Slide 1: Dometic Q3 2023 Report
DOMETIC Q3 2023 REPORT OCTOBER 26, 2023 1
Slide 2: Juan Vargues, President & CEO
JUAN VARGUES PRESIDENT & CEO
Slide 3: Q3 2023 Highlights
Q3 2023 HIGHLIGHTS IMPROVED EBITA MARGIN AND STRONG CASH FLOW Market development ▪ Macro environment and market conditions remain challenging and uncertain ▪ Retail inventory levels in Service & Aftermarket gradually on the way down ▪ Decline in OEM driven by RV Americas and Marine Performance ▪ -12
Slide 4: Q3 2023 Financial Summary
Q3 2023 FINANCIAL SUMMARY Net sales of SEK 6,830 m, -10% total growth ▪ -12% Organic -10% ▪ +3% FX 7,576 Net Sales ▪ 0% M&A EBITA before I.A.C EBITA before i.a.c. of SEK 973 m, -8% -8% ▪ EBITA margin of 14.3% (14.0%) 6,830 1,057 973 Operating cash flow of SEK 2,125 m (812) Leverage 2.9x (3.0x) EPS o
Slide 5: YTD September 2023 Financial Summary
YTD SEPTEMBER 2023 FINANCIAL SUMMARY Net sales of SEK 22,448 m, -5% total growth ▪ -12% Organic -5% ▪ +7% FX 23,591 Net Sales ▪ 0% M&A EBITA before I.A.C -14% 22,448 EBITA before i.a.c. of SEK 2,997 m, -14% 3,501 ▪ EBITA margin of 13.4% (14.8%) 2,997 Operating cash flow of SEK 4,718 m (1,151) EPS of
Slide 6: Sales Growth Q3 2023
SALES GROWTH Q3 2023 LTM MSEK Q3 2023 30,000 Net Sales SEK 6,830 m 25,000 ▪ Total growth (-10%) ▪ Americas -18% 20,000 ▪ EMEA +1% ▪ APAC -5% 15,000 ▪ Marine -13% ▪ Global -11% 10,000 3% ▪ Organic growth -12% -12% 5,000 ▪ Americas -18% 0% ▪ EMEA -7% 0 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q
Slide 7: Net Sales by Application Area
NET SALES BY APPLICATION AREA ▪ Other Applications ▪ Mainly sanitation and safety products ▪ Driven by RV and CPV ▪ Power & Control ▪ Strong performance in Marine Steering Systems ▪ Structural growth in Mobile Power Solutions ▪ Driven by RV, Marine and Outdoor Standalone ▪ Climate ▪ Ongoing ramp up
Slide 8: Net Sales by Sales Channel
NET SALES BY SALES CHANNEL SEK B 30 25 29% ▪ RV OEM 22% Group sales 30% ▪ 49% in 2017 20 15% 10% 11% 27% 27% 15 11% 35% 11% 30% 32% 36% 6% 10 28% 15% 44% 43% CPVOEM 5 61% 57% 50% 61% 54% Marine OEM 22% RVOEM 0 2017 2018 2019 2020 2021 2022 2023 OEM Q3 LTM 2023 OEM Service & Aftermarket Distribution
Slide 9: Service & Aftermarket Net Sales
SERVICE & AFTERMARKET NET SALES Proforma net sales in constant currency ▪ Retailers are destocking after high consumer demand and large purchases in 2021 and Q1 2022 ▪ Gradual YoY improvement, -5% compared to -10% in Q2 YoY organic growth ▪ Americas back to growth in Q3 10% 5% ▪ Continued gradual re
Slide 10: EBITA and EBITA Margin Before I.A.C
EBITA AND EBITA MARGIN BEFORE I.A.C EBITA before i.a.c run rate 12.0% (14.2%) EBITA- margin MSEK Q3 2023 1.350 18% EBITA before i.a.c margin 14.3% (14.0%) 1.200 16% ▪ Driven by stronger Gross margin 1.050 14% ▪ Negative FX impact 900 12% ▪ Improved EBITA margins in segments EMEA, APAC and Global 750
Slide 11: Americas Q3 2023
AMERICAS Q3 2023 Net sales SEK 1,403 m, -18% ▪ Organic growth -18% ▪ Back to growth in Service & Aftermarket and Distribution ▪ RV industry production in the quarter -20% Net sales and EBITA margin before i.a.c. 2,000 10% EBITA before i.a.c. SEK 40m (100) 8% ▪ EBITA Margin 2.8% (5.8%) 1,500 6% 4% ▪
