Arteche Lantegi Elkartea Sa · BME:ART
Arteche Lantegi Elkartea Sa — H1 2024 Earnings Presentation
38 slides from Arteche Lantegi Elkartea Sa's earnings presentation, Sep 9, 2024
Slide 1: Arteche Corporate Presentation 2024
Arteche Corporate Presentation 2024 0
Slide 2: Disclaimer
Disclaimer The information contained in this presentation of results has been prepared by Arteche Lantegi Elkartea, S.A. (hereinafter the Company or Arteche Group) and includes financial information drawn from the annual accounts of the Company and its Group as of fiscal years 2017 to 2023 audited b
Slide 3: Snapshot of Arteche
Snapshot of Arteche Revenue growth €401m Key financial figures (FY 2023) We are a global designer, +12% CAGR ‘17-’23 manufacturer, integrator and provider of electrical equipment… Focus on renewables >35% Activity of 2023 Rev. … and solutions for the measuring, Attractive operating profitability 10%
Slide 4: Key milestones achieved since our incorporation in 1946
Key milestones achieved since our incorporation in 1946 Through our +75 years of activity we have achieved a unique expertise and positioning within the industry 3
Slide 5: Value-add product portfolio
Value-add product portfolio Measurement & Monitoring Transmission & Distribution Network Reliability Systems Grid Automation 2023 Revenues by business line Network Reliability 11% Solutions that guarantee the Services that strengthen T&D Grid Expertise in products focused digitalization and automati
Slide 6: Arteche's presence across the value chain
Arteche’s presence across the value chain 5
Slide 7: Manufacturing capabilities
Manufacturing capabilities Key figures Production and distribution footprint Headquarters Countries with commercial 175 distribution capabilities Sales footprint Physical presence Factories in Europe, (factories and/or 13 America and Asia… delegations) …including dedicated R&D 7 centres Commercial d
Slide 8: Historical financials: solid business model
Historical financials: solid business model 7
Slide 9: Key investment highlights
Key investment highlights Positive trends within the renewables and transmission & distribution markets are Positive 1 generating new opportunities perspectives Leading independent group backed by key pillars that strengthen our 2 leadership position Differentiated 3 Long-term relationship with sect
Slide 10: Positive trends within renewables and transmission & distribution markets
Positive trends within the renewables and transmission & distribution 1 markets are generating new opportunities 9
Slide 11: Arteche's addressable market and leadership positioning
2 Arteche’s addressable market and leadership positioning Main markets Global market size Leadership position Key players High voltage #2 instrument transformers #2 Measurement & Monitoring > €1.5bn Systems Medium voltage #1 instrument transformers #2 Relays #1 > Electricity sector > Railway sector
Slide 12: Competitive landscape
2 Competitive landscape Arteche’s unique business model has the competitive advantage of being hybrid between Tier I and Tier II players, bringing the flexibility of small players while having international footprint and offering a wide range of product portfolio 11
Slide 13: Customer retention and customer acquisition process
2 Customer retention and customer acquisition process Direct relationship with the end user Indirect relationship with the end user Each company has its own standards and criteria for Technical approval / technical approvals Homologation Framework agreement Specifications and internal analysis Produ
Slide 14: Long-term relationship with sector-leading clients
