Carel Industries Spa · MIL:CRL
Carel Industries Spa — Q1 2021 Earnings Presentation
36 slides from Carel Industries Spa's earnings presentation, May 6, 2021
Slide 1: 2021 – Q1 Results
CAREL INDUSTRIES S.p.A. 2021 – Q1 Results 6th May 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: Q1 2021 – Financial highlights
Q1 2021 – Financial highlights Q1 2021 results marked the highest quarterly organic growth rate in revenues ever reached by the Group in the last 10 years. This is true comparing results with both Q1 2020 and Q1 2019 • Excluding the adverse impact of the exchange rates, revenues growth would have be
Slide 3: Q1 2021 – Outstanding KPIs growth reported
Q1 2021 – Outstanding KPIs growth reported KPIs Q1 2019-2021 Revenues (m€) m€ Q1 2020 Q1 2021 Δ% +21.9% Revenue 78.7 97.6 24.0% 97.6 Revenue FX Adj. 78.7 99.9 26.9% 80.1 78.7 EBITDA 14.4 22.0 53.2% EBITDA/Revenue 18.2% 22.5% Net Profit 7.6 13.3 75.5% Capex 2.4 2.0 -16.7% Q1 2019 Q1 2020 Q1 2021 • Re
Slide 4: Q1 2021 – Revenue breakdowns
Q1 2021 – Revenue breakdowns Breakdown by region Breakdown by sector Other 1% South America 2% North America HVAC 11% 64% EMEA 73% 97.6 97.6 APAC Refrig. M€ 14% M€ 35% m€ m€ m€ m€ m€ m€ Area Q1 2019 Q1 2020 Q1 2021 Δ% Δ% fx Sector Q1 2019 Q1 2020 Q1 2021 Δ% Δ% fx EMEA 56.9 58.7 70.9 21.2% 22.1% HVAC
Slide 5: From EBITDA to Net Profit
From EBITDA to Net Profit K€ Q1 '20 Q1 '21 Δ% EBITDA 14,335 21,995 53.4% • D&A substantially in line with Q1 D&A -4,613 -4,742 2020. EBIT 9,742 17,253 77.1% Financial (charges)/income -335 -506 • Higher financial charges due to higher FX gains/losses 23 -179 amount of gross debt. • FX losses mainly
Slide 6: Q1 2021 – NFP Bridge
Q1 2021 – NFP Bridge 49.6 2.0 2.5 12.7 44.9 28.2m€ deriving from 1.3 27.5€ IFRS 16 (13.4) deriving (4.7) from IFRS 16 21.4 17.4 m€ NFP Net Profit D&A Leasing/ NWC CAPEX Provisions and Other NFP FY 2020 rent fees Q1 2021 • Excluding the IFRS 16 accounting impact, the NFP is equal to 17.4m€ • ΔNWC +12
Slide 7: Closing Remarks
Closing Remarks • A significant upturn was reported in the most important economic systems. Q1 2021 GDP Growth: China +18.3%; US +6.4%. This led to a generalized increase in demand. Demand • HVAC: In addition to the acceleration of the positive trends reported in H2 2020 (Heat-pumps, data- centers)
Slide 8: M&A
M&A
Slide 9: M&A - CFM
M&A - CFM • Key Data: Enterprise value (51%) = 23.1m€ 2020 Revenues = 14.5m€ EBITDA = 5.0m€ Employees = ~34 • Industrial fitting: Bolt-on acquisition Footprint expansion outside Western Europe Strong know-how in digital and on- field services • Company profile: a long-standing distribu
Slide 10: Annexes
Annexes
Slide 11: Shareholding structure (>5% voting rights)
Shareholding structure (>5% voting rights) CAREL Industries S.p.A. CAREL Industries S.p.A. Number of shares Voting rights Other Luigi Rossi Luciani Other Shareholders; Luigi Rossi Luciani Shareholders; S.a.p.a; 36.17% S.a.p.a; 45.05% 38.90% 24.23% 7 Industries B.V.; 5.81% 7 Industries B.V.; 4.93% Lu
Slide 12: Income statement and Balance Sheet
Income statement and Balance Sheet Income statement Balance sheet K€ Q1 2021 Q1 2020 Delta % K€ Q1 2021 FY 2020 Delta % Revenues 97,623 78,740 24.0% Fixed Capital 175,066 176,413 (0.8%) Other revenues 1,982 649 205.5% Working Capital 53,531 41,007 30.5% Operative costs (77,610) (65,034) 19.3% Employ
Slide 13: Company profile
Company profile
Slide 14: 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 15: 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 16: 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 17: 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 18: 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 19: 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 20: 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 21: 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 22: 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 23: …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 24: 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 25: 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 26: …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 27: 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 28: …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 29: 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 30: 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 31: 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 32: M&A
M&A
Slide 33: 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 34: 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 35: 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 36: This document and all of its contents are property of CAREL. All unauthorised use,
36 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.