 2020 CAREL accept
Slide 4: FY 2020 – All the KPIs are positive
FY 2020 – All the KPIs are positive KPIs Revenues Bridge (m€) m€ FY 2019 FY 2020 Δ% +3.1% Revenue 327.4 331.6 1.3% Revenue FX Adj. 327.4 336.7 2.8% 4.2 5.1 0.6 327.4 331.6 337.3 EBITDA 63.1 65.2 3.3% EBITDA/Revenue 19.3% 19.7% Net Profit 35.0 35.1 0.3% Capex 23.6 13.3 n.r. Revenues Δ Revenues FX No
Slide 5: FY 2020 – Revenue breakdowns
FY 2020 – Revenue breakdowns Breakdown by region Breakdown by sector Other 1% South America 2% North America 12% HVAC 66% EMEA 71% 331.6 331.6 APAC Refrig. M€ 15% M€ 33% m€ m€ m€ m€ Area FY 2019 FY 2020 Δ% Δ% fx Sector FY 2019 FY 2020 Δ% Δ% fx EMEA 226.5 236.3 4.3% 5.0% HVAC 215.4 217.5 1.0% 2.1% AP
Slide 6: From EBITDA to Net Profit
From EBITDA to Net Profit K€ FY '19 FY '20 Δ% EBITDA 63,132 65,194 3.3% • Higher D&A mainly linked to higher Capex in 2019. D&A -16,769 -18,482 EBIT 46,363 46,713 0.8% Financial (charges)/income -1,431 -1,489 • Higher FX losses mainly related to US FX gains/losses -152 -921 $ devaluation vs Euro in
Slide 7: FY 2020 – NFP Bridge
FY 2020 – NFP Bridge 85% Cash conversion FCF ~38m€ rate* 62.1 15.2m€ deriving 12.8 49.6 from IFRS 16 28.2€ 12.0 deriving from IFRS 16 1.7 1.0 13.3 (35.1) 46.9 4.2 21.4 (18.5) (3.9) m€ NFP Net Profit D&A Leasing/ NWC CAPEX Other Shares Dividends IFRS 16 NFP FY 2019 rent fees buy-back FY 2020 • Exclud
Slide 8: Closing Remarks
Closing Remarks • During 2020, a significant share (approximately 60%) of CAREL’s production capacity were hit by a number of temporary lockdowns in Italy and China. Operations • The Group responded promptly leveraging its “mirroring production strategy” thanks also the additional flexibility grante
Slide 9: Annexes
Annexes
Slide 10: Shareholding structure (>3% voting rights)
Shareholding structure (>3% voting rights) CAREL Industries S.p.A. CAREL Industries S.p.A. Number of shares Voting rights Other Shareholders 19.54% Luigi Rossi Luciani S.a.p.a Other 45.05% Shareholders 31.37% Luigi Rossi Luciani S.a.p.a 36.17% 7 Industries B.V. 5.81% Capital Research and Management
Slide 11: Income statement and Balance Sheet
Income statement and Balance Sheet Income statement Balance sheet K€ FY 2019 FY 2020 Delta % K€ FY 2019 FY 2020 Delta % Revenues 327,358 331,610 1.3% Fixed Capital 167,957 176,413 5.0% Other revenues 3,611 3,704 2.6% Working Capital 45,232 41,007 (9.3%) Operative costs (267,837) (270,120) 0.9% Emplo
Slide 12: Company profile
Company profile
Slide 13: Leading provider of advanced control solutions for HVAC/R
Leading provider of advanced control solutions for HVAC/R Key financials – 2020A • HVAC: Industrial, Residential, Growing key Commercial markets • Refrigeration: Food Retail and Revenue EBITDA EBITDA margin Net income Food Service €332m €65m ~19.7% €35m Leadership in • Control solutions premium +10%
Slide 14: 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 15: …through a 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 16: Long track record of profitable organic growth
Long track record of profitable organic growth Revenue (€m) 327 332 280 231 255 203 1990s 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A Adj. EBITDA (€m) 63 65 55 51 43 38 1990s 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2
Slide 17: 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 18: 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 19: 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 20: 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 21: 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 22: …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 23: 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 5 R&D CENTRES PROPRIETARY SOFTWARE COMBINING 5 DOMAINS Vast library of proprietary software modules UNIQUE 01100 • Hardware & Firmware developed over the past 1
Slide 24: 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 25: …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 26: Highly efficient global operations serving locally diversified customers
4 Highly efficient global operations serving locally… NORTH AMERICA WESTERN EUROPE NORTH APAC GLOBAL PRODUCTION FOOTPRINT 1 5 Plant Plants 146 924 Employees Employees DIRECT AND HIGHLY SKILLED SALES NETWORK 65 187 Sales force Sales force 1 82 x3 Plant Sales force 1 3 BEST POSITIONED TO CAPTURE R&D C
Slide 27: …diversified blue-chip customers
4 …diversified blue-chip customers HVAC REFRIGERATION GLOBAL BLUE-CHIP APAC 15% EMEA >9,000 <4% South America 71% Customers 2% BROAD & HIGHLY from first customer1 DIVERSIFIED In c. 100 c. 20% North America 13% countries worldwide from top-15 customers2 2020A revenue LONG-TERM ~80% ~70% BUSINESS of T
Slide 28: 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 Revenue1 (€m) EBITDA1 (€m) Net Income1 (€m) Operating cash2 (€m) 52.9 327.0 332.0 35.0 35.0 65.2 63.1 45.0 31.2 30.7 280.2 39.8 255.4 50.9 47.0 25.1 231
Slide 29: 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 30: 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 31: M&A
M&A
Slide 32: 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 33: 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 34: 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 35: This document and all of its contents are property of CAREL. All unauthorised use,
35 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.