Slide 1: Nilfisk Financial Results 2018
Nilfisk Financial Results 2018 Webcast presentation March 1, 2019
Slide 2: Agenda
Agenda 1 2 3 4 5 6 Highlights Business unit Financials The road Outlook 2019 Q&A update towards our mid-term targets 2 NILFISK | FINANCIAL RESULTS 2018 | WEBCAST
Slide 3: Financial highlights Solid Q4 2018
Financial highlights Solid Q4 2018 • Financial guidance updated in October 2018 achieved • 3.6% organic growth in branded professional business driven by EMEA (3.4% excluding private label) and Americas (5.0%) • Planned negative growth of -51.5% in private label sales following a last time buy after
Slide 4: Financial highlights 2018 below expectations
Financial highlights 2018 below expectations • Total organic growth of 2.0%, driven by solid performance in EMEA and strong growth in Specialty Professional leading to organic growth of 2.8% in the branded professional business • Overall growth was below initial expectations due to: – Negative growt
Slide 5: 2018 – ongoing transformation
2018 – ongoing transformation • Significant milestones achieved in simplifying our business – Divestment of five non-core businesses with annual revenue of approximately 75 mEUR – Ongoing strategic review of the Consumer business – Consolidated production footprint globally with exit from 7 of 18 pr
Slide 6: Agenda
Agenda 1 2 3 4 5 6 Highlights Business unit Financials The road Outlook 2019 Q&A update towards our mid-term targets 6 NILFISK | FINANCIAL RESULTS 2018 | WEBCAST
Slide 7: EMEA: Solid and stable growth
EMEA: Solid and stable growth Comments • Q4 organic growth of 3.4% in branded professional business after continued strong growth in Germany (-7.4% incl. private label) • FY organic growth in branded professional business of 3.6% excl. private label • Total organic growth of 1.2% impacted by a decli
Slide 8: AMERICAS: Disappointing year
AMERICAS: Disappointing year Comments • Q4 organic growth in Americas of 5.0% after positive growth in US and strong growth in Canada and LATAM • US production output at all time high and order backlog going down • FY organic growth of -0.3% below expectations due to performance in US impacted by –
Slide 9: AMERICAS: US actions initiated
AMERICAS: US actions initiated Comments • Execution of a revised go-to-market strategy – A stronger segment focus (Industry & CCI) and focus on optimal indirect coverage in high potential states – Improved end-user focus (pull) – Strategic account execution in collaboration with indirect channel • I
Slide 10: APAC: A year of building for the future
APAC: A year of building for the future Comments • Organic growth of -0.1% in Q4. Continued strong performance in China offset by poor performance in the Pacific • FY organic growth 1.7% • Strong market performance in China, posting double-digit growth in all four quarters of 2018, but overall growt
Slide 11: Specialty Professional: Divestments and a strong year
Specialty Professional: Divestments and a strong year Comments • Organic growth of 5.4% in Q4 lower than previous quarters due to IVS impacted by lower activity in the European manufacturing sector • FY organic growth of 11.4%, with 10.0% growth in the continuing businesses; IVS and FOOD • Outdoor a
Slide 12: Specialty Consumer: Stabilizing topline with improved profitability
Specialty Consumer: Stabilizing topline with improved profitability Comments • Organic growth of 3.5% in Q4, driven by a strong performance in Southern Europe and China • FY organic growth of 1.4%, mainly due to the DIY segment in Europe • Overall growth impacted by the earlier than expected closure
Slide 13: Agenda
Agenda 1 2 3 4 5 6 Highlights Business unit Financials The road Outlook 2019 Q&A update towards our mid-term targets 13 NILFISK | FINANCIAL RESULTS 2018 | WEBCAST
Slide 14: EBITDA margin improved
EBITDA margin improved Operating performance (excl. phantom shares) Comments 11.1% 11.4% 11.5% 10.0% • Operating performance improved by 0.1 percentage point, ending at 11.5% • EBITDA improvement resulting from lower overhead cost ratio of 33.5% (excluding phantom shares), down 0.3 percentage point
Slide 15: Investments and cost drivers, 2017 to 2018
Investments and cost drivers, 2017 to 2018 mEUR Comments 2 6 8 • Lower overhead cost in 2018 than 2017 3 7 369 4 • Investments in building the future of 18 mEUR, above 8 the planned 16 mEUR 6 1 • 7 mEUR expensed funded by cost saving program and 6 349 cost control Overhead Investments Effect of Infl
