Interpump Group S.p.a. · MIL:IP
Interpump — Q2 2024 Earnings Presentation
56 slides from Interpump's earnings presentation, October 2024
Slide 1: Interpump Group October 2024
INTERPUMP GROUP October 2024
Slide 2: Index
INDEX ▪• GROUP OVERVIEW KEY HIGHLIGHTS ▪• 2024 OUTLOOK 4Q-2023 PRELIMINARY FINANCIAL RESULTS ▪ 2Q2024 FINANCIAL RESULTS • GROUP SUSTAINABILITY PATH ▪ ANNEX • OUTLOOK • ANNEX 1
Slide 3: Index
INDEX ▪• GROUP OVERVIEW KEY HIGHLIGHTS • 4Q-2023 PRELIMINARY FINANCIAL RESULTS • GROUP SUSTAINABILITY PATH • OUTLOOK • ANNEX 2
Slide 4: Interpump a delivering group
3Q-3Q2023YTD INTERPUMP A DELIVERING GROUP ▪ € 2.240m of turnover and € 536m of EBITDA (24% on net sales) in 2023 divided between two divisions − Hydraulics and Water Jetting ▪ Hydraulics: around 75% of Group sales, EBITDA margin around 22% − Wide range of components for mobile and non-mobile hydraul
Slide 5: Excellence track record
2023 INTERPUMP A DELIVERING GROUP – EXCELLENCE TRACK RECORD ▪ Since IPO in 1996 a track record of excellence and GROUP 1996-2023 SALES EVOLUTION (€ million) resilience ▪ Sales: only 4 years of decrease driven by strategic 2020: COVID crisis Sales: -5.4% activities review (1) or extraordinary externa
Slide 6: Excellence track record: FCF and cash conversion
2023 2024 A DELIVERING GROUP – EXCELLENCE TRACK RECORD ▪ FCF: growing generation and consistent GROUP 1996-2023 FCF EVOLUTION (€ million) exploitation in worsening environment – EBITDA excellence and resilience 250.0 – TWC proactive management 200.0 • Customer quality 150.0 • Tactical supply chain a
Slide 7: Sales diversification
ANNEX INTERPUMP A DELIVERING GROUP – SALES DIVERSIFICATION GROUP 2023 sales: € 2.240m PACIFIC AREA: 11% OTHERS: 1% EARTH MOVING MACHINE: 8% GENERIC DEALERS: 16% CONSTRUCTION: 8% REST of THE WORLD: 9% CLEANING: 5% AGRICOLTURE: 10% GENERIC CONTRACTORS: 3% EUROPE: 52% OTHER INDUSTRIAL SECTOR: 8% LIFT:
Slide 8: Market diversification
3Q-3Q2023YTD INTERPUMP A DELIVERING GROUP – MARKET DIVERSIFICATION WATER JETTING HYDRAULICS HIGH PRESSURE PUMPS DEVICES FLOW HANDLING COMPONENTS & SYSTEMS • Power take-offs, cylinders, hydraulic motors & gear • Piston pumps 1-2,000hP used in • Stainless steel agitators, mixers, pumps, valves high-pr
Slide 9: Application diversification
3Q-3Q2023YTD INTERPUMP A DELIVERING GROUP – APPLICATION DIVERSIFICATION HYDRAULICS WATER JETTING TRUCK OUTFITTERS FOOD, COSMETICS (1) AUTOMOTIVE EARTH MOVING Tipping trucks High-pressure homogenizers Rail engine heads deburring Excavators Trash collection Water-jet food cutting, Bodywork cutting Bac
Slide 10: Brand & product diversification
3Q-3Q2023YTD INTERPUMP A DELIVERING GROUP – BRAND&PRODUCT DIVERSIFICATION WATER JETTING HYDRAULICS HIGH PRESSURE PUMPS FLOW HANDLING COMPONENTS DEVICES & SYSTEMS INTERPUMP BERTOLI INTERPUMP HYDRAULICS PRATISSOLI Homogenizers WALVOIL – WHITE - EUROFLUID MUNCIE POWER Directional control valves, ALFA V
Slide 11: Strategy milestones
3Q-3Q2023YTD INTERPUMP A DELIVERING GROUP – STRATEGY MILESTONES FLEXIBILITY • Vertically integrated manufacturing DIVERSIFICATION (wherever possible) Product mix and sales strategy • Across the widest possible range • Use of general-purpose programmable of applications, products, can adapt fast to m
Slide 12: Strategy milestones
