Dometic Group Ab · OMXSTO:DOM
Dometic Group Ab — Q4 2018 Earnings Presentation
42 slides from Dometic Group Ab's earnings presentation, Feb 8, 2019
Slide 1: Interim Presentation Q4 2018
INTERIM PRESENTATION Q4 2018 8 February 2019
Slide 2: Juan Vargues, President & CEO
JUAN VARGUES, PRESIDENT & CEO
Slide 3: Q4 2018 Highlights
Q4 2018 HIGHLIGHTS Growth ▪ 6% organic growth ex RV OEM Americas ▪ Double-digit Aftermarket growth ▪ Continued strong growth in Marine ▪ Strong organic growth in EMEA Market development ▪ Positive underlying demand ▪ Slow RV OEM in Americas and Pacific Overall strong EBIT improvement ▪ Pricing and e
Slide 4: Q4 2018 Financial Summary
Q4 2018 FINANCIAL SUMMARY Net sales of SEK 4,070 m, +25% total growth NET SALES AND EBIT BEFORE I.A.C ▪ -2% organic SEKm SEKm 4,500 ▪ +7% FX 800 ▪ +20% M&A 4,000 700 Net sales 3,500 +25% 600 EBIT before i.a.c. of SEK 420 m, +35% 3,000 ▪ EBIT margin of 10.3% (9.5%) 500 2,500 + Efficiency improvements
Slide 5: Full Year 2018 Financial Summary
FULL YEAR 2018 FINANCIAL SUMMARY Net sales of SEK 18,274 m, +30% total growth NET SALES AND EBIT BEFORE I.A.C ▪ +5% organic SEKm SEKm 19,500 ▪ +3% FX 3,600 18,000 ▪ +22% M&A 16,500 Net sales 3,300 +30% 3,000 15,000 2,700 EBIT before i.a.c. of SEK 2,679 m, +44% 13,500 EBIT 2,400 ▪ EBIT margin of 14.7
Slide 6: Sales Growth in Constant Currency
SALES GROWTH IN CONSTANT CURRENCY • Average quarterly organic growth Total growth SEKm of 8% Q4 16 – Q4 18. 40% 19,000 36% 18,000 32% 17,000 28% 16,000 24% 15,000 20% 14,000 16% 13,000 12% 12,000 8% 11,000 4% 10,000 0% 9,000 -4% 8,000 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q
Slide 7: Sales Growth in Constant Currency
SALES GROWTH IN CONSTANT CURRENCY • Average growth 2014 – 2018 Total growth SEKm (adjusted for M&A): 24% 19,000 RVOEM: 7.3% 18,000 Non RVOEM 7.0% 20% 17,000 16,000 • +70% growth RVOEM from 16% before Atwood acquisition 2014 15,000 to end 2018. 14,000 12% 13,000 • +106% growth Non-RVOEM 12,000 from b
Slide 8: A More Diversified Company
A MORE DIVERSIFIED COMPANY • Continuous focus on growing outside of RV OEM 2017: SEK14,044 M 2018: SEK 18,274 M • Ambition to further reduce RV OEM exposure +2%* 51% 49% 60% 40% +7%* OTHER RV OEM * In constant currency, excluding SeaStar
Slide 9: EBIT and EBIT Margin before i.a.c
EBIT AND EBIT MARGIN BEFORE I.A.C • 1.5% point EBIT margin EBIT RUN RATE 14.7% (13.2%) improvement rolling 12 months SEKm EBIT-margin 1,050 15% 900 14% 750 600 13% 450 300 12% 150 0 11% Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 EBIT EBIT margin, rolling 12 months
Slide 10: Restructuring Q4 2018 – Group-wide Initiative
RESTRUCTURING Q4 2018 – GROUP-WIDE INITIATIVE TO OPTIMIZE FOOTPRINT AND REDUCE COSTS TOTAL NET SEK -92 m • Americas, SEK -34m: • Set up production in Mexico • Consolidation of local warehouses • Office consolidation • EMEA, SEK -57m: • Right size factories • Restructuring SG&A • Office consolidation
Slide 11: Kampa