Slide 16: The upgraded cost saving program on track
The upgraded cost saving program on track Comments • During 2018 the full potential from the cost saving program upgraded from 35 mEUR to 50 mEUR 2017 2019 2020 Full potential EUR million Accumulated 2018 Expected Expected end 2020 • Execution of cost saving program continues to Annualized accumulat
Slide 17: Gross margin slightly disappointing
Gross margin slightly disappointing Comments • Gross margin of 42.0%, below our expectations 42.2% • Negatively impacted by: 41.9% 42.0% – Changes in product mix (-0.6 pp) 40.8% – Increased raw material prices & tariffs impact (-0.5 pp) – Lower capacity utilization in production (-0.4 pp) – Cost inf
Slide 18: Working capital and RoCE
Working capital and RoCE Working Capital ratio LTM Comments 20.0% • Working capital ratio 18.5%, above expected 18.5% 17.6% normalized level due to: 16.2% – Inventory build-up following production footprint moves – Higher accounts receivables during the year – Decrease in payables (phantoms share ef
Slide 19: P/L summary
P/L summary Comments • Revenue declined by 2.5% after divestment impact of -1.9%. Revenue in continuing business of 1,001 EUR million 2018 2017 mEUR with negative divestment impact of 6% in 2019 Operating result before amortization/impairment of acquisition-related intangibles and special items 93.6
Slide 20: Agenda
Agenda 1 2 3 4 5 6 Highlights Business unit Financials The road Outlook 2019 Q&A update towards our mid-term targets 20 NILFISK | FINANCIAL RESULTS 2018 | WEBCAST
Slide 21: Organic growth road to mid-term target 2020
Organic growth road to mid-term target 2020 2018 activities Nilfisk branded professional business 2019 activities impacting 2019 impacting 2020 3-5% • Refined go-to-market in the US • Sales blueprint roll-out with segment focus and one sales • Building on the momentum in Above 3.0% force selling all
Slide 22: Progressing with autonomous machines
Progressing with autonomous machines • The stated aspirations: Revenue from autonomous machines of up to 10% in (2022-2024) • We continue our strategy of working with different partners (currently Carnegie and Blue Ocean) to ensure our long-term goal of a full portfolio of connected autonomous solut
Slide 23: EBITDA road to mid-term target 2020
EBITDA road to mid-term target 2020 Excluding IFRS 16 adjustment 2018 activities impacting 2019 2019 activities impacting 2020 Gross margin (expected uplift of ~1.5 Gross margin (expected uplift of percentage points): ~0.6 percentage point): • Divestments of low margin • Procurement optimization bus
Slide 24: Investments to build the future
Investments to build the future Comments • Increasing investments to build the future • Our 2019 investments falls into the following categories: 24-26 – Digitalization and autonomous of 12 mEUR – IT investments of 3 mEUR 20 18 – Marketing investments of 3 mEUR 14-16 – Other transformational cost of
Slide 25: RoCE road to mid-term target 2020
RoCE road to mid-term target 2020 Excluding IFRS 16 adjustment 2018 activities 2019 activities impacting 2019 impacting 2020 • Negative impact from high inventory • Distribution Centre footprint and build-up due to production moves >20.0% local optimization impacting on LTM basis 16.7% • Global alig
Slide 26: Agenda
Agenda 1 2 3 4 5 6 Highlights Business unit Financials The road Outlook 2019 Q&A update towards our mid-term targets 26 NILFISK | FINANCIAL RESULTS 2018 | WEBCAST
Slide 27: Outlook 2019
Outlook 2019 Organic growth EBITDA margin Above 3.0% Above 14.4% Organic growth in the Nilfisk branded EBITDA margin before special items professional business IFRS 16 impact of 2.4 percentage points expected Approximately -10.0% Organic growth private label Approximately 0% Organic growth in consum
Slide 28: Agenda
Agenda 1 2 3 4 5 6 Highlights Business unit Financials The road Outlook 2019 Q&A update towards our mid-term targets 28 NILFISK | FINANCIAL RESULTS 2018 | WEBCAST
Slide 29: Q&A
Q&A 29 NILFISK | FINANCIAL RESULTS 2018 | WEBCAST
Slide 30: Forward-looking statements
Forward-looking statements This presentation and related comments contain forward-looking statements. Such statements are subject to many uncertainties and risks, as various factors, of which several are beyond Nilfisk Holding’s control, may cause that the actual development and results differ mater