Arbonia Ag · SIX:ARBN

Arbonia — FY2017 Earnings Presentation

59 slides from Arbonia's earnings presentation, Feb 27, 2018

  1. Slide 1: Arbonia – 2017 Results – 27 February 2018

    Arbonia – 2017 Results – 27 February 2018 Alexander von Witzleben, CEO Felix Bodmer, CFO 1

  2. Slide 2: Results 2017 - Continuing Operations

    Results 2017 - Continuing Operations1 Arbonia is delivering across all metrics All figures in CHF M 2017 2016 ∆ Net revenues 1’246 916 +36% EBITDA Excl. one-time effects 101* 62 +63% Incl. one-time effects 120 65 +84% Group result Incl. one-time effects 38 5 - Net debt 43 225 -81% 1. Without Condect

  3. Slide 3: Agenda

    Agenda 1. Highlights 2017 2. Financials 2017 3. Recap transformation 4. Divisional strategies 5. Guidance Questions Arbonia – 2017 Results | 27 February 2018 3

  4. Slide 4: Highlights 2017: Update on key achievements

    Highlights 2017 Update on key achievements 1 Successful  Disposal of 5 non core entities1 and non operational real estate portfolio realignment  Focus on core divisions (HVAC, Sanitary, Windows, Doors)  2 Full integration of  Successful integration of former Looser Group2 Looser and Koralle  Su

  5. Slide 5: Successful portfolio realignment

    1 Successful portfolio realignment Disposal of non core assets Industrial Forster Profile Real estate Coatings Services Systems assets  All coating activities  Industrial Services  Forster Profile Systems  Disposal of non divested in H1 2017 disposed in H2 2017 disposed in H2 2017 operational re

  6. Slide 6: Full integration of Looser and Koralle

    2 Full integration of Looser and Koralle Improved business profile Rational and advantages Resulting market position in 2017 Est. revenues interior doors in Cent. Europe (CHF M)1  Financial and operational integration of Prüm, Garant and Invado completed in 2017  Implementation of first cost (espe

  7. Slide 7: Production footprint optimisation

    3 Production footprint optimisation Relocations completed and new initiative HVAC Sanitary Windows HVAC New    • Relocation of special radiators • Relocation of Koralle’s shower • Relocation of wood and wood/alu • Construction start for new panel production from Arbon (CH) to production from Vlot

  8. Slide 8: Strong operational performance: Divisional overview key metrics

    4 Strong operational performance Divisional overview key metrics All figures in CHF M Revenues & EBITDA Comment 14.0% 7.9%  EBITDA margin above key industry 600 555.0 peers Technology 486.8 Building 400  Steel price increases successfully absorbed through price increases 200 57.9 62.5  Further ma

  9. Slide 9: Agenda

    Agenda 1. Highlights 2017 2. Financials 2017 3. Recap transformation 4. Divisional strategies 5. Guidance Questions Arbonia – 2017 Results | 27 February 2018 9

  10. Slide 10: Income Statement – Continuing operations

    Income Statement Continuing operations In CHF M 2017 in % 2016 in % Net revenues 1′245.6 100.0 916.4 100.0 Cost of material and goods -570.7 -45.8 -397.9 -43.4 Personnel expenses -411.6 -33.0 -324.1 -35.4 Other operating expenses -182.6 -14.7 -134.7 -14.7 EBITDA 120.3 9.7 65.3 7.1 Depreciation, amor

  11. Slide 11: Reconciliation to adjusted numbers

    Reconciliation to adjusted numbers One-time effects 2017 without Actual Building one-time In CHF M 2017 Techn. Windows Doors Others effects Net revenues 1′245.6 1′245.6 EBITDA 120.3 -1.7 -16.4 -0.3 -0.6 101.3 EBIT 61.3 -0.5 0.9 42.6 Group result 37.6 0.6 3.1 0.0 0.2 22.8 Presentation of the respecti

