Fluidra, S.a. · BME:FDR
Fluidra — Investor Day (May 2021)
55 slides from Fluidra's investor day presentation, May 2021
Slide 1: To Create the Perfect Pool & Wellness Experience, Responsibly
TO CREATE THE PERFECT POOL & WELLNESS EXPERIENCE, RESPONSIBLY Investor Relations Materials May 2021
Slide 2: Disclaimer
DISCLAIMER • This document is for information purposes only and does not constitute an offer to sell, exchange or buy, or an invitation to make offers to buy, securities issued by any of the companies mentioned. This financial information has been prepared by Fluidra, S.A. ("Fluidra", and with all i
Slide 3: Accelerating Growth & Improving Value Creation
ACCELERATING GROWTH & IMPROVING VALUE CREATION 1 Global leader – at scale, in a long-term structural growth industry Track record of delivery, expecting to fulfill 2022 Strategic Plan one year ahead of 2 target Winning regional strategies for growth and profitability IoT increasing barriers to entry
Slide 4: Fluidra Continues to Deliver on Financial Objectives – Ahead of Plan
FLUIDRA CONTINUES TO DELIVER ON FINANCIAL OBJECTIVES – AHEAD OF PLAN Targets set – Strategic Plan 2018-2022 €1.2bn €1.7bn • Executed ahead of plans set with transformational 2018 Zodiac Sales €1.5bn Margin guidance merger 2017 at c. 23% vs 22% target in 2022 €199m €351m EBITDA1 €321m • All 2022 Stra
Slide 5: Global Leader in a Growth Industry
GLOBAL LEADER IN A GROWTH INDUSTRY Structurally attractive industry – long-term growth, accelerated by 1 recent lifestyle changes 2 Global leader – based on unique footprint and offering 3 Growth, improving margin and value creation for shareholders 5
Slide 6: Structurally Attractive Industry
1 STRUCTURALLY ATTRACTIVE INDUSTRY FLUIDRA CAPITAL MARKETS DAY
Slide 7: Long-Term Structural Growth Drivers – Currently Boosted Further
LONG-TERM STRUCTURAL GROWTH DRIVERS – CURRENTLY BOOSTED FURTHER Market Dynamics & Drivers Market Step Change Consumer trends Large installed pool base with accelerating growth Flight to suburbs globally and in the USA to the sunbelt Average selling price continues to grow Increasing tendency towards
Slide 8: Attractive Industry Growth Rate Expected to Increase Further
ATTRACTIVE INDUSTRY GROWTH RATE EXPECTED TO INCREASE FURTHER 1 2 3 New Installed Average 3-7% 8% Build Base Ticket on Weather 4-8% Growth Growth Equipment 2015-2019 2020 Medium term growth assumptions 1 Underpinned by lifestyle / housing megatrends MARKET GROWTH 2 Medium-term installed base growth g
Slide 9: Large Global Market – Highly Fragmented & Led by Fluidra
LARGE GLOBAL MARKET – HIGHLY FRAGMENTED & LED BY FLUIDRA NA & Europe make up for the bulk of the large Global market … ... as well as the dispersed residential segment Split by market 2020 Chemicals Rest of the World Increase from €7.1bn 24% 21% addressable market in 2017: Global Pool 1. Market grow
Slide 10: Growing Residential Installed Base Solidifying Revenue Resilience and Visibility
GROWING RESIDENTIAL INSTALLED BASE SOLIDIFYING REVENUE RESILIENCE AND VISIBILITY Resiliency driven by large installed base Acceleration in the evolution of the pool base Residential inground pools in millions Split by market type 2020 New Build @ 20 '19 Volumes 21% 15 New Build above '19 10 Volumes
Slide 11: Total Addressable Market Well-Diversified by Segment
TOTAL ADDRESSABLE MARKET WELL-DIVERSIFIED BY SEGMENT Maintenance New Build Consumables Re-model & Upgrade €2.9bn €2.8bn €4.2bn €1.6bn c.94% Residential / c.74% Residential / c.89% Residential / c.91% Residential / c.6% Commercial c.26% Commercial c.11% Commercial c.9% Commercial Total global address