3Q-3Q2023YTD INTERPUMP A DELIVERING GROUP – STRATEGY MILESTONES Volatility reduction through multiple cycles exposure Effective reaction to unexpected swings FLEXIBILITY • Vertically integrated manufacturing DIVERSIFICATION (wherever possible) Product mix and sales strategy • Across the widest possi
Slide 13: 2023-25 Group commitments
3Q-3Q2023YTD INTERPUMP A DELIVERING GROUP – 2023-25 GROUP COMMITMENTS ▪ 2023-25 commitments, 1 target with 2 guidelines (1) 2022-25 GROUP EXPECTED SALES EVOLUTION (1) 3,500 2022-2025 sales growth: +25% ▪ One target: sales 3,000 – around 25% of total growth(2) 2,500 2,000 ▪ Two guidelines: profitabil
Slide 14: Index
INDEX ▪• GROUP OVERVIEW KEY HIGHLIGHTS ▪• 2024 OUTLOOK 4Q-2023 PRELIMINARY FINANCIAL RESULTS • GROUP SUSTAINABILITY PATH • OUTLOOK • ANNEX 13
Slide 15: Different divisions, different environments
2024 DIFFERENT DIVISIONS, DIFFERENT ENVIRONMENTS ▪ Most recent trends underline (1) – Hydraulics: ongoing sales normalisation/stagnation – Water Jetting: sales and moreover backlog acceleration ▪ 2024 financial expectations updating – Sales: high single digit organic decrease • Impact of all 2024 pe
Slide 16: Margin protection & FCF exploitation track record
2024 MARGIN PROTECTION & FCF EXPLOITATION TRACK RECORD 2009, 2020 and 1H2024 SALES, EBITDA & FCF EVOLUTION (1-2) % change compared to previous reporting period 200% 185.3% 150% 100% 82.1% 63.2% 50% 2009 2020 1H2024 0% -12.6%-13.6% -9.3% -13.2% -50% -29.7% -48.4% Sales EBITDA FCF 2 2 GROUP 2019-2021
Slide 17: Index
INDEX DELIVERING MARGIN PROTECTION & CASH IMPROVEMENT ▪• GROUP OVERVIEW KEY HIGHLIGHTS ▪• 2024 OUTLOOK 4Q-2023 PRELIMINARY FINANCIAL RESULTS ▪ 2Q2024 FINANCIAL RESULTS • GROUP SUSTAINABILITY PATH • OUTLOOK • ANNEX 16
Slide 18: 2Q2024 delivering margin protection & cash improvement
2Q2024 DELIVERING MARGIN PROTECTION & CASH IMPROVEMENT ▪ Delivering margin protection and cash improvement 2024 SALES & EBITDA EVOLUTION (1-2) % change compared to previous reporting period ‒ Delivering margin protection 1Q2024 2Q2024 • A 9.5% sales decrease resulted in a 12.7% EBITDA 0% -2% decreas
Slide 19: 2Q2024 Group improved margin protection
2Q2024 GROUP – IMPROVED MARGIN PROTECTION ▪ 2Q2024 – Sales: Water Jetting and acquisitions mitigate lasting Hydraulic normalisation – Profitability: improved margin protection with 90bps of diluition in 2Q compared to 130bps in 1Q – NFP: reduction despite CAPEX and acquisitions Million € 2QUARTER 1H
Slide 20: 2Q2024 divisions margin protection
2Q2024 DIVISIONS – MARGIN PROTECTION DRIVEN BY HYDRAULICS ▪ Hydraulics – Sales: important market applications still in a normalisation phase – EBITDA: increased protection with 100bps of diluition in 2Q compared to 170bps in 1Q ▪ Water-Jetting – Sales: organic growth enhanced by acquisitions – EBITD
Slide 21: 2Q2024 sales normalisation and growth
2Q2024 SALES – NORMALISATION AND GROWTH ▪ 2Q2024: Hydraulics still impacted by normalisation, 2Q2024 GROUP SALES EVOLUTION Water Jetting stronger than comparison – Hydraulics: worse “orbital motors“, sluggish other -7.4% businesses – Water Jetting: “high pressure systems” best € 592m -9.5% +2.1% 0.2
Slide 22: 1H2024 sales normalisation and growth
2Q2024 SALES – NORMALISATION AND GROWTH 1H2024 GROUP SALES EVOLUTION -7.5% € 1.185m -9.3% +1.9% -0.1% € 1.096m 1H2024 HYDRAULICS SALES EVOLUTION 1H2024 WATER JETTING SALES EVOLUTION -12.8% +8.1% € 885m -12.9% +0.1% 0% € 771m +7.4% -0.3% € 324m € 300m +1.1% 21
Slide 23: 2Q2024 EBITDA business model flexibility
