Carel Industries Spa · MIL:CRL
Carel Industries Spa — 9M 2022 Earnings Presentation
41 slides from Carel Industries Spa's earnings presentation, Nov 10, 2022
Slide 1: 2022 – 9M Results
CAREL INDUSTRIES S.p.A. 2022 – 9M Results 10th November 2022 This document and all of its contents are property of CAREL. All unauthorised use, reproduction or distribution of this document or the information contained in it, by anyone other than CAREL, is severely forbidden.
Slide 2: 9M 2022 – Highlights
9M 2022 – Highlights In the first 9M 2022 the company managed to keep an excellent organic revenue growth rate (Q3 2022 is the seventh consecutive quarter in which CAREL reported a double digit organic revenue growth). Adding to this the strong effort in M&A activity (4 deals completed) and a contin
Slide 3: M&A – 2022 – Senva
M&A – 2022 – Senva • Key Data: Enterprise value (100%) = 34-38m€ 2021 Revenues = ~13m USD EBITDA (TTM) = 3.1m USD Employees = ~65 • Industrial fitting: Bolt-on acquisition Strong complementarity with CAREL’s product line-up • Company profile: SENVA is a US company located in Oregon speci
Slide 4: M&A – 2022 – Klingenburg
M&A – 2022 – Klingenburg • Key Data: Enterprise value (100%) = 12m€ 2021 Revenues = ~30m€ EBITDA = 2.4m€ Employees = ~200 • Industrial fitting: Bolt-on acquisition Strong complementarity with Recuperator’s product line-up • Company profile: Klingenburg GmbH and Klingenburg International
Slide 5: 9M 2022 – Results
9M 2022 – Results KPIs 9M 2022 Revenues bridge m€ 9M 2021 9M 2022 Δ% (1) 10.3 401.1 Revenue 310.3 401.1 29.3% 58.9 21.6 Revenue FX Adj. 310.3 390.8 25.9% 310.3 Revenue (no M&A) 310.3 379.6 22.4% (2) EBITDA 66.0 85.9 30.1% (3) EBITDA adj. 68.0 87.7 29.0% EBITDA adj. Revenue 21.9% 21.9% m€ Net Profit
Slide 6: 9M 2022 – Revenue breakdowns
9M 2022 – Revenue breakdowns Breakdown by region Breakdown by sector Other 1% South America 3% North America 12% HVAC 66% EMEA 71% 401.1 401.1 APAC Refrig. M€ 14% M€ 33% m€ m€ m€ m€ Area 9M2021 9M2022 Δ% Δ% fx Sector 9M 2021 9M2022 Δ% Δ% fx EMEA 224.1 283.3 26.4% 26.6% HVAC 200.5 267.0 33.2% 29.6% A
Slide 7: From EBITDA to Net Profit
From EBITDA to Net Profit K€ 9M '21 9M '22 Δ% • Higher D&A mainly due to the purchase EBITDA 66,042 85,918 30.1% price allocation amortisation D&A -15,147 -17,033 EBIT 50,894 68,885 35.3% • Financial charges slightly higher compared to 9M ’21 impacted mainly by the financial Financial (charges)/inco
Slide 8: 9M 2022 – NFP Bridge
9M 2022 – NFP Bridge 14.3 73.6 17.3 (3.5) 57.8 28.0€ 15.4 from 27.6m€ IFRS 16 from 39.9 IFRS 16 30.2 3.8 45.6 (54.3) m€ (17.0) NFP Net Profit D&A Leasing/ NWC CAPEX Dividends M&A Other NFP FY 2021 rent fees 9M 2022 • Robust cash generation was offset by a strategic increase in NWC along with the pay
Slide 9: ESG rating - Update
Bozza per la discussione ESG rating - Update • In October 2022 CAREL was upgraded to “AA” in the MSCI ESG Ratings assessment. • This upgrade is part of a continuous improvement path which brought CAREL from “B” in 2019 to “AA” in 2022. • CAREL is now in the “ESG Leaders” category according to MSCI E
Slide 10: Closing Remarks
Closing Remarks • Solid growth trend across the board and in all the regions confirmed also in Q3 2022 (seventh consecutive quarter reporting a double-digit organic growth). Q3/9M 2022 Some applications continue to stand out such as heat pumps, data centers, Indoor Air Quality in HVAC and Results Fo
Slide 11: Annexes
Annexes
Slide 12: Shareholding structure (>5% voting rights)
Shareholding structure (>5% voting rights) CAREL Industries S.p.A. CAREL Industries S.p.A. Number of shares Voting rights Other Luigi Rossi Luciani Other Shareholders; Luigi Rossi Luciani Shareholders; S.a.p.a; 36.17% S.a.p.a; 45.05% 38.90% 24.23% 7 Industries B.V.; 5.81% 7 Industries B.V.; 4.93% Lu
Slide 13: Income statement and Balance Sheet
Income statement and Balance Sheet Income statement Balance sheet K€ 9M 2022 9M 2021 Delta % K€ 9M 2022 FY 2021 Delta % Revenues 401,076 310,309 29.3% Fixed Capital 248,928 230,338 8.1% Other revenues 3,179 3,409 (6.7%) Working Capital 101,642 55,591 82.8% Operating costs 318,337 247,677 28.5% Emplo
Slide 14: Company Profile
Company Profile
Slide 15: Leading provider of advanced control solutions for HVAC/R
