Slide 1: Your perfect pool experience
Your perfect pool experience Strategic Plan – Investor Relations January 2020
Slide 2: Disclaimer
2 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
Slide 3: The new Fluidra: merger of two successful companies
3 The new Fluidra: merger of two successful companies Overview Highly profitable and cash generating business (In €m) • Global leader in pool equipment and wellness solutions 10% PF SALES CAGR • Innovative, user-focused provider of highly engineered 15% PF EBITDA CAGR products and solutions 1,127 1,
Slide 4: Key investment highlights
4 Key investment highlights 1 Structurally attractive industry that grows ~2x GDP • New pool construction below historical average feeds ever growing installed base • Large installed base drives annuity-like aftermarket • Double engine model: growth & resilience 2 Global leader in the pool and welln
Slide 5: Structurally attractive industry
Structurally attractive industry
Slide 6: Global pool market opportunity of € 7.1 bn
6 Global pool market opportunity of € 7.1 bn North America and Europe represent 79% Fluidra leads market with 18% share and room to grow Rest of World Fluidra Europe South America 18% Other Global 16% Equipment 30% Players 5% 22% Global Pool Global Pool Market Market € 7.1 bn 36% € 7.1 bn Top 10 12%
Slide 7: Highly attractive market with two growth drivers
1,500 Thousands 1,400 7 1,300 Highly attractive market with two growth drivers 1,200 1,100 1,000 900 Life of pool & renewal cycle New 800 build growing but still well below pre-crisis levels (Varies depending on use and construction type) 700 New Pools 600 Thousands 500 1,500 400 Thousands Year 1 1,
Slide 8: Growing & resilient market with strong fundamentals
8 Growing & resilient market with strong fundamentals Growing market Estimated market growth range Market size (€, bn) CAGR: c. 5% Average Ticket ~1.5–2.5% Growth ~ 7% 7.1 Installed Annual 6.2 Pool Base Growth ~1.5–2% = ~ 4 – 6% = Range of Growth Long Term Average New Build ~1–1.5% ~ 3% Growth 2014
Slide 9: Global leader in the pool and wellness industry
Global leader in the pool and wellness industry
Slide 10: Global leadership leveraging a unique and powerful platform
10 Global leadership leveraging a unique and powerful platform Broadest geographic footprint with business model adapted to each market Expansive product offering drives growth and expands addressable market Globally recognized brands allow for market segmentation and channel optimization Core compe
Slide 11: Broadest geographic footprint adapted to local market
11 Broadest geographic footprint adapted to local market • Global market leader with access to all major pool markets • Customer & commercial approach by market • Large growth opportunity in the US, the world’s largest market Sales by geography (PF FY2017A) LatAm 1% Rest of World 20% Europe 49% #1 T
Slide 12: Expansive product offering drives growth
12 Expansive product offering drives growth Pool Ladders and Cleaning Efficient Lighting Pool Cleaners Internet of Things Fire Features Filters Valves Showers Accessories Energy Efficient Energy Efficient Pool Covers Pumps Water Care Efficient Heaters White Goods Disinfection 75.000+ items from entr
Slide 13: Iconic brands provide opportunity to segment offering and gain penetration
10 13 Iconic brands provide opportunity to segment offering and gain penetration • Jandy gained first-mover advantage by taking all equipment off-line in North America – Brand dedicated to professionally installed pool equipment – This move increases pool professionals’ loyalty to our company – Hund
Slide 14: Core competency in product development drives future growth
14 Core competency in product development drives future growth Excellence in innovation Cleaners R&D capability with >200 engineers Pumps & and >1,100 patents Filters Robust product road map Heating New – Improving quality and user experience products Water Care – Technology focused on increasin
Slide 15: Proven track record and best practices to deliver Sales and Operational Excellence
15 Proven track record and best practices to deliver Sales and Operational Excellence Operations Sales • Quality as a differentiator • Strong customer relationships through customer • Improve service level via planning best practices and collaboration and adaptation improved manufacturing footprint
Slide 16: World class team of industry and functional experts
16 World class team of industry and functional experts Over 30 years of experience in global consumer and industrial Over 25 years of experience in the sector products industries Fluidra’s CEO since 2006 and Executive Chairman since 2016 Previously spent over 20 years at Stanley Black & Decker in va
Slide 17: Four strategic objectives that deliver value through 2022
17 Four strategic objectives that deliver value through 2022 Great operating Product category expansion and financial performance Accelerate growth After market penetration in North America New product pipeline and connected pools Sales Growth 5 – 8% EBITDA Margin ~21% Leverage platform in C