2Q2024 EBITDA – BUSINESS MODEL FLEXIBILITY 1H2024 EBITDA EVOLUTION (1-2) (% on Net Sales) 24.9% 24.2% 23.1% 23.0% SALES DOWN BY 9.4% AT CONSTANT PERIMETERS • Labour force adjustment Group average employees' number: down almost by 2% • G&A expenses • Purchase cost Group temporary workers: down by mor
Slide 24: 2Q2024 NFP cash generation from TWC
2Q2024 NFP – IN 2Q CASH GENERATION FROM TWC ▪ January: US$300m Private Shelf agreement NFP EVOLUTION (1-2) (€ m) ‒ US$100 single tranche issued • 8 years average duration and 4.17% coupon € 34m € 0m € 3m € 0m € 517m € 486m € 80m € 81m ▪ June: NFP of € 517m compared to € 486m as of December 2023(2) –
Slide 25: NFP CAPEX last important project
2Q2024 NFP – CAPEX – LAST IMPORTANT PROJECT ▪ New Interpump Hydraulics headquarter – 62,000 sq. metres, a total area increase of around 30% – Best environmental standards • Photovoltaic plants with an estimated 2,300,000 kWh annual production and consequently 1.219 Tco2 savings • 10x better thermal
Slide 26: Acquisitions perfect fit with Group strategy
2Q2024 NFP – ACQUISITIONS – PERFECT FIT WITH GROUP STRATEGY ▪ 4 acquisitions and put-call options exercise ▪ Acquisitions with a perfect fit with Group growth and diversification strategy in 1H2024 – Strengthening Group’s global network • PP China & YRP, “Flow Processing” in China: entry into the pl
Slide 27: Acquisitions: Alfa Valvole
2Q2024 NFP – ACQUISITIONS – PERFECT FIT WITH GROUP STRATEGY ▪ Alfa Valvole ILLUSTRATIVE EXAMPLE - DELAYED COKER PLANT (1) – Completing Group product catalogue – Increasing exposure to Oil&Gas market applications ▪ Opportunities in both short and medium-long term – Short term • Dosing pump inside Gro
Slide 28: Index
INDEX ▪• GROUP OVERVIEW KEY HIGHLIGHTS ▪• 2024 OUTLOOK 4Q-2023 PRELIMINARY FINANCIAL RESULTS ▪ 2Q2024 FINANCIAL RESULTS • GROUP SUSTAINABILITY PATH ▪ ESG PATH • OUTLOOK • ANNEX 27
Slide 29: ESG path concreteness
ESG PATH CONCRETENESS “A falling tree makes more noise than a growing forest” Lao Tzu 28
Slide 30: ESG path three priorities for three pillars
ESG PATH THREE PRIORITIES FOR THREE PILLARS SUPPORTED GRI 2023-2025 KEY TARGETS and SDG ▪ Definition of Group “Carbon neutrality” strategy 2023 E ▪ Reduction of Group “Carbon intensity” 2025 ▪ Increase of renewed electricity consumption 2025 305-1 and 2 302-1 ▪ Injury rate improvement 2024 S ▪ ESG s
Slide 31: ESG path a delivering group
ESG PATH A DELIVERING GROUP ▪ All 2023 ESG Plan actions delivered – Building Group ESG foundation ▪ Multi annual actions delivery duly on going – Leading to 2023 and 2050 decarbonisation target ▪ Group ESG methodological approach improvements – Higher number of Group companies included in the sample
Slide 32: ESG path a delivering group
3Q2023YTD ESG PATH A DELIVERING GROUP ANALYSIS AND MEASUREMENT BUILDING GROUP LEADING TO ESG FOUNDATIONS 2030 AND 2050 DECARBONISATION TARGETS 2022 2023 2024 2025 2027 • E.1 - Carbon neutrality strategy • E.2 - Carbon intensity reduction • E.4 - Circular economy (phase 1) • E.3 - Increase of renewab
Slide 33: ESG path 2024 actions in progress
ESG PATH 2024 ACTIONS – IN PROGRESS ACCORDING TO TIMETABLE ▪ All activities are in progress according the 2023-2025 ESG JOURNEY related timetable 2024 ACTIONS E.7 Product ECO-Design ▪ Focussing on 2024 specific actions S.1 (1) Injury rate improvement – E.7: all preparatory activities completed, now