Leading provider of advanced control solutions for HVAC/R Key financials – 2021A • HVAC: Industrial, Residential, Growing key Commercial markets • Refrigeration: Food Retail and Revenue EBITDA EBITDA margin Net income Food Service €420m €85m ~20.3% €49m Leadership in • Control solutions premium +13%
Slide 16: We operate in attractive niches across a wide range of end-markets…
We operate in attractive niches across a wide range of end-markets… HVAC Refrigeration Industrial Residential Commercial Food Retail Food Service Data Centers Residential Shopping Centers Convenience Stores Restaurant Chains Industry and Process Office Space Hypermarkets Refrigerated Merchandisers P
Slide 17: …through a one-stop-shop portfolio of components and platforms
…through a one-stop-shop portfolio of components and platforms Adiabatic humidifiers and Programmable controls HMI and unit terminals Parametric controls Isothermal humidifiers evaporative coolers Electronic controls easily programmable and customizable User interfaces for units and systems Entry le
Slide 18: Long track record of profitable growth
Long track record of profitable growth Revenue (€m) 420 327 332 280 231 255 203 1990s 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A Adj. EBITDA (€m) 85 63 65 55 51 38 43 1990s 2000A 2001A 2002A 2003A 2004A 2005A 20
Slide 19: Well-articulated strategies to continue the growth track record
Well-articulated strategies to continue the growth track record • Consolidation of HVAC market leadership • Growth in Refrigeration driven by technology leadership • Upselling and cross-selling HVAC Refrigeration • Global penetration to consolidate to represent the its market leadership engine of gr
Slide 20: Leading provider of advanced energy efficient control solutions
Leading provider of advanced energy efficient control solutions 1 High-tech leader in attractive niches of the HVAC/R industry 2 Attractive above market growth supported by secular trends Positioning and technological innovation capability hard to 3 replicate Highly efficient global operations servi
Slide 21: High-tech leader in attractive niches of the HVAC/R industry
1 High-tech leader in attractive niches of the HVAC/R industry Focus on attractive niches… …resulting in leadership positioning …CONSOLIDATED …INNOVATION-ORIENTED High value applications IN HVAC PREMIUM NICHES IN REFRIGERATION Deep knowledge of final applications is 33%1 #1 SIGNIFICANT ROOM FOR key
Slide 22: Attractive market growth supported by secular trends
2 Attractive market growth supported by secular trends Secular trends… …supporting attractive market growth Reference HVAC and refrigeration Market GROWING • Improvement in LIVING STANDARDS POPULATION increasing demand for HVAC/R • Focus on WASTE REDUCTION in CHANGE IN food sector CONSUMER • Increas
Slide 23: Growth is driven by market trends and focused strategic actions…
2 Growth is driven by market trends and focused strategic actions… Growth drivers SECULAR TRENDS Market Increasing the market of the applications addressed by CAREL trends NICHES EXPANSION Secular Leverage of deep knowledge of final trends applications to expand to adjacent niches Expansion to Incre
Slide 24: …and favoured by up-selling and cross-selling
2 …and favoured by up-selling and cross-selling FROM PRODUCT PLATFORMS TO INTEGRATED ELECTRONIC SOLUTIONS… PRODUCT PLATFORMS SYSTEMS From a COMBINATION OF PRODUCTS FROM DIFFERENT PLATFORMS To an ECOSYSTEM TO QUICKLY ADOPT NEW TECHNOLOGIES …IN THE HVAC AND REFRIGERATION MARKETS HVAC Refrigeration Exa
Slide 25: Positioning and innovation capability hard to replicate
3 Positioning and innovation capability hard to replicate ~6% OF REVENUE1 ~12% OF TOTAL WORKFORCE Invested annually in R&D dedicated to R&D 5 R&D CENTRES PROPRIETARY SOFTWARE COMBINING 5 DOMAINS Vast library of proprietary software modules UNIQUE 01100 • Hardware & Firmware developed over the past 1
Slide 26: Leadership position in HVAC OEM premium niches…
3 Leadership position in HVAC OEM premium niches… Leadership positioning in premium …with no perfect comparable niches… Chiller European Market Share1 OEM Large 33% proprietary diversified EM / Low cost 26% solutions competitors competitors 14% 8% 6% Vertical niche approach Innovation p
Slide 27: …and leading in innovation in the refrigeration market
3 …and leading in innovation in the refrigeration market Leveraging on HVAC experience… …CAREL is a leader in innovation Large diversified EM / Low cost competitors competitors 2014 HEOS SISTEMA Waterloop system with DC tech for refrigeration Vertical niche approach Innovation pace & 2015