Slide 12: Very Attractive – and Improving – Industry Dynamics
VERY ATTRACTIVE – AND IMPROVING – INDUSTRY DYNAMICS 1 Megatrends driving acceleration in medium-term structural growth 2 Unit value expanding materially (and Fluidra’s share of it) 3 Addressable market well-diversified by category Accelerating growth of installed base enhances resilience, visibility
Slide 13: Global Industry Leader
2 GLOBAL INDUSTRY LEADER FLUIDRA CAPITAL MARKETS DAY
Slide 14: Global Industry Leader – Strengthened, and Invested, to Win
GLOBAL INDUSTRY LEADER – STRENGTHENED, AND INVESTED, TO WIN WHY FLUIDRA WINS 2015-19 2020 Medium term growth Assumptions Market growth Broadest geographic footprint – access to all markets for 1 growth & diversification New Build growth Optimal business model and adapted “route to market” - 2 Brande
Slide 15: Significant Scope to Gain Further Market Share
SIGNIFICANT SCOPE TO GAIN FURTHER MARKET SHARE, DRIVEN BY SCALE AND MARKET FRAGMENTATION Fluidra is #1 in countries with 40% of global pool base… Global diversified platform and top 3 in 93% Fluidra generates 4x more revenue outside 1 North America than next player… … and now Fluidra has closed the
Slide 16: Blended Model Adapts & Optimizes Route to Market Across Globe
BLENDED MODEL ADAPTS & OPTIMIZES ROUTE TO MARKET ACROSS GLOBE Fluidra operates across the value chain with Significance of Pool Pro an adapted regional model • Critical route to market > 70% of channel share Fluidra presence • Pool Pro is key decision-maker for product North America: selection and s
Slide 17: Global Industry Leader with Winning Regional Strategies
GLOBAL INDUSTRY LEADER WITH WINNING REGIONAL STRATEGIES Accelerate growth in North America Strong product pipeline Expand into new residential Leverage connected Continue aftermarket Develop commercial pool and new channels categories from CMP pools for cross-selling penetration strategy by growing
Slide 18: Global R&D Leader – Strategic Investments in Innovation at Our Core
GLOBAL R&D LEADER – STRATEGIC INVESTMENTS IN INNOVATION AT OUR CORE Internet of Things (IoT) • R&D capability with >200 engineers and Cleaners >1,400 patents • 3x more patents than the next industry player Hydraulics • Robust product roadmap based on key Heating criteria • Improving quality and user
Slide 19: IoT Starting Momentous Transformation of Customer Demands & Expectations
Fluidra – Global industry leader IOT STARTING MOMENTOUS TRANSFORMATION OF CUSTOMER DEMANDS & EXPECTATIONS FEWER PLAYERS CAN DELIVER - INCREASING BARRIER TO ENTRY / PARTICIPATION Core fundamentals of our IoT strategy IoT benefits the entire pool ecosystem 1 • Ease of use and peace of mind enhances ex
Slide 20: IoT Set to Deliver Meaningful Value for Customers and Investors
IOT SET TO DELIVER MEANINGFUL VALUE FOR CUSTOMERS AND INVESTORS FLUIDRA THE CLEAR LEADER IN CONNECTED EQUIPMENT Connected Non- bundle drives connected ASP of Pool Pad >20% plus additional product sales Connected IoT 2025 Ambition vs. Current Leadership in a growing market FY 2020 2025 Target • Stron
Slide 21: Proven Track Record on Margin Expansion - Set to Continue
PROVEN TRACK RECORD ON MARGIN EXPANSION - SET TO CONTINUE Clear competencies to drive margin Proven Margin Expansion (Adjusted EBITDA % Sales) • Lean and Value Initiatives as a constant process taking cost out of products mainly through: 24% ‒ Product or component redesign ‒ Supplier change or cost
Slide 22: M&A Track Record: Regular, Systematic Process - Creating Value