KAMPA Kampa • An innovative provider of Retail and Aftermarket products for Mobile Living based in the UK • Kampa significantly broadens Dometic’s Retail and Aftermarket offering in EMEA, with good potential for further expansion and profitable growth • Sales of GBP 40 million and EBITDA of GBP 7 mi
Slide 12: Product Highlights
PRODUCT HIGHLIGHTS Dometic PLB40 portable power pack • Brings a completely new product category to the market • Among the most compact and lightweight in its class while delivering unparalleled power performance • Robust, outdoor-proof construction for use in multiple environments • Convenient three
Slide 13: Americas
AMERICAS Net sales of SEK 2,177 m, -10% organic NET SALES AND EBIT MARGIN BEFORE I.A.C. ▪ Growth ex RV of 31% 3,000 20.0% ▪ Aftermarket growth of 13%, ex SeaStar 2,500 ▪ Strong evolution of Seastar, +13%* 15.0% OEM, 70% ▪ Soft RV OEM AM, 30% 2,000 1,500 10.0% EBIT before i.a.c. of SEK 234 m, +30% 1,
Slide 14: EMEA
EMEA Net sales of SEK 1,415 m, +8% organic NET SALES AND EBIT MARGIN BEFORE I.A.C. ▪ Aftermarket growth of 13% 2,200 20.0% ▪ OEM growth of 5% 2,000 1,800 ▪ Strong growth in RV AM of 20%, CPV AM +22% 15.0% OEM, 62% 1,600 and Marine AM +8% AM, 38% 1,400 ▪ Focus on more dedicated sales resources 1,200
Slide 15: APAC
APAC Net sales of SEK 478 m, -5% organic NET SALES AND EBIT MARGIN BEFORE I.A.C. ▪ Sales negatively affected by softer demand of RV 600 24.0% in Pacific 22.0% 500 20.0% ▪ Discontinuation of low profit products continues 18.0% OEM, 42% ▪ RV in Asia develops well 400 16.0% AM, 58% ▪ Retail +1% 14.0% 3
Slide 16: Q4 Strategy Execution
Q4 STRATEGY EXECUTION Profitable expansion 1 ▪ Kampa acquisition completed ▪ Strong development of Aftermarket ▪ Continued strong growth in Marine ▪ Dedicated organizations generating very positive results, especially Retail and CPV in the US 2 Product leadership ▪ Continued implementation of a glob
Slide 17: Per-Arne Blomquist, CFO
PER-ARNE BLOMQUIST, CFO Mobile living made easy. “> DOMETIC
Slide 18: 5 Years Sales and EBIT Development
5 YEARS SALES AND EBIT DEVELOPMENT NET SALES ▪ Sales growth +108% 108% 18,274 ▪ EBIT before i.a.c +163% 14,044 12,388 11,486 8,806 2014 2015 2016 2017 2018 EBIT BEFORE I.A.C 163% 2,679 1,621 1,860 1,412 1,018 2014 2015 2016 2017 2018
Slide 19: Dometic Group Trends
DOMETIC GROUP TRENDS SALES (SEKm) EBIT BEF. I.A.C (SEKm) 19,000 2,700 18,000 2,550 17,000 2,400 2,250 16,000 2,100 15,000 1,950 14,000 1,800 13,000 1,650 1,500 10,000 1,350 Dec Mar Jun Sep Dec Mar Jun Sep Dec Dec Mar Jun Sep Dec Mar Jun Sep Dec 2016 2017 2018 2016 2017 2018 EBIT BEF. I.A.C (%) OPERA
Slide 20: Business Area Development
BUSINESS AREA DEVELOPMENT CPV SALES SPLIT, RV +7% +12% (3% CC) (7% CC) BUSINESS AREA* 10,000 2,200 9,500 2,150 2,100 9,000 2,050 8,500 2,000 8,000 1,950 1,900 7,500 1,850 7,000 1,800 Dec Mar Jun Sep Dec Mar Jun Sep Dec Dec Mar Jun Sep Dec Mar Jun Sep Dec 2016 2017 2018 2016 2017 2018 MARINE +215% RE
Slide 21: Key Ratios
KEY RATIOS Q4 Q4 FY FY SEKm 2018 2017 2018 2017 Sales Net sales 4,070 3,252 18,274 14,044 Growth 25.1% 16.7% 30.1% 13.4% Organic growth, % -2.4% 16.2% 4.7% 11.5% Profitabitlity Gross profit 1,276 951 5,951 4,445 Gross profit, % 31.4% 29.2% 32.6% 31.7% EBIT before i.a.c 420 310 2,679 1,860 EBIT befor