  12. Slide 12: Adjusted Income Statement

    Adjusted Income Statement Continuing operations without one-time effects In CHF M 2017 in % 2016 in % Net revenues 1′245.6 100.0 916.4 100.0 Cost of material and goods -571.1 -45.8 -399.1 -43.6 Personnel expenses -415.0 -33.3 -320.2 -34.9 Other operating expenses -176.3 -14.1 -138.6 -15.1 EBITDA 101

  13. Slide 13: Income Statement – Continuing and discontinued operations

    Income Statement Continuing and discontinued operations 2017 2016 Segment information Segment information 1 Total Without one- Without one- In CHF M time effects Total time effects Net revenues 1′378.5 1′378.5 995.3 995.3 Cost of material and goods -626.8 -627.2 -435.9 -436.9 Personnel expenses -447

  14. Slide 14: Net Revenues by Division / Region

    Net Revenues by Division / Region Regional shifts mainly through acquisitions Net revenues by Division Net revenues by Region 27% (16%) 31% (34%) 28% (34%) 45% (49%) 28% (35%) 41% (32%) Building Technology Doors Switzerland Germany RoW Windows Note: Figures in brackets represent last year’s figures.

  15. Slide 15: Employees by Division / Region

    Employees by Division / Region Average headcount (full-time equivalents) Ø-FTEs by Division Ø-FTEs by Region 5% (6%) 12% (19%) 24% (7%) 39% (45%) 19% (22%) 40% (30%) 24% (23%) 37% (48%) Building Technology Switzerland Germany Windows Poland Czech Republic / Slovakia Doors Others Incl. temporary staf

  16. Slide 16: EBITDA- / EBIT-margins per Division

    EBITDA- / EBIT-margins per Division Division Doors improved due to acquisition 15% 11.0% 11.9% 11.3% 10.7% 10% EBITDA margin, 5.1% 4.4% 5% 3.8% adjusted 2.0% 2.2% 2015 0% 2016 Building Technology Windows Doors 2017 15% 10% 7.3% 8.2% 7.6% EBIT 5% 4.3% margin, 2.4% 2.4% 2015 adjusted 0% 2016 -0.4% -5%

  17. Slide 17: Development of Net Revenues by Divisions

    Development of Net Revenues by Divisions Net revenues continuing Δ Δ Δ operations 2017 2016 Year Organic Price- Volume- in CHF M Total growth1 effect effect Arbonia 1′245.6 916.4 35.9% 2.6% 1.4% 1.2% Building Technology 555.0 486.8 14.0% 4.1%2 2.7% 1.4% Windows 351.0 350.8 0.0% -1.4% -0.5% -0.8% Doo

  18. Slide 18: Balance Sheet

    Balance Sheet Equity ratio above 60% In CHF M 1'600 1'400 Current Current Current 1'200 assets assets liabilities Current 38.4% 32.6% 27.3% liabilities 39.4% 1'000 Non-current liabilities 11.8% Non-current 800 Liabilities 12.9% 600 Non-current Non-current Shareholders' Shareholders' 400 assets asset

  19. Slide 19: Net Debt and Leverage Ratio

    Net Debt and Leverage Ratio Almost debt-free In CHF M Leverage Ratio1 0 0.0x -22 -50 -43 0.5x -100 1.0x -150 1.5x -151 -200 2.0x -222 -225 -250 2.5x Leverage Ratio1 -300 Net Debt 3.0x 2013 2014 2015 2016 2017 1. Leverage ratio = Net debt / EBITDA Arbonia – 2017 Results | 27 February 2018 19

  20. Slide 20: Free Cash Flow

    Free Cash Flow Driven by divestments In CHF M 200 180 160 140 120 100 190 80 60 40 20 16 0 -20 -36 -40 -20 -60 -52 -80 -67 2013 2014 2015 2016 2017 Free cash flow (Cash flow from operating and investing activities) Free cash flow (Cash flow from operating and investing activities, without divestment