M&A TRACK RECORD: REGULAR, SYSTEMATIC PROCESS - CREATING VALUE Clear acquisition parameters Disciplined M&A strategy in a largely fragmented market Opportunity for product range & Culturally aligned • Objective to generate additional annual sales growth of customer expansion c. 1-2% per annum • Larg
Slide 23: CMP Acquisition Case Study (Q1 2021) – Meets All Our Criteria
CMP ACQUISITION CASE STUDY (Q1 2021) – MEETS ALL OUR CRITERIA Our Criteria & CMP Opportunity Fast-growing business - attractive adjacent segment (sales by segment) Expands Group North America Footprint: US 1 manufacturer of solutions for recreational water industry • 2016-20 Sales CAGR of Product ra
Slide 24: Strong Culture Reinforced by ESG – Mission, Vision and Values
STRONG CULTURE REINFORCED BY ESG – MISSION, VISION AND VALUES MISSION VISION VALUES TO CREATE THE PERFECT To enhance lives through POOL & WELLNESS innovative and sustainable EXPERIENCE solutions that transform RESPONSIBLY the way people enjoy water for recreation and health 24
Slide 25: ESG Case Study – The Most Efficient Pool System on the Planet
ESG CASE STUDY – THE MOST EFFICIENT POOL SYSTEM ON THE PLANET Automatically optimizes for peak Uses 70% efficiency Variable-Speed less energy iAquaLink Pumps Reduces chlorine use by Uses less than up to 50% Salt + Mineral Sanitization LED Lighting 50W of power Reduces 50% increase in evaporation by
Slide 26: Responsibility Blueprint: Clear Commitments in Each ESG Vertical
RESPONSIBILITY BLUEPRINT: CLEAR COMMITMENTS IN EACH ESG VERTICAL Environment Social Governance Carbon neutral Zero net wage gap Rating Be a carbon neutral company in Equal pay for equal work Reach a score of 80 in 2027 (Scope 1 & 2) and by 2050 between men and women by S&P in 2030 (Scope 3) 2024 − 2
Slide 27: Fluidra Is the Only Global Player with an Integrated Model
FLUIDRA IS THE ONLY GLOBAL PLAYER WITH AN INTEGRATED MODEL 1 Broadest geographic footprint – access all markets for growth & diversification 2 Optimal business model and adapted “route to market” - Branded & Pool-Pro centric 3 Innovation / IoT leader – drives growth and margin Continuous margin expa
Slide 28: Growth, Quality & Value Creation
3 GROWTH, QUALITY & VALUE CREATION FLUIDRA CAPITAL MARKETS DAY
Slide 29: Fluidra's Proposition of Growth & Quality of Returns Is a Rare Combination
FLUIDRA’S PROPOSITION OF GROWTH & QUALITY OF RETURNS IS A RARE COMBINATION - WARRANTS A WIDER PEER SET Very few companies offer similar investment attractions Wider relevant peer set for consideration Global Equity Universe Consistent structural revenue/ Profit growth Strong and improving margins De
Slide 30: Strong Track Record - Growth, Diversification & Resilience
STRONG TRACK RECORD - GROWTH, DIVERSIFICATION & RESILIENCE Growth dynamics Revenues1 CAGR 17-20 Adj. EBITDA2 CAGR 17-20 Cash EPS3 CAGR 17-20 • Strong and consistent top-line growth above market 23% 21% 15% 11% • Resilience founded on megatrends, and 7% 5% growing installed base • Global footprint di
Slide 31: High Quality Cash Returns on Investment – Set to Improve Further
HIGH QUALITY CASH RETURNS ON INVESTMENT – SET TO IMPROVE FURTHER Very strong operating, cash conversion and returns dynamics … • Delivering Growth & Avg. EBITDA1 Mgn. 17-20 Avg. FCF conversion2 17-20 ROCE3 2020 Quality of Returns Significant operating leverage 19% as measured - Fluidra leads a fast-
Slide 32: Disciplined Approach to Capital Allocation, to Optimize Returns
WE TAKE A DISCIPLINED APPROACH TO CAPITAL ALLOCATION, TO OPTIMIZE RETURNS INVESTMENT PRIORITY CONSIDERATIONS Reinvest in the business to • Optimize market entry and expansion drive organic revenue growth • R&D investment at 1.5-2% sales p.a. and margin improvement • Optimize efficiency via digitaliz