Slide 12: EMEA Q3 2023
EMEA Q3 2023 Net sales SEK 1,885 m, +1% ▪ Organic growth -7% ▪ Service & Aftermarket and Distribution remain low but retailer stock situation is improving ▪ Solid growth in OEM Net sales and EBITA margin before i.a.c. EBITA before i.a.c. SEK 221 m (162) 2,500 20% ▪ EBITA Margin 11.7% (8.6%) 2,000 15
Slide 13: APAC Q3 2023
APAC Q3 2023 Net sales SEK 536 m, -5% ▪ Organic growth -5% ▪ Decline mainly driven by lower Distribution net sales ▪ Single-digit decline in Service & Aftermarket ▪ Low single-digit growth in OEM Net sales and EBITA margin before i.a.c. 600 30% EBITA before i.a.c. SEK 146 m (151) 500 25% ▪ EBITA Mar
Slide 14: Marine Q3 2023
MARINE Q3 2023 Net sales SEK 1,593 m, -13% ▪ Organic growth -15% ▪ Service & Aftermarket business stable ▪ Lower industry boat production impact OEM net sales ‒ Decline in Power & Control ‒ Growth in Climate supported by larger boats Net sales and EBITA margin before i.a.c. EBITA before i.a.c. SEK 3
Slide 15: Global Q3 2023
GLOBAL Q3 2023 Net sales SEK 1,414 m, -11% ▪ Organic growth -12% ▪ Igloo business declined ‒ Retailers are re-balancing their inventory levels ‒ Q3 2022 a tough comparison ▪ Hospitality and Residential business stable Net sales and EBITA margin before i.a.c. 2,500 20% EBITA before i.a.c. SEK 188 m (
Slide 16: Cost Reductions
COST REDUCTIONS ▪ Two ongoing programs ▪ Initial program announced 2019 ▪ Next phase announced 2022 ▪ Combined annual target saving of SEK 600 m by the end of 2023 ▪ Combined cost estimated to SEK 1.0 billion ▪ Cost in the quarter SEK -25 m. YTD SEK -74 m ▪ Total cost of SEK 892 m since start. 2,000
Slide 17: Sustainability
SUSTAINABILITY ▪ LTIFR1) better than target ▪ Implementation of Health & Safety guidelines continues KPI Focus area Actual Actual 2024 Target last year ▪ Share of female managers improved to 28% LTIFR1) People 1.9 1.7 <2.0 (24%) Share of female managers People 28% 24% 27% ▪ Action plans are generati
Slide 18: The Dometic NRX Refrigerator
THE DOMETIC NRX REFRIGERATOR A NEW STANDARD IN REFRIGERATION ▪ A new product platform of refrigerators serving all verticals ▪ Boats, RVs, CPVs ▪ 25% more energy efficient than available products on the market ▪ Modularized platform ▪ # of SKUs -63% compared to previous products ▪ Reversible door wi
Slide 19: The Dometic Ventilate - ACC3100
THE DOMETIC VENTILATE - ACC3100 SAVES UP TO 20% OF ENERGY IN AN RV ▪ New innovative product for the RV industry ▪ Patented heat recovery system ▪ Up to 87% of the exchanged air’s heat is re-used ▪ Improves air quality – constant supply of fresh air ▪ Sensor control system monitors and improves the a
Slide 20: Stefan Fristedt, CFO
STEFAN FRISTEDT CFO
Slide 21: Q3 EBITA Development
Q3 EBITA DEVELOPMENT ▪ Organic + FX EBITA before i.a.c. SEK m (% of sales) ▪ Gross margin improved to 30.5% (27.2%) ▪ Sales mix ▪ Price Management SEK 1,057 m SEK 973 m 1,200 (14.0%) (14.3%) ▪ Cost reductions ▪ Lower raw material costs 1,000 ▪ Gradually declining negative effect from logistic costs