  21. Slide 21: Development of Capital Expenditures

    Development of Capital Expenditures On high level as planned In CHF M 200 150 100 50 102 46 57 39 20 0 20131 20141 2015 2016 2017 Acquisition of subsidiaries Property, plant, equipment Intangible assets 1. Continuing Operations Arbonia – 2017 Results | 27 February 2018 21

  22. Slide 22: Operating Net Working Capital

    Operating Net Working Capital Driven by acquisitions In CHF M 200 20% 150 14,0 15% 13,1 12,1 12,4 10,8 100 10% 185 135 138 113 122 50 5% 0 0% 2013 2014 2015 2016 2017 % Net revenues Operating net working capital Note: Operating NWC = Accounts receivable + inventories – accounts payable – advances fr

  23. Slide 23: Lean industrial holding

    Lean industrial holding Less than 1% of revenues Development Measures -24% -35%  Complete shift of all Looser Holding 5 activities to Arbonia Holding by end of April 20 2017 15 14 13  Holding cost synergies will be completely 11 realised in 2018 2014 adj. 2015 adj. 2016 2017 2018P 2.0% 1.6% 1.1%1

  24. Slide 24: Income Statement – continuing operations

    Income Statement – continuing operations Going into 2018 with new structure 2017 In CHF M Arbonia HVAC Sanitary Windows Doors Net revenues 1′245.6 408.3 146.7 351.0 340.0 EBITDA 101.3 45.6 16.9 13.3 36.4 in % 8.1 11.2 11.5 3.8 10.7 EBITA 61.7 31.6 14.6 2.1 26.3 in % 5.0 7.8 10.0 0.6 7.7 42.6 29.5 12

  25. Slide 25: Agenda

    Agenda 1. Highlights 2017 2. Financials 2017 3. Recap transformation 4. Divisional strategies 5. Guidance Questions Arbonia – 2017 Results | 27 February 2018 25

  26. Slide 26: Restructuring and repositioning of Arbonia

    Restructuring and repositioning of Arbonia As shown August 13, 2015 Key strategic measures Objective: Long-term competitiveness in Europe Focus of Arbonia 1 2 3 Building supplier Relocation of Focus on Lean production divisional industrial Europe footprint strategies holding Energy efficiency Str

  27. Slide 27: Relocation of production footprint

    1 Relocation of production footprint Major relocations from Switzerland Former Swiss production locations Relocation objectives HVAC Division Windows Division  Creation of specialized Production  Transfer of special radiator  Transfer of PVC windows Competence Centres (PCC) in Best production to

  28. Slide 28: Divisional strategies

    2 Divisional strategies Return to sustainable EBITDA levels Building Technology Windows Doors In CHF M 70 70 70 62.5 57.9 60 60 60 50.7 50 50 50 44.2 39.4 40 40 40 30 30 30 20 20 13.3 20 10 10 6.6 7.6 10 7.5 0 0 0 2015 2016 2017 2015 2016 2017 2015 2016 2017  Improvement of EBITDA profile  Complet

  29. Slide 29: Lean industrial holding: New organisation

    3 Lean industrial holding New organisation with 4 strong divisions Board of Directors Alexander von Witzleben, President CEO Alexander von Witzleben* CFO Corporate Functions Felix Bodmer* Heating, Ventilation and Air Sanitary Equipment Windows Doors Conditioning (HVAC) Knut Bartsch* Harald Pichler*

  30. Slide 30: Recap transformation

    Recap transformation Overview key metrics 2014 - 2017 Full year Full year Full year Full year In CHF M 20141 2015 2016 2017 Net revenues 1'017.4 941.4 995.3 1'378.5 EBITDA 78.3 26.6 68.7 140.6 Shareholders' 363.0 351.8 728.8 863.1 equity Net debt 222.3 21.7 225.1 43.3 Investments 47.7 21.9 62.1 105.

