Sit S.p.a. · MIL:SIT
Sit — Investor Presentation (July 2019)
35 slides from Sit's investor presentation, Jul 9, 2019
Slide 1: Company presentation and 2019Q1 results
Company presentation and 2019Q1 results July 2019
Slide 2: Table of contents
Table of contents • SIT overview • Heating business • Smart Gas Metering business • Key financials • 2019Q1 results Annexes 2
Slide 3: SIT at a glance
SIT at a glance Organic growth of revenues and margins ▪ 2018FY Revenues: 359,7€ (+11,0%) ▪ 2013FY - 2018FY Revenues: CAGR 7,9% ▪ 2018FY EBITDA adjusted*: 50,6€ (+9,1%) ▪ 2018FY Net income adjusted*: 19,6€ (+32,3%) ▪ 2013FY - 2018FY EBITDA adjusted*: CAGR 7,2% Market and technological leadership ▪ A
Slide 4: SIT develops and manufactures measuring devices and systems for domestic gas equipment
SIT develops and manufactures measuring devices and systems for the safety, comfort and performance of domestic gas equipment Heating Smart Gas Metering Mechanical Electronic Integrated Flue Exhaust Sensors Controls Controls Systems Fans Systems Gas meters DOMESTIC SMART GRIDS Fireplaces APPLIANCES
Slide 5: SIT currently operates two business divisions
SIT currently operates two business divisions Heating Smart Gas Metering 2018 sales: 287,0 € 2018 sales : 72,1 € (79,9%) (20,1%) Components and systems for the control, regulation A new generation of intelligent remotely controlled and safety of gas appliances for domestic heating, static gas meters
Slide 6: Main customers
Main customers Heating Smart Gas Metering 6
Slide 7: Table of contents
Table of contents • SIT overview • Heating business • Smart Gas Metering business • Key financials • 2019Q1 results Annexes 7
Slide 8: Central Heating: boilers combining heating and domestic hot water
Central Heating: boilers combining heating and domestic hot water SIT is the world’s top name in the production of multifunctional, regulating, safety gas valves. SIT is the main player for the non captive electronic controls market Innovative solutions for sub-assembled and pre- Air management tech
Slide 9: Direct heating: fireplaces and stoves (both gas and pellet)
Direct heating: fireplaces and stoves (both gas and pellet) • SIT provides mechanical controls (gas valves and sensors), electronic controls (main boards, remote controls and user interfaces) and fans for gas fireplaces, stoves and spaceheaters • Main markets are North America, UK and Europe 9
Slide 10: Storage Water Heating for domestic water heating
Storage Water Heating for domestic water heating SIT provides mechanical controls and pilots • Markets include North America, Argentina and Australia • New efficiency standards and electronic features have been recently introduced in the US market providing opportunities to increase technological co
Slide 11: Professional cooking and catering appliances
Professional cooking and catering appliances • SIT provides mechanical controls and fans for (i) collective and community cooking appliances and (ii) high end cooker hoods • Main markets are Europe and USA • SIT is market leader in Europe 11
Slide 12: Table of contents
Table of contents • SIT overview • Heating business • Smart Gas Metering business • Key financials • 2019Q1 results Annexes 12
Slide 13: Smart Gas Metering - driven by regulation and smart technology
Smart Gas Metering - driven by regulation and smart technology • European directive on smart gas metering (EU 2009/73) • Italy: early adopter with directive ARG/gas155/08 issued by the national Authority (AEEG) • European installed base over 120 million pcs • Innovative thermo-flow sensor technology
Slide 14: Smart Gas Metering – market size provides growth potential
Smart Gas Metering – market size provides growth potential European Gas Meter installation base is To current date main European countries are in different over 120 million units stages of massive residential meters roll-out plans • UK: regulatory framework (SMET2) requires to complete replacement o
Slide 15: Table of contents
Table of contents • SIT overview • Heating business • Smart Gas Metering business • Key financials • 2019Q1 results Annexes 15
Slide 16: Key financials
Key financials EBITDA Adjusted* Revenues CAGR 359,7 60 EBITDA Adjusted Margin 16 7,9% 14,3% 13,3% 50,6 324,0 14,5% 15,5% 14 50 46,3 288,1 44,6 14,1% 13,3% 12 259,0 264,7 40 246,1 35,6 34,3 35,3 10 30 8 6 20 4 10 2 0 0 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 39,9 158,5 156,5 Net d
Slide 17: Table of contents
Table of contents • SIT overview • Heating business • Smart Gas Metering business • Key financials • 2019Q1 results Annexes 17
Slide 18: 2019Q1 – Revenues
2019Q1 – Revenues Breakdown by Division Euro million 2019Q1 % 2018Q1 % diff % Heating 62,1 77,1% 70,4 80,7% (11,7%) Smart Gas Metering 17,7 21,9% 16,1 18,5% 9,6% Total business sales 79,8 99,0% 86,5 99,1% (7,8%) Other revenues 0,8 1,0% 0,8 0,9% 6,7% Total revenues 80,6 100% 87,2 100% (7,6%) 87,2 Con
Slide 19: 2019Q1 - Heating sales by geography
2019Q1 - Heating sales by geography Euro million 2019Q1 % 2018Q1 % diff % Italy 10,9 17,6% 12,4 17,7% (12,2%) Europe (excluding Italy) 32,1 51,7% 39,8 56,6% (19,4%) America 13,7 22,1% 11,5 16,3% 19,4% Asia / Pacific 5,4 8,6% 6,6 9,4% (18,8%) Total business sales 62,1 100% 70,4 100% (11,7%) • Italy r
Slide 20: 2019Q1 - Smart Gas Metering keeps growing