Slide 18: Accelerate growth in North America
Accelerate growth in North America
Slide 19: North America: Market & competitors
19 North America: Market & competitors Fluidra has 10% share of €3.5bn Highlights Fluidra 10% • Aging installed base Other Large Equipment 41% North America Players • Higher prices and better technology on pool pads Pool Market 32% € 3.5 bn Others • Traditional fragmented dealer base 17% Large Chemi
Slide 20: North America is a growing and resilient market
20 North America is a growing and resilient market Leading player in key residential pool categories Strong market growth Others Fluidra Chemicals Residential Pool CAGR: c. 5% 21% 37% 20% Pool Where Pool Market 53% we Market € 3.5 bn Compete € 1.8bn Commercial Pool 10% 59% Other Large 2014 2017 Equi
Slide 21: North America: Residential channel structure
21 North America: Residential channel structure Customers / Manufacturers Distribution Prescribers Users Pool builders Maintenance, and servicers Remodelers Homeowner Other distributors Retailers Niche OEMs LC suppliers Parts suppliers Homebuilders Dealer loyalty On time in full delivery Ease of use
Slide 22: Revenue synergies: expand residential pool offering
22 2022 PLAN Revenue synergies North America: expand residential pool offering Expansion opportunities Market and business drivers Residential 37% pool Chemicals 53% N. America pool market Where we compete U.V. Systems Fluid handling € 3.5 bn (20% market share) 10% Commercial pool Identified Revenue
Slide 23: Revenue synergies: North America commercial pool
23 2022 PLAN Revenue synergies North America commercial pool Market overview Competitive landscape Fluidra Larger Waterparks 1% Commercial 33% 8% Other large 19% equipment players Municipal Lodging Commercial Parks 22% pool excl. Commercial pool excl. chemicals Health/ 12% chemicals €0.4bn Luxury Cl
Slide 24: Revenue synergies: North America commercial pool expansion
24 2022 PLAN Revenue synergies North America commercial pool Expansion opportunities Business plan drivers • Launch new commercial offering leveraging Fluidra’s existing factories • Attack the HMAC channel with a dedicated new sales Pumps organization • Target a mix of existing North American custom
Slide 25: North America: Strategies to accelerate growth
25 North America: Strategies to accelerate growth Prescriber loyalty Aftermarket share growth Product expansion and other revenue synergies Connected pools (IoT)
Slide 26: Leverage platform for Europe and Southern Hemisphere
Leverage platform for Europe and Southern Hemisphere
Slide 27: Europe & Southern Hemisphere: Developed market & competition
27 Europe & Southern Hemisphere: Developed market & competition Fluidra has 28% share of €2.9bn market Highlights Fluidra • Mainly residential pools and a huge New Build at 2009 volumes base of professional customers 28% 17% • Commercial market well developed ESA Developed Pool Market by existing cu
Slide 28: Developed markets: Vertically integrated & omni-channel approach
28 Developed markets: Vertically integrated & omni-channel approach Customers / Manufacturers Distribution Prescribers Users Pool builders Own distribution Maintenance, and servicers Homeowner Other Manufacturers Other Remodelers distributors Niche OEMs Retailers Homebuilders Modern channel Capillar
Slide 29: Revenue synergies: Europe and Southern Hemisphere
29 2022 PLAN Revenue synergies Europe and Southern Hemisphere Expansion opportunities Business drivers • Differentiated go-to-market strategies depending on geographies: - Cross-selling products: for overlapping geographies, leveraging existing platforms to Robots Heating Suction cleaners maximize s
Slide 30: Developed markets: Strategies for profitable growth
30 Developed markets: Strategies for profitable growth Gain Capillarity: Cash & Carry expansion Gain penetration: Sales and customer management Improve customer engagement: Brand and channel management Capture revenue and cost synergies
Slide 31: Increase penetration of commercial pools in emerging markets
Increase penetration of commercial pools in emerging markets
Slide 32: Emerging: Market & competition
32 Emerging: Market & competition Fluidra has a 15% share on a €0.7bn Highlights Fluidra • Market based on commercial pools 15% Other Large Equipment • Focus on new construction ESA Emerging 12% Players Pool Market € 0.7 bn • Highly fragmented markets Others 73% • Tourism is the major driver: HMAC C
Slide 33: Emerging markets: Push and pull combined strategy
33 Emerging markets: Push and pull combined strategy Customers Final Engineering Manufacturers Distribution Prescribers customers Prescribers Pool builders Developer Own distribution Maintenance, and servicers Contractor PULL Other Other Remodelers Other Manufacturers distributors Engineering Operat