Slide 33: Medium-Term Strategic & Financial Objectives Summary
MEDIUM-TERM STRATEGIC & FINANCIAL OBJECTIVES SUMMARY • > Industry, leveraging global footprint Operating and financial performance Growth • Focus on North America expansion Past Step change Future • Drive by innovation, IoT, Commercial Pool Medium 2017-19 20202 2021E Term • Continued execution – Sim
Slide 34: Accelerating Growth & Improving Value Creation
ACCELERATING GROWTH & IMPROVING VALUE CREATION 1 Global leader – at scale, in a long-term structural growth industry Track record of delivery, expecting to fulfill 2022 Strategic Plan one year ahead of 2 target Winning regional strategies for growth and profitability IoT increasing barriers to entry
Slide 35: Appendix
APPENDIX FLUIDRA CAPITAL MARKETS DAY
Slide 36: Ownership Structure and Shareholders' Agreement
OWNERSHIP STRUCTURE AND SHAREHOLDERS’ AGREEMENT Ownership structure Shareholders’ agreement(1) Rhône Capital: Free float • Prohibition to sell to a single acquirer (i) more than 20% or (ii) any 55.1% number of shares if this would legally oblige the acquirer to launch a tender offer - Once funds man
Slide 37: US GAAP to IFRS - Key Financial Differences for Fluidra
US GAAP TO IFRS - KEY FINANCIAL DIFFERENCES FOR FLUIDRA €M 2020 Adjusted EBITDA 320.8 Lease expense (24.7) Lease expenses not included in P&L under IFRS 16 R&D expense (12.5) Capitalized R&D expenses Adjusted EBITDA (US GAAP comparable) 283.6 Depreciation (20.4) Adjusted EBITA (US GAAP comparable) 2
Slide 38: Q1 Results 2021
FLUIDRA BOMB Nese w.yAl May 6% 2021
Slide 39: Key Messages
Key Messages 1. Record Q1 results, driven by exceptionally strong demand in Residential Pool. 2. Strong accretive M&A activity & greater dividend payment announced. 3. Sharp focus on ESG. During our 5th Capital Markets Day we presented our new comprehensive ESG “Responsibility Blueprint” plan for 20
Slide 40: YTD Financial Highlights
YTD Financial Highlights Extraordinary Growth and Operating Leverage Compared to a Positive Q1 2020 Evol. Const. FX & • Superb Sales growth in Q1 on the €M 2020 2021 21/20 Perimeter back of strong continued demand in Residential Pool and some pull Sales 315.8 508.4 61.0% 59.8% forward in preparation
Slide 41: Highlights for the Quarter
Highlights for the Quarter Business Evolution ● Step change continues aided by the flight-to-the-suburbs with the pool as the anchor of backyard experience. This confirms the strong fundamentals of the business and resilience of the industry. Fluidra is very well-positioned to achieve medium term-ta
Slide 42: Sales by Geography
Sales by Geography Record Growth in All Geographies Boosted by Continued Momentum despite Positive Q1 2020 Comparable % % Evol. Const. FX & YTD €M 2020 2021 • Southern Europe, excellent Sales Sales 21/20 Perimeter performance in the quarter driven by France, Italy and Spain. Southern Europe 94 30% 1
Slide 43: Sales by Business Unit
Sales by Business Unit Residential Aftermarket and New-Build Activities Drive Growth % % Evol. YTD €M 2020 2021 • Residential Pool had an Sales Sales 21/20 outstanding growth supported by outdoor living and flight to the Pool & Wellness 306 97% 496 98% 62.3% suburbs. • Commercial Pool new projects R
Slide 44: Q1 2021 Results
Q1 2021 Results Very Strong Growth and Profitability Evol. €M 2020 % Sales 2021 % Sales 21/20 • Exceptional Sales evolution in Q1 led by Sales 315.8 100% 508.4 100% 61.0% Residential Pool. Gross Margin 169.9 53.8% 274.3 53.9% 61.5% • Gross Margin expansion, driven by price Opex before Dep. & Amort.