Slide 28: Highly efficient global operations serving locally…
4 Highly efficient global operations serving locally… NORTH AMERICA WESTERN EUROPE NORTH APAC GLOBAL PRODUCTION FOOTPRINT 1 8* Plant Plants 136 989 Employees Employees DIRECT AND HIGHLY SKILLED SALES NETWORK 65 190 Sales force Sales force 1 81 x3 Plant Sales force 1 3 BEST POSITIONED TO CAPTURE R&D
Slide 29: …diversified blue-chip customers
4 …diversified blue-chip customers HVAC REFRIGERATION GLOBAL BLUE-CHIP APAC 15% EMEA >10,000 <4% South America 72% Customers 2% BROAD & HIGHLY from first customer1 DIVERSIFIED In c. 100 <20% North America 11 countries worldwide from top-15 customers2 2020A revenue LONG-TERM ~80% ~70% BUSINESS of Top
Slide 30: Track record of profitable organic growth
5 Track record of profitable organic growth Double-digit growth Strong profitability High conversion to net income Cash generative business Revenue1 (€m) EBITDA1 (€m) Net Income1 (€m) Operating cash2 (€m) 420.4 52.9 85.3 49.1 50.4 45.0 39.8 327.4 331.6 65.2 63.1 35.0 35.1 280.2 31.2 30.7 255.4 50.9
Slide 31: Global expansion, innovation and services
6 A Global expansion, innovation and services Pursuing additional Consolidation of opportunities leadership positions improving services in HVAC offer with IoT and Growth in advanced Refrigeration monitoring solutions Geographical Cross-selling and up- expansion through selling exploiting the introd
Slide 32: Pursuing external growth through disciplined bolt-on M&A
6 Pursuing external growth through disciplined bolt-on C M&A CAREL has performed detailed analyses and scouting of potential targets, thus promoting an opportunistic approach with a focus on 3 MAIN EXPANSION AREAS: A B C COMPLEMENTING GEOGRAPHICAL Potential selected CORE-BUSINESS EXPANSION acquisiti
Slide 33: M&A
M&A
Slide 34: M&A – 2022 – Sauber
M&A – 2022 – Sauber • Key Data: Equity value (70%) = 3.6m€ 2021 Revenues = 7.6m€ EBITDA = 0.8m€ Employees = ~55 • Industrial fitting: Bolt-on acquisition Strong know-how in on-field services and energy savings • Company profile: Sauber is based in Porto Mantovano (Mantua) and is active
Slide 35: M&A – 2022 – Arion
M&A – 2022 – Arion • Key Data: Equity value (30%) = 1.2m€ 2021 Revenues = 2.7m€ 2020 EBITDA = 0.5m€ Employees = 6 • Industrial fitting: Bolt-on acquisition Enabler of digital services Focus on those applications presenting higher growth trends Secure supply-chain in critical • Compan
Slide 36: M&A – 2021 – CFM
M&A – 2021 – CFM • Key Data: Enterprise value (51%) = 23.1m€ 2020 Revenues = 14.5m€ EBITDA = 5.0m€ Employees = ~34 • Industrial fitting: Bolt-on acquisition Footprint expansion outside Western Europe Strong know-how in digital and on- field services • Company profile: a long-standing d
Slide 37: M&A – 2021 – Enginia
M&A – 2021 – Enginia • Key Data: Enterprise value* = 12.4m€ 2020 Revenues = 12.3m€ 2020 EBITDA = 1.5m€ Employees = 46 • Industrial fitting: Bolt-on acquisition Completing CAREL’s product range for AHU Significant synergies with CAREL/Recuperator • Company profile: Enginia has been oper
Slide 38: M&A – 2018 – Recuperator
M&A – 2018 – Recuperator • Key Data: Cash-out for equity = 25.7m€ Company positive net-cash = 6.9m€ 2017 Revenues = 16.4m€ EBITDA = 1.7m€ Employees = ~60 • Industrial fitting: Small-size Company Complementary products Carel’s commercial strength Cross-selling • Financial fitting:
Slide 39: M&A – 2018 – HygroMatik
M&A – 2018 – HygroMatik • Key Data: Cash-out for equity = 56.1m€ Enterprise Value = 59.0m€ 2017 Revenues = 15.0m€ EBITDA = 4.7m€ Employees = ~60 • Industrial fitting: Small-size Company Interesting geographic positioning Strong in after-sale services Cross-selling • Financial fitti
Slide 40: Disclaimer
Disclaimer This document has been prepared by CAREL Industries S.p.A for use during meetings with investors and financial analysts and is solely for information purposes. The information set out here in has not been verified by an independent audit company. Neither the Company nor any of its subsidi
Slide 41: This document and all of its contents are property of CAREL. All unauthorised use,
41 This document and all of its contents are property of CAREL. All unauthorised use, reproduction or distribution of this document or the information contained in it, by anyone other than CAREL, is severely forbidden.