3 Long-term relationship with sector-leading clients Utilities >1,500 globally(1) 1 2023 Revenues by 2023 Revenues client type concentration Others, 10% Client A, 14% Client B, 4% OEM Diversified Utilities Client C, 3% 15% customer base 30% Client D, 2% Client E, 2% Distributors Others 25% EPC 76% T
Slide 15: Industry reference company backed by our outstanding innovation capacity
Industry reference company backed by our outstanding innovation 4 capacity Annual investment in R&D(1) (€m) R&D team with 200 people 12.1 9.7 10.0 11.0 Dedicated 8.8 9.2 9.3 5.1 5.6 team sourced +199,000 hours in 2023 in R&D 5.7 4.4 4.5 4.7 4.9 with recurrent 4.7 4.6 5.1 5.9 6.5 4.0 4.4 investment c
Slide 16: Scalable business with a clear strategic roadmap 2024-26
5 Scalable business with a clear strategic roadmap 2024 - 2026 Inorganic Strategy New solutions Geographic expansion Such as, Digitalization, Bet on renewables and Expand into the USA and Asia; and ESG and Energy storage solutions consolidate presence in Europe New businesses Solid New business segm
Slide 17: Strategic plan 2024-2026: committed to ambitious targets
5 Strategic plan 2024 – 2026: committed to ambitious targets Accelerating profitability and cash generation 16
Slide 18: Best-practices in Corporate Governance
6 Best-practices in Corporate Governance Current shareholding structure The Board of Directors Free-float Mr. Alexander Artetxe 15.4% Chairman & CEO Onchena S.L. 5.6% Mr. Lander Mr. José María Arteche Abril Arteche family Executive Other external 52.4% Basque Private Equity Fund (rep. Ziskua Ber S.L
Slide 19: Environmental and Social responsibility plans at the centre of core activities
Environmental and Social responsibility plans always at the centre of 7 Arteche’s core activities Sustainability Strategic Goals 2030 10 strategic objectives 1 Net-zero carbon Products designed with ecological insulation. 5 strategic lines 100% use of Renewable Digitalization of all processes. 2 Ele
Slide 20: Closing remarks
Closing remarks Arteche presents strong investment fundamentals 1 2 3 4 5 Industry leader Unique Top positioned on serving niche Smart innovation Strong growth investment structurally products to a wide capabilities and perspective opportunity with growing markets client base in a top notch support
Slide 21: H1 2024 Earnings Release
H1 2024 Earnings Release September 9, 2024
Slide 22: Disclaimer
The information contained in this presentation of results has been prepared by Arteche Lantegi Elkartea, S.A. (hereinafter the Company or Arteche Group) and includes financial information drawn from the the first half consolidated accounts of the Company and its Group as of June 30, 2024, reviewed b
Slide 23: H1 2024 Key highlights
H1 2024 Key highlights Orders intake grew in the first half by +15.0% to €284.5 million, well above market growth. Revenue increased by +19.6% to €224.9m and grew by double digit both in Q1 and Q2. Direct margin improved +300 bps versus a year ago to reach 35.0% in H1 24 vs 32.0% in H1 23 EBITDA rea
Slide 24: H1 2024 Financial highlights
H1 2024 Financial highlights Order Direct NFD / Revenue EBITDA Net profit intake Margin(1) EBITDA €284.5M €224.9M €82.4M €24.6M €7.4M 0.8x +15.0% +19.6% +24.5% +41.4% +73.0% vs 1.0x at 31 y/y y/y y/y y/y y/y December (+23.7% in (+27.8% in (+48.2% in 2023 constant constant constant currency) currency
Slide 25: Revenue grew at double-digit rate in H1 2024
Revenue grew at double-digit rate in H1 2024 Order intake (€M,%) Revenue by geographical region(1) (€M,%) +15.0% +19.6% 284.5 224.9 247.3 +35.0% 12% APAC 188.0 +82.4% 14% 10% 7% 9% 16% 14% -44.1% 15% +26.3% LATAM 35% 31% 35% 35% +14.7% +7.7% NAM 46% 41% 39% 40% +31.1% EMEA +13.3% H1 2023 H1 2024 H1
Slide 26: Positive contribution from all businesses