Slide 34: Index
INDEX ▪• GROUP OVERVIEW KEY HIGHLIGHTS ▪• 2024 4Q-2023 PRELIMINARY FINANCIAL RESULTS OUTLOOK ▪• 1Q2024 GROUP SUSTAINABILITY PATH FINANCIAL RESULTS ▪• ANNEX OUTLOOK • ANNEX 33
Slide 35: Annex disclaimer
ANNEX ANNEX DISCLAIMER 34
Slide 36: Annex disclaimer: performance indicators and definitions
ANNEX ANNEX DISCLAIMER − PERFORMANCE INDICATORS AND DEFINITIONS The Group uses several alternative measures that are not identified as accounting parameters in the framework of the IFRS standards in order to allow the trend of economic operations and the Group's financial position to be better evalu
Slide 37: Annex disclaimer: performance indicators and definitions
ANNEX ANNEX DISCLAIMER − PERFORMANCE INDICATORS AND DEFINITIONS The Group uses some additional terms too, below the related definitions: ▪ Organic variation: variation at constant perimeter and FX ▪ Trade Working Capital: NWC with “Trade Payable” net of CAPEX Trade Payable ▪ Buy-back: purchase of tr
Slide 38: Disclaimer forward looking statements
ANNEX DISCLAIMER – FORWARD LOOKING STATEMENTS This document has been prepared by Interpump Group S.p.A for not constitute an offer to sell or a solicitation to buy or subscribe to use during meetings with investors and financial analysts and is Company shares. Neither this document nor a portion the
Slide 39: Annex 2Q2024
ANNEX 2Q2024 38
Slide 40: Sales details organic evolution
ANNEX SALES DETAILS – ORGANIC EVOLUTION GROUP 2020-2024 ORGANIC GROWTH 50% EVOLUTION by QUARTER 39.4% 40% 2020: -12.6% - 2021: +20.1% - 2022: +13.7% 2023: +6.9% - 2024YTD: -9.3% 30% 17.9% 18.7% 20% 15.7% 14.2% 10% 11.6% 14% 9.1% 12.6% 12.5% 4% 0% -3.4% -10% -1.7% -11.2% -9.2% -9.5% -16.2% -20% -30%
Slide 41: Acquisition details
ANNEX ACQUISITION DETAILS 2024 INTERPUMP GROUP ACQUISITIONS 2023 DATA IMPLIED Consolidated since ACQUIRED COMPANIES Additional Total EV/EBITDA Where Sales EBITDA Margin Information consideration PP CHINA April 2024 9 April YRP FLOW TECNOLOGY € 10m 10% - € 2.9m 2.9x Water Jetting division China ALLTU
Slide 42: Annex 2023
ANNEX ANNEX 2023 41
Slide 43: 2023 sales details breakdown Group
ANNEX 2023 – SALES DETAILS – BREAKDOWN – GROUP (1) GROUP 2023 sales: € 2,240m PACIFIC AREA: 11% OTHERS: 1% EARTH MOVING MACHINE: 8% GENERIC DEALERS: 16% CONSTRUCTION: 8% REST of THE WORLD: 9% CLEANING : 5% AGRICOLTURE : 10% GENERIC CONTRACTORS: 3% EUROPE: 52% OTHER INDUSTRIAL SECTOR: 8% LIFT: 7% STE
Slide 44: 2023 sales details breakdown Hydraulics
ANNEX 2023 – SALES DETAILS – BREAKDOWN – HYDRAULICS (1) HYDRAULICS 2023 sales: € 1,634m OTHERS: 1% PACIFIC AREA: 10% EARTH MOVING MACHINE: 11% GENERIC DEALERS: 18% REST of THE WORLD: 9% CONSTRUCTION: 8% OTHER INDUSTRIAL SECTOR: 9% AGRICOLTURE : 14% F&B: 1% ENERGY&UTILITIES: 1% MINING: 1% SHIPYARD-MA
Slide 45: 2023 sales details breakdown Water Jetting
ANNEX 2023 – SALES DETAILS – BREAKDOWN – WATER JETTING (1) WATER JETTING 2023 sales: € 606m PACIFIC AREA: 13% OTHERS: 1% CONSTRUCTION: 8% GENERIC DEALERS: 11% ADAPTORS INDUSTRIAL VEHICLES: 4% AUTOMOTIVE: 4% REST of THE WORLD: 11% SHIPYARD-MARINE: 3% CLEANING: 17% OIL&GAS: 4% RAILWAY: 1% ENERGY&UTILI
Slide 46: ESG path
ANNEX ESG PATH Please (1) Pleaserefers referstotoGroup Groupweb website sitefor forspecific specificdocumentation documentationononthe thetopic topic(“2023 (“2023ESG ESGActions Overview”, Activities 12 January Overview”, 2024) 12 January 2024) 45