Slide 22: Net Sales Bridge Q4
DOMETIC GROUP NET SALES BRIDGE Q4 SEKm TRANSLATION FX DETAILS +25% Share of Net Sales impact 4,070 USD 148 67% EUR 50 22% AUD 3 2% 3,252 HKD 4 2% 20% 7% -2% GBP 3 1% CNY 2 1% Other 11 5% Total 220 Q4 2017 Translation FX Organic growth M&A Q4 2018
Slide 23: Regional Results, as in the Interim Report
REGIONAL RESULTS, AS IN THE INTERIM REPORT Change (%) Change (%) SEK million Q4 2018 Q4 2017 Rep. Adj.1) FY 2018 FY 2017 Rep. Adj.1) Americas3) 2,177 1,511 44% 32% 9,758 6,329 54% 51% EMEA 1,415 1,248 13% 9% 6,706 5,962 12% 7% Asia Pacific 478 493 -3% -5% 1,810 1,753 3% 3% Net sales 4,070 3,252 25%
Slide 24: Earnings per Share – Q4
EARNINGS PER SHARE – Q4 SEKm Total Group 2018 EPS 2017 EPS Net Sales 4,070 3,252 • Q4 2018: EBIT (before i.a.c) 420 1.42 310 1.05 • Total tax rate: 41% (-166%) Finance net -96 -0.32 -87 -0.29 Tax paid: 24% (34%) • Q4 2017 was positively affected by Tax -96 -0.32 173 0.58 the US tax reform of SEK 278
Slide 25: Earnings per Share – Full Year
EARNINGS PER SHARE – FULL YEAR SEKm Total Group 2018 EPS 2017 EPS Net Sales 18,274 14,044 • Full Year 2018: EBIT (before i.a.c) 2,679 9.05 1,860 6.29 • Total tax rate: 27% (12%) Tax paid: 15% (6%) Finance net -431 -1.46 -206 -0.70 • 2017 was positively affected by the Tax -580 -1.96 -206 -0.70 US ta
Slide 26: Capex & Product Development
CAPEX & PRODUCT DEVELOPMENT (SEKm, % OF NET SALES) CAPEX 140 2.9% 5% 120 2.7% 4% 100 80 2.4% 3% ▪ Full Year 2018 CAPEX: 60 127 117 2.3% of net sales. 100 2% 40 71 84 88 78 (2.2% in 2017) 68 63 1% 20 0 0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 2017 2017 2017 2018 2018 2018 2018 PD 100 2.3% 5% 2.9% 2.5%
Slide 27: Working Capital Development
WORKING CAPITAL DEVELOPMENT SEKm 600 23.1% 23.6% 25% 22.5% 400 20% ▪ Average CWC/LTM net sales: 23.8% excluding SeaStar 200 219 253 311 15% 23.6% including SeaStar 183 148 0 -141 -149 10% -200 -546 5% -400 -825 0% -600 -800 -5% -1,000 -10% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 2017 2017 2017 2018 201
Slide 28: Working Capital
WORKING CAPITAL SEKm 4,633 Comment: 4,298 4,317 Inventory include approx. 3,986 93 MSEK of tariffs and 148 MSEK 3,376 of pre-buy ahead of tariffs. 3,707 3,701 3,628 3,772 3,350 2,520 2,159 2,045 1,485 1,705 -1,459 -1,562 -1,595 -1,356 -1,491 December March June September December 2017 2018 2018 2018
Slide 29: Cash Flow
CASH FLOW SEKm 1,000 250% 900 200% 800 153% 134% 150% 700 123% 373 600 100% 500 943 50% 844 859 400 667 0% 300 570 536 200 352 -50% 100 -100% 0 -44 -27 -150% -100 -200 -200% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 2017 2017 2017 2018 2018 2018 2018 Operating cash flow Cash conversion
Slide 30: Net Debt Leverage and Net Debt Details
NET DEBT LEVERAGE AND NET DEBT DETAILS ACTUAL NET DEBT ▪ Leverage of 2.6x net 3.5 3.3 3.3 3.3 debt/EBITDA in constant 3.0 3.0 2.8 currency and excl. Kampa 2.5 2.0 1.8 2.3 2.3 1.7 1.7 1.5 1.3 1.0 0.5 1.0 0.0 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 SEKm Q4 2016 Q1 2017
Slide 31: Financial Targets