Positive contribution from all businesses Revenue by business line (€M,%) Measurement and Monitoring Systems Progressing towards #1 in HV while staying in Top 10 in MV +19.6% 224.9 • New products: Capacitive voltage ITs, Sustainable insulated auxiliary services ITs (with no SF6, clean air instead) a
Slide 27: Progressive direct margin improvement
Progressive direct margin improvement Direct margin(1) evolution by half (% of income at selling price(2)) +300 bps vs H1 23 35.0% 32.0% 32.1% 30.5% 28.5% H122 H222 H123 H223 H124 (1) Direct margin = Income at selling price – procurement – direct labor – direct operating expenses. (2) Income at sell
Slide 28: EBITDA H1 2024
EBITDA H1 2024 Record growth of +40% in the first half EBITDA evolution by half (€ million,% of revenue) ▪ EBITDA increased in the first half as a result of 11.0 record sales volume, updated sales prices 10.9 % % and operational productivity improvements. 9.0% 9.3% 8.4% 23,3 24,6 ▪ The company's str
Slide 29: Net profit H1 2024
Net profit H1 2024 Record growth of +73% in the first six months Net profit (€M) and EPS (€/share) 0,13 +73.0% 8,00 0,14 7,00 0,12 6,00 0,10 5,00 0,08 0,08 4,00 0,05 7,4 0,06 3,00 0,04 2,00 4,3 3,0 0,02 1,00 0,00 0,00 H1 22 H1 23 H1 24 Shareholder remuneration: During the first half, the company dis
Slide 30: Net financial debt at June 30, 2024
Net financial debt at June 30, 2024 Leverage ratio improvement in the first six months Net financial debt (NFD) / EBITDA H1 2024 Gross financial debt breakdown evolution (€ million, times EBITDA) by source (%) Avg. maturity: 3.8 years Avg. cost: 4.2% 1.0x 11% Bank +6.0 0.8x debt 14% 36% +3.0 +4.1 €1
Slide 31: Our ESG Commitment
Our ESG Commitment Moving forward with our 2030 ESG strategy Target Indicator FY23 H124 2030 Total D+ND waste Reused or recycled waste (reused + recycled)/ Total D+ND waste 58% 67% 100% generated (%) 39% 42% >50% Net Zero Environment Reduce carbon footprint Scope 1+2 emission reduction vs2021 Carbon
Slide 32: Outlook for FY 2024
Outlook for FY 2024 Outlook FY2023 LTM FY2024 Revenue (€ million) 401.3 440.0 – 460.0 438.1 EBITDA (€ million) 40.7 45.8 – 50.6 47.9 EBITDA Margin 10.1% 10.4% - 11.0% 10.9% (% over revenue) 12
Slide 33: Conclusions
Conclusions Sound growth Strength in Transforming Continuous Generating in orders revenue our portfolio improvement of positive free (+15.0% y/y) and together with a through new our ESG cash flow to revenue (+19.6% tight cost products and performance reinforce our y/y) in a context management market
Slide 34: Q&A - Investor Relations Office
ARTECHE LANTEGI ELKARTEA, S.A. Investor Relations Office Tel: +34 620 328 643 investors@arteche.com Q&A www.arteche.com
Slide 35: Annex
Annex
Slide 36: Annex | Alternative Performance Measures (APM)
Annex | Alternative Performance Measures (APM) APM Unit Definition 30 June 2024 FY 2023 30 June 2023 Income at €m Revenue +/- Change in stocks at sale price €235.2m = 224.9 + 10.3 €416.6m = 401.2 + 15.4 €206.8m = 188.0 + 18.8 selling price Supplies (without depreciations or extraordinary costs) + di
Slide 37: Annex | Key Financial Figures
Annex | Key Financial Figures Key Financial Figures €m 30.06.2024 30.06.2023 % change Revenue 224.9 188.0 +19.6% Direct margin 82.4 66.1 +24.5% Direct margin (% over income*) 35.0% 32.0% +300bps EBITDA 24.6 17.4 +41.4% EBITDA margin (% over revenue) 11.0% 9.3% +170bps EBIT 17.6 9.3 +90.1% EBIT margi
Slide 38: Annex | Consolidated Balance Sheet
Annex | Consolidated Balance Sheet Consolidated Balance Sheet €m 30.06.2024 31.12.2023 Non-current Assets 105.6 105.5 Current Assets 225.9 226.8 Inventories 83.4 88.0 Trade and other receivables 74.6 77.3 Short-term financial investments 3.6 3.0 Cash and cash equivalents 63.4 57.9 Others 0.9 0.6 TOT
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