  31. Slide 31: Agenda

    Agenda 1. Highlights 2017 2. Financials 2017 3. Recap transformation 4. Divisional strategies 5. Guidance Questions Arbonia – 2017 Results | 27 February 2018 31

  32. Slide 32: Arbonia invests in the future

    Arbonia invests in the future Capex projects > EUR 80 M Major current capex projects Doors Division  New New processing processing line: line: HVAC Division   Replacement Replacement ofof current current production production line line  New panel radiators production   Capacity Capacity expan

  33. Slide 33: What's next?

    What’s next ? Divisional strategies Arbonia Objective: Consolidate position as leading European Building Supplier 1 State of the art 2 Strong product 3 Growth and production centres and market platforms innovation Best cost country footprint Product platforms New categories Vertical integration Lead

  34. Slide 34: HVAC Division

    Heating, Ventilation and Air Conditioning (HVAC) Division Arbonia – 2017 Results | 27 February 2018 34

  35. Slide 35: HVAC Division: New Production Centre in Russia

    1 State of the art production centres HVAC Division Set up of new Production Centre in Russia Production competence centres (PCC) at optimal locations1 Technological leadership 1) PCC Plattling (DE) Current Capabilities  > 2 M steel panel radiators per year  Mastery of high product variety and (4)

  36. Slide 36: HVAC Division: Complete portfolio and strong market position

    2 Strong product and market platforms HVAC Division Complete portfolio and strong market position Complete product portfolio for thermal transfer Market position in target markets Radiators Convection Radiation Ventilation A/C #1 #1 #2 Industrial / Fan coils Radiant panel commercial application #1 #

  37. Slide 37: HVAC Division: New products for new channels

    3 Growth & Innovation HVAC Division New products for new channels and markets New products Distribution channels Growth categories 3-Tier 2-Tier 2-Tier Primary 2-Tier 2-Tier 3-Tier  New generation of radiant panels for DACH  Excellence in market coverage with 2-tier  Central residential ventilati

  38. Slide 38: Sanitary Equipment Division

    Sanitary Equipment Division Arbonia – 2017 Results | 27 February 2018 38

  39. Slide 39: Sanitary Equipment: Concentrated footprint

    1 State of the art production centres Sanitary Equipment Division Concentrated footprint for small batch sizes Production competence centres (PCC) at optimal locations Technological leadership Current Capabilities 1) PCC Plattling (DE)  All machinery and equipment capable of  Main production site

  40. Slide 40: Sanitary Equipment: Covering all customer needs

    2 Strong product and market platforms Sanitary Equipment Division Covering all customer needs Shower design – perfected shower enclosures and wet floor systems Market position in target markets #1 #1 #1 Exclusive showering solutions #2 #5 Upper segment Objective: Top 3 position in target markets Go

  41. Slide 41: Sanitary Equipment: Mastering individualisation

    3 Growth & Innovation Sanitary Equipment Division Mastering individualisation Mastering product variants complexity Excellence in production process  Leading specialist for shower enclosures in Europe offering mass More than production as well as unique items, in every category and for every 500 si

  42. Slide 42: Windows Division

    Windows Division Arbonia – 2017 Results | 27 February 2018 42

  43. Slide 43: Windows Division: Strong footprint and vertical integration

    1 State of the art production centres Windows Division Strong footprint and high vertical integration Technological Vertical Production competence centres (PCC) at optimal locations1 leadership integration 1) PCC Pravenec (Slovakia) 2  800’000m2 PVC- & PVC/Alu windows 3  10’000 pieces lift-and-sli

  44. Slide 44: Windows Division: Platform strategy and market position

    2 Strong product and market platforms Windows Division Platform strategy and strong market position Platform strategy Market position in target markets  New divisional 76mm PVC profile platform #1 #11 #1  Superior technical features and high degree PVC of design options window  Insulation glass #

  45. Slide 45: Windows Division: Digitisation

    3 Growth & Innovation Windows Division Digitisation Arbonia Windows Digital Sales Production Logistics Sales Service Support Service & assembly1 mobile  RFID controlled  Geofencing  35% stake / option  Digital sales  Immediate data production application 100%2 assistant transmission  Improveme