Slide 22: Q3 Income Statement
Q3 INCOME STATEMENT OTHER ITEMS ▪ Items affecting comparability SEK -33 m (-326) Q3 Q3 Jan-Sep Jan-Sep ▪ Mainly related to the ongoing Global Restructuring SEK m 2023 2022 2023 2022 programs Net sales 6,830 7,576 22,448 23,591 EBITA bef i.a.c. 973 1,057 2,997 3,501 14.3% 14.0% 13.4% 14.8% ▪ Net fina
Slide 23: Cash Flow for the Period
CASH FLOW FOR THE PERIOD Q3 2023 ▪ Operating cash flow SEK 2,125 m (812) Q3 Q3 Jan-Sep Jan-Sep SEK m 2023 2022 2023 2022 ▪ Improvement driven by reduced working capital EBIT 788 575 2,440 2,553 Adjustments for non-cash items 337 744 1,306 1,681 ▪ Acquisitions SEK -107 m (-29) Changes in Working Capi
Slide 24: 2nd Best Operating Cash Flow Quarter Ever
2ND BEST OPERATING CASH FLOW QUARTER EVER YEAR OVER YEAR IMPROVEMENT FIVE QUARTERS IN A ROW SEK m 2,299 2,125 1,417 1,301 1,043 1,117 917 875 738 812 724 546 311 346 294 181 84 -20 -398 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2019 2020 2021 2022 2023
Slide 25: Working Capital
WORKING CAPITAL ▪ Working capital 32% of net sales due to Inventories ▪ Inventory balance SEK 7,8 b (10,1) ▪ Continued sequential decline since Q3 2022 ▪ # of days are decreasing ▪ Continuous actions to optimize Working capital towards target 20% of net sales
Slide 26: Capex and Research & Development
CAPEX AND RESEARCH & DEVELOPMENT (SEKm, % OF NET SALES) CAPEX 250 8 200 6 ▪ Q3 2023 CAPEX: 150 1.8% 100 1.7% 201 1.6% 4 1.6% (1.8%) of net sales 152 135 50 95 111 111 99 115 109 2 0 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2021 2021 2022 2022 2022 2022 2023 2023 2023 R&D 200 6 ▪ Q3 2023 R&D: 2.3% 5 150 1.9% 4
Slide 27: Net Debt to EBITDA Leverage
NET DEBT TO EBITDA LEVERAGE ▪ Net debt leverage ratio declined to 2.88x ▪ Driven by strong operating cash flow ▪ Adequate headroom to covenants 3.3 3.3 3.2 3.2 3.0 3.1 2.8 3.0 2.8 2.7 2.8 2.8 2.9 3.0 3.0 2.9 2.6 2.7 2.4 2.3 2.0 ▪ Committed on achieving our leverage target 1.4 1.5 of around 2.5x ▪ It
Slide 28: Debt Maturity Profile
DEBT MATURITY PROFILE SEK b 0.8 1.0 ▪ Used cash at hand to repay EUR 300 m bond in 2.0 2.9 September 2023 ▪ The EUR bond market remains an important long-term funding source ▪ Average maturity 2.8 years (3.0 years incl 1+1 year 3.6 3.4 3.4 extension option) ▪ Undrawn revolving credit facility of EUR
Slide 29: Q3 2023 Summary
Q3 2023 SUMMARY Business highlights ▪ Improved margin and another strong operating cash flow quarter ▪ Remains difficult to predict how macroeconomic situation will impact the business in the short-term. Our market expectations: ▪ Service & Aftermarket – continued recovery in demand ▪ Distribution –
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Slide 31: Disclaimer
DISCLAIMER SOME STATEMENTS HEREIN ARE FORWARD-LOOKING AND THE ACTUAL OUTCOME COULD BE MATERIALLY DIFFERENT. IN ADDITION TO THE FACTORS EXPLICITLY COMMENTED UPON, THE ACTUAL OUTCOME COULD BE MATERIALLY AFFECTED BY OTHER FACTORS, (A) CHANGES IN ECONOMIC, MARKET AND COMPETITIVE CONDITIONS, (B) SUCCESS
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