FINANCIAL TARGETS Mid/long term FY 2015 FY 2016 FY 2017 FY 2018 Financial target Net Sales Growth1 8% 7% 12% 5% 5% EBIT Margin2 12.3% 13.1% 13.2% 14.7% 15% Net Debt / EBITDA 2.4x 1.7x 3.3x 2.8x3 2.0x Dividend Policy No dividend 40% 40% 40%4 40% 1 Organic sales growth 2 EBIT before I.A.C. 3 Leverage
Slide 32: Summary FY 2018
SUMMARY FY 2018 Organic sales growth of 5% ▪ Growth in all business areas ▪ Aftermarket sales growth of 7% ▪ Successful integration of Seastar Strong EBIT margin improvement to 14.7% (13.2%) ▪ Improved profitability in EMEA and APAC Key business process-owners in place Accelerated focus on improved
Slide 33: Outlook 2019
OUTLOOK 2019 Organic growth to be slightly positive ▪ Global life style trends ▪ Further expansion in businesses outside of RV ▪ Product development ▪ Uncertain RV OEM in Americas and APAC EBIT margin close to 15 percent ▪ Grow Aftermarket, CPV and Marine ▪ Continued focus on cost and efficiency imp
Slide 34: Q&A
Q&A Mobile living made easy. “> DOMETIC
Slide 35: Appendix
APPENDIX Mobile living made easy. “> DOMETIC
Slide 36: Appendix A – Quarterly Summary Key Financials
APPENDIX A QUARTERLY SUMMARY KEY FINANCIALS SEK million Q4 2018 Q4 2017 FY 2018 FY 2017 Net sales 4,070 3,252 18,274 14,044 EBITDA 469 280 3,113 2,228 % of net sales 11.5% 8.6% 17.0% 15.9% Operating profit (EBIT) 328 191 2,587 1,907 % of net sales 8.1% 5.9% 14.2% 13.6% Operating profit (EBIT) before
Slide 37: Appendix B – Group P&L
APPENDIX B GROUP P&L SEK million Q4 2018 Q4 2017 FY 2018 FY 2017 Net sales 4,070 3,252 18,274 14,044 Cost of goods sold -2,794 -2,301 -12,323 -9,599 Gross profit 1,276 951 5,951 4,445 Sales expenses -573 -460 -2,259 -1,791 Administrative expenses -224 -145 -855 -667 Other operating income and expens
Slide 38: RV - Global Market
RV - GLOBAL MARKET MARKET TRENDS Americas EMEA - ROLLING TWELVE MONTHS REGISTRATIONS (000S UNITS) +10% ▪ R12M: 483,700 units, -4% 130 ▪ Continued weak US market 120 EMEA 110 ▪ R12M: 129,000 units, +10% (5 countries) 100 ▪ Continued demand in key markets 90 Australia ▪ R12M: 23,000 units 3%* 80 Jan J
Slide 39: CPV - Heavy Trucks
CPV - HEAVY TRUCKS EUROPE – ROLLING THREE MONTHS REGISTRATIONS (000S UNITS) MARKET TRENDS -1% 70 60 EMEA 50 ▪ Interest for active cooling compartments is 40 growing fast in the passenger vehicle segment 30 20 10 Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec 10 10 11 11 12 1
Slide 40: Marine - US Power Boat Sales
MARINE - US POWER BOAT SALES ROLLING TWELVE MONTHS (Y-O-Y % CHANGE) MARKET TRENDS Americas 16 ▪ 1% growth for outboard boats 12 11-40ft full year 2018 ▪ SeaStar outperforms underlying 8 +3.2% market 4 ▪ Used boat market remains strong with little inventory 0 -4 -8 -12 -16 Jun Dec Jun Dec Jun Dec Jun
Slide 41: Disclaimer
DISCLAIMER This document contains statements that constitute forward looking statements. These statements appear in a number of places in this document and include statements regarding the intent, belief or current expectations of the customer base, estimates regarding future growth in the different
Slide 42: Mobile living made easy. “> DOMETIC
Mobile living made easy. “> DOMETIC