2019Q1 - Smart Gas Metering keeps growing Smart Gas Metering business sales by application Euro million 2019Q1 % 2018Q1 % diff % Residential 16,7 94,6% 15,5 96,0% 8,0% Commercial & Industrial 0,9 5,0% 0,6 3,6% 52,9% Other 0,1 0,4% 0,1 0,4% (4,3%) Total business sales 17,7 100% 16,1 100% 9,6% • At Ma
Slide 21: 2019Q1 - Key financial results
2019Q1 - Key financial results (Euro million) 2019Q1 % 2018Q1 % diff% • Change in revenues of -7,6% is due to: Revenues 80,6 100,0% 87,2 100,0% -7,6% - Heating, -8,3€, -11,7% - Smart Gas Metering, +1,5€, +9,6% EBITDA (1) 12,5 15,5% 13,8 15,8% -9,6% EBIT (1) 7,1 8,9% 9,4 10,8% -24,0% • At same forex
Slide 22: 2019Q1 – EBITDA bridge
2019Q1 – EBITDA bridge Euro million 13,8 0,5 -0,4 -1,7 12,5 1,2 -0,9 EBITDA Vol/Mix Prices, net Operations Forex, net Other EBITDA 2018Q1 2019Q1 22
Slide 23: 2019 – Key projects and initiatives
2019 – Key projects and initiatives • New product development – In the Heating sector, at the main industry trade exhibition (Frankfurt – ISH), SIT disclosed an advanced stage concept for a new platform of Integrated Systems that was very well received by customers – Product development for the US m
Slide 24: 2019 – Outlook
2019 – Outlook • The positive outlook for the Smart Gas Metering business is supported by the significant order backlog and consolidated improvement in product cost thanks to redesign and purchasing economies • In the Heating Division volumes are expected to slightly contract versus the previous yea
Slide 25: Table of contents – Annexes
Table of contents Annexes – Group history and milestones – Heating business division – market segments and products – 2014 LBO transaction – April 2019 shareholder base – Sales coverage and global manufacturing footprint – Quality certifications and standards – Regulatory statements – Disclaimer 25
Slide 26: Milestones in SIT history
Milestones in SIT history 1953: Established by Pierluigi and Giancarlo de’ Stefani 1964 – 1997: international expansion • 1964, first mechanical control exported to Germany 2009 – 2016: Smart Gas Metering from scratch • 1974, first foreign European subsidiary in the Netherlands • 2009, a joint ventu
Slide 27: Heating business division – market segments and products
Heating business division – market segments and products SIT operates significantly in the following market segments: Current product families include: • Central Heating, boilers for domestic and water • Mechanical controls, multifunctional safety valves for gas heating • Electronic controls, mainbo
Slide 28: Heating business division – strong competitive position
Heating business division – strong competitive position Mechanical controls Electronic controls • 34,4% of Divisional revenues • 10,6% of Divisional revenues Central Heating • Market share ~50% • Market share ~14% (excluding captive • #1 globally production) • 10,7% of Divisional revenues • 4,0% Div
Slide 29: Change in 2014 net debt was due to LBO
Change in 2014 net debt was due to LBO Federico • In 2014 Federico de Stefani, acquired the 56,7% of SIT shares de’ Stefani from other shareholders via LBO transaction using the 100% 100 % owned Newco SIT Technologies • Equity value of the transaction was 116€ SIT Technologies New Debt for • Funding
Slide 30: Shareholder base
Shareholder base Federico de’ Stefani 0,43% 100 % 30,01% SIT Technologies Market 72,27 % 69,56% 27,26 % SIT spa SIT Tech Market Treasury Shares Shareholder structure as of April 7, 2019 Fully diluted scenario: • SIT Spa owns 0,47% of Treasury Shares • Conversion of all n. 5.224.733 Warrants at €13.0
Slide 31: Global coverage of sales organization
Global coverage of sales organization Arnsberg, GERMANIA Production Randers, DANIMARCA Brno, REP. CECA plant Hoogeveen, OLANDA Budapest, UNGHERIA Sales office Brasov, ROMANIA Moscow, RUSSIA Agent Rovigo Artemovsk, UCRAINA Seoul, COREA Milano Suzhou, CINA Los Angeles, CALIFORNIA Padova: HEADQUARTERS
Slide 32: Manufacturing facilities based on local for local continental platforms
Manufacturing facilities based on local for local continental platforms Rovigo 1, Italy ◼ Mechanical controls, Integrated systems, Sensors, Smart Gas Meters Rovigo 2 ◼ Captive aluminum die casting and machining ◼ High volumes automated assembly lines Brasov, Romania ◼ Mechanical controls, Integrated
Slide 33: High quality standards and certifications
High quality standards and certifications All plants comply with 2016 - Padova (Italy) – Testing Laboratory – CSA certificate of Quality System Certification qualification ISO 9001:2000 2015 - Suzhou (China) plant - CGAC Manufacturing plant recognition 2013 - Suzhou (China) plant - Quality System Ce
Slide 34: Regulatory statement
Regulatory statement Regulatory statement: The manager responsible for the preparation of the company's accounts, Paul Fogolin, hereby declares, as per article 154-bis, paragraph 2, of the "Testo Unico della Finanza", that all information related to the company's accounts contained in this presentat
Slide 35: Disclaimer
Disclaimer • This presentation has been prepared by SIT S.p.A. only for information purposes and for the presentation of the Group’s results and strategies. • For further details on the SIT Group, reference should be made to publicly available information. • Statements contained in this presentation