Slide 47: ESG 2023-25 plan: climate change
ANNEX ESG 2023-25 PLAN – LEADING TO 2030-50 TARGETS E ▪ 3 main streams – Climate change – Product life cycle – Water efficiency ▪ Formalisation of Group “E” strategy and policies is the cornerstone ▪ Approximately € 10m of CAPEX and not material impact on Group G&A in the plan horizon – CAPEX: aroun
Slide 48: ESG 2023-25 plan: product life cycle
ANNEX ESG 2023-25 PLAN – LEADING TO 2030-50 TARGETS E ACTION ID DESCRIPTION GRI and SDG KPI TIMING K.P.I. Carbon intensity reduction tCO2eq/€ (1) ▪ Focus on Scope 1 and 2 Base year: 2021 E.2 ▪ Main leverages: photovoltaic plants installation Target: -30% Target year: 2025 and renewable purchase ener
Slide 49: ESG 2023-25 plan: water efficiency
ANNEX ESG 2023-25 PLAN – LEADING TO 2030-50 TARGETS E ACTION ID DESCRIPTION GRI and SDG KPI TIMING WATER EFFICIENCY Water monitoring system ▪ Phase 1: mapping of the installed water Base year: 2022 E.6 monitoring systems across the Group N.A. Target year: 2025 ▪ Phase 2: implementation of a continuo
Slide 50: ESG plan: health & safety
ANNEX ESG 2023-25 PLAN – EXPANDING THE SILENT GROWING FOREST S ▪ 4 main streams – Health & safety – People development – Responsible supply chain – Diversity & inclusion ▪ “Pilot projects” will be crucial to capitalise on already existing best practices at subsidiaries level – Walvoil for “ESG suppl
Slide 51: ESG plan: people development
ANNEX ESG 2023-25 PLAN – EXPANDING THE SILENT GROWING FOREST S ACTION ID DESCRIPTION GRI and SDG KPI TIMING HEALTH & SAFETY K.P.I. % Group turnover ISO 45001 extension Base year: 2021 S.2 ▪ Focus on subsidiaries with manufacturing sites Target year: 2027 Base: 22% Target: 45% K.P.I. Increase of non-
Slide 52: ESG plan: responsible supply chain
ANNEX ESG 2023-25 PLAN – EXPANDING THE SILENT GROWING FOREST S ACTION ID DESCRIPTION GRI and SDG KPI TIMING SUPPLY CHAIN RESPONSIBLE ESG supply chain evaluation model extension ▪ First focus on Italy (100% of manufacturing Base year: 2023 S.6 N.A. subsidiaries) Target year: 2024 ▪ Feasibility study
Slide 53: ESG plan: ESG cornerstone
ANNEX ESG 2023-25 PLAN – BUILDING ESG FOUNDATIONS G ▪ 3 main streams – ESG as governance cornerstone – Spread of ESG principles, actions and results inside and outside the Group – Tax compliance consolidation in line with best practices ▪ “G” actions will follow the natural path of Group governance
Slide 54: ESG principles-actions-results
ANNEX ESG 2023-25 PLAN – BUILDING ESG FOUNDATIONS G ACTION ID DESCRIPTION GRI and SDG KPI TIMING ESG PRINCIPLES-ACTIONS-RESULTS Code of Ethics revision Base year: 2022 G.2 N.A. Target year: ▪ To reflect ESG principles in Code of Ethics 1H2023 SPREAD Succession plan formalization G.3 ▪ Succession pla
Slide 55: ESG principles-actions-results spread
ANNEX ESG 2023-25 PLAN – BUILDING ESG FOUNDATIONS G ACTION ID DESCRIPTION GRI and SDG KPI TIMING ESG PRINCIPLES-ACTIONS- RESULTS SPREAD Base year: 2022 Updating on ESG journey G.6 N.A. Target year: ▪ Periodic updating on actions implementation annual 54
Slide 56: Manager in charge declaration
The Manager in charge of preparing the company’s financial reports declares - pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance - that the accounting information contained in this presentation corresponds to the document results, books and accounting records. S.Ilario d’E