  46. Slide 46: Doors Division

    Doors Division Arbonia – 2017 Results | 27 February 2018 46

  47. Slide 47: Doors Division: Strong footprint and vertical integration

    1 State of the art production centres Doors Division Strong footprint and high vertical integration Production competence centres (PCC) in optimal locations Expansion of production capacities 1) PCC Roggwil (CH) 2) PCC Weinsheim (DE)  70k doors per year  850k doors per year Investment drivers  Ve

  48. Slide 48: Doors Division: Platform strategy and market position

    2 Strong product and market platforms Doors Division Platform strategy and strong market position A complementary product portfolio… …combined with strong market positions… Exclusive #1 #2 #31 Comfort Objective: Leading position in all core markets Basic …offers many ways to win in the marketplace P

  49. Slide 49: Doors Division: 3 core initiatives for growth

    3 Growth & Innovation Doors Division 3 core initiatives for growth Specialist trade channel Project business Domestic market presence in Switzerland in Germany position in Poland We’re set to expand the market share in the There is a great potential to expand sales Invado has grown more than 10% p.a

  50. Slide 50: New Arbonia: Developing an integrated Building Supplier

    New Arbonia Developing an integrated Building Supplier “The whole is more than the sum of its parts” Arbonia – 2017 Results | 27 February 2018 50

  51. Slide 51: Agenda

    Agenda 1. Highlights 2017 2. Financials 2017 3. Recap transformation 4. Divisional strategies 5. Guidance Questions Arbonia – 2017 Results | 27 February 2018 51

  52. Slide 52: Construction volume of our 4 key markets

    Construction volume of our 4 key markets Stable to positive outlook for 2018 Change of market volume in real terms (EUR M) Top 4 markets represent ~80% Germany (No. 1) Market growth 2018 vs. 2017 of total sales of Arbonia Group Residential Residential Non- New Renovation Residential Market growth Po

  53. Slide 53: German residential construction market

    German residential construction market Positive long-term outlook for new buildings Building permits vs. housing completions1 Comment In thousand Low realisation quota due to In %  Building permits peak in 2016 due to 400 capacity constraints 110  Residential homes for refugees 99 101 100 98  Str

  54. Slide 54: Outlook for the labour market

    Outlook for the labour market Low unemployment and strong wage growth Countries with main production sites Influence on Arbonia Unemployment 2018 (%) Wage growth 2018 (%)  Unemployment rates at Arbonia production 3.5 2.7 locations Thüringen (Garant), Bayern (Kermi) and Rheinland-Pfalz (Prüm) at his

  55. Slide 55: Raw materials: Sharp rise in prices

    Raw materials Sharp rise in prices Aluminium, Glass, PVC and Steel Index 100 in January 2016 180 160 160 149 140 134 120 117 100 80 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Aluminium Glass PVC Steel Successful implementation of price increases crucia

  56. Slide 56: Guidance of Arbonia Group

    Guidance of Arbonia Group1 Transformation on track, guidance confirmed Guidance 2018 Outlook 2019 Sales Sales + 3% organic growth + 3-5% organic growth EBITDA2 EBITDA2 CHF >110 M CHF >125 M Sustainable positive free cash flow and dividend capacity from 2019 at the latest 1. Assuming a stable to posi

  57. Slide 57: Diverse shareholder structure

    Diverse shareholder structure Strong shareholder base Arbonia shareholder structure as of year-end 2017 Artemis 21% 3% Leo Looser Free Float 76% Free-float market capitalisation: CHF 858 M1 Free Float of 76% after termination of lock-up for Looser & Stocker-Looser family 1. Based on market capitalis

  58. Slide 58: Disclaimer

    Disclaimer Arbonia AG is making great efforts to include accurate and up-to-date information in this document, however we make no representations or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this document and we disclaim any liability whatsoe

  59. Slide 59: Thank you

    Thank you Investor Relations ir@arbonia.com +41 71 447 45 54 +41 79 457 01 38 59

Arbonia — FY2017 Earnings Presentation on 6ix