Slide 45: Net Working Capital
Net Working Capital Outstanding Management of NWC, Improving Ratio to Sales by 600 Bps in Q1 March €M 2020 2021 Evol. 21/20 • Operating Net Working Capital performed very well, improving ratio to LTM Sales by 600 bps. Inventory 309.6 376.6 21.6% • Inventory increased due to the Accounts Receivable 4
Slide 46: Cash Flow and Net Debt YTD
Cash Flow and Net Debt YTD Further Deleverage Despite Strong M&A Activity €M 2020 2021 € Evol. 21/20 Reported EBITDA 47.8 127.8 80.0 Net Interest Expense Paid (10.7) (8.3) 2.5 Corporate Income Tax Paid (0.8) (3.5) (2.7) Operating Working Capital (170.7) (220.2) (49.5) • Excellent Operating Cash Flow
Slide 47: Outlook and 2021 Guidance
Outlook and 2021 Guidance 1. April followed the strong Sales growth trend on an easier comparable. 2. COVID-19 drove unusual quarterly performance in 2020, with lower than usual H1 and a stronger reversal H2. 3. Investments in Opex and Capex to fund long term growth initiatives. Capex to remain in t
Slide 48: Conclusions
Conclusions 1. Outstanding Q1 results. Very strong 2021 Residential Pool season expected in the Northern Hemisphere. 2. Step change continues aided by the flight-to-the-suburbs with the pool as the anchor of backyard experience confirming the strong fundamentals of the business and the resilience of
Slide 49: Appendix
Appendix PIGUlT=1-PeE 2) RESULTS 2021
Slide 50: (I) Sales by Geography
(I) Sales by Geography Constant Const. FX & YTD Evol. 21/20 Const. FX Perimeter Perimeter Southern Europe 63.2% 63.2% 63.2% 63.2% Rest of Europe 67.4% 68.7% 64.7% 66.0% North America 84.7% 101.4% 70.8% 86.2% Rest of the World 12.0% 10.3% 11.1% 9.4% Total 61.0% 65.2% 55.7% 59.8% Q1 RESULTS 2021 May 6
Slide 51: (II) Reported Profit & Loss Account YTD
(II) Reported Profit & Loss Account YTD €M 2020 % Sales 2021 % Sales Evol. 21/20 Sales 315.8 100% 508.4 100% 61.0% Gross Margin 169.8 53.8% 272.4 53.6% 60.4% Opex before Dep. & Amort. 119.8 37.9% 143.6 28.2% 19.9% Provisions for Bad Debt 2.2 0.7% 1.0 0.2% (53.3%) Reported EBITDA 47.8 15.1% 127.8 25.
Slide 52: (III) Reconciliation to Reported EBITDA YTD
(III) Reconciliation to Reported EBITDA YTD €M 2020 2021 Evol. 21/20 EBITDA 51.4 134.8 162.0% Integration Related Non-Recurring Expense (0.9) (3.5) 295.4% Other & FX impact on Non-Recurring Expense (0.1) 0.1 (170.1%) Stock Based Compensation (2.3) (3.6) 54.8% Run Rate Synergies (0.4) (0.1) (84.6%) R
Slide 53: (IV) Reconciliation of Reported to Cash Net Profit and Cash EPS YTD
(IV) Reconciliation of Reported to Cash Net Profit and Cash EPS YTD €M 2020 2021 Evol. 21/20 Reported Net Profit from Continued Operations 1.6 67.3 4,156% Integration Related & Other Non-Recurring Expense 1.0 3.4 245.5% Stock Based Compensation 2.3 3.6 54.8% Run Rate Synergies 0.4 0.1 (84.6%) P&L Fi
Slide 54: (V) Reported Balance Sheet
(V) Reported Balance Sheet Assets 03/2020 03/2021 Liabilities 03/2020 03/2021 PPE & Rights of Use 234.2 254.7 Share Capital 195.6 195.6 Goodwill 1,124.5 1,218.8 Share Premium 1,148.6 1,148.6 Other Intangible Assets 742.0 710.5 Retained Earnings 117.7 303.6 Other Non-Current Assets 106.0 100.8 Interi
Slide 55: Thank You for Your Attention!
THANK YOU FOR YOUR ATTENTION! Luis Boada IR, Corporate Communications & Business Development Director lboada@fluidra.com T: +34 93 724 39 00 | M: +34 600 930 505 | www.fluidra.com/shareholders Bloomberg ticker: FDR:SM Reuters ticker: FLUI.MC