Slide 34: Emerging markets: Strategies for profitable growth
34 Emerging markets: Strategies for profitable growth Broaden commercial pool product range Expand projects globally
Slide 35: Compelling equity story with strong value creation
Compelling equity story with strong value creation
Slide 36: Compelling equity story with strong value creation
36 Compelling equity story with strong value creation 1 Strong sales growth and a resilient business model 2 Significant cost synergies 3 Compelling margin improvement 4 Strong cash flow generation 5 Solid balance sheet with currency hedge 6 Improving Return On Capital Employed
Slide 37: Ambition of €59m in revenue synergies by 2022
37 2022 PLAN Revenue synergies Ambition of €59m in revenue synergies to be reached by 2022 Initiatives Revenue synergies evolution (€ m) 59 • North America – Expand residential pool offering – Develop a new commercial pool business unit leveraging existing legacy Fluidra factories and knowledge • Eu
Slide 38: Impacts from the merger: revenue dis-synergies
38 2022 PLAN Impacts from the merger: revenue dis-synergies 1 Additional impacts of Aquatron divestiture – Acquirer desire to develop US presence faster than anticipated impacting Aqua Products – Incremental impact on our revenue due to the remedy implementation and the resulting agreement to distri
Slide 39: Summary: revenue synergies and dis-synergies
39 2022 PLAN Summary: revenue synergies and dis-synergies Net revenue €42m synergies opportunity Revenue Revenue Revenue Revenue Revenue Revenue Revenue dis-synergies synergies dis-synergies synergies dis-synergies synergies synergies 2019 2020 2021 2022 Bolt-on acquisitions can provide additional a
Slide 40: Strong sales growth and a resilient business model
40 1 Strong sales growth and a resilient business model Strong growth outlook (excludes revenue synergies)… …that is highly resilient… 5–8% 1–2% 8% New Build sales over all-time low 1–1.5% 26% New Build 1.5 –2.5% sales at all-time low Combined Business is 1.5 –2% 92% Resilient Sales Installed Base G
Slide 41: Value initiatives and lean update
41 2022 PLAN Value initiatives and lean update (€ m) • Value initiatives and lean target revised upwards by €5m to €30m – Active projects for €18m as of 2019 – Ongoing process, provides future opportunities • US tariff is an offset to visualizing 2019 incremental value initiatives and lean impact on
Slide 42: Cost synergies update
42 2022 PLAN Cost synergies update (€ m) • Commercial integration cost synergies provide upside – Updated target by €5m from €12m to €17m. After first year of integration, additional synergies have been identified and executed: • North America: €2m • Europe and SoHem: €2m • HQ: €1m – Executed faster
Slide 43: Significant margin improvement
43 3 Significant margin improvement EBITDA margin evolution Delivers strong net income growth (€mn) 60 bps 21% 140 bps 200 bps 160 17% 400bps of total improvement 2017 PF Cost Synergies Lean & Value Initiatives Operating Leverage 2022E EBITDA evolution (€mn) 351 199 2017 PF 2018E 2019E 2020E 2
Slide 44: Strong cash flow generation to fund value accretive initiatives
44 4 Strong cash flow generation to fund value accretive initiatives … will result in strong deleveraging and Significant free cash flow(1) generation… dividend distribution (€mn) NFD / Adjusted EBITDA 247 152 3.3x 2.8x 2.5x 3.5x 3.2x 2.6x ~2.0x 2017 PF 2018E 2019E 2020E 2021E 2022E 2017PF 2018A 201
Slide 45: Solid balance sheet with currency hedge
45 5 Solid balance sheet with currency hedge Balance sheet Debt Structure Net debt breakdown by currency (€bn) (%) Long dated maturities AUD (~7years) 1.1B 5% Goodwill Equity 1.5B EUR Low costs (200 bps of margin for EUR and USD term loan tranches. 375 bps for AUD term loan tranche) 45% Intangible 0
Slide 46: Improving Return on Capital Employed
46 6 Improving Return on Capital Employed ROCE(1) Return on Sales >18% 14% >20% 2018E 2019E 2020E 2021E 2022E Return on Assets 12% >120% 82% 2018E 2019E 2020E 2021E 2022E 2018E 2019E 2020E 2021E 2022E Significant improvements in ROCE driven by margin improvements and more efficient capital usage Not
Slide 47: Summary
Summary
Slide 48: Solid and balanced plan
48 Solid and balanced plan 1 Structurally attractive industry that grows ~2xGDP 2 Global leader in the Pool & Wellness industry with clear strategic objectives 3 Compelling equity story with strong value creation
Slide 49: Appendix
APPENDIX
Slide 50: Ownership structure and shareholders' agreement
50 2022 PLAN Ownership structure and shareholders’ agreement Ownership structure Shareholders’ agreement Rhône Capital: • Lock-up period until July 2020 • After lock-up period: Founding Families - Prohibition to sell to a single acquirer (i) more than 20% or (ii) Free float any number of shares if t
Slide 51: Analyst consensus
51 2022 PLAN Analyst consensus Information as of: IFRS 16 adjusted 28th January 2020 Analyst consensus FY 2019 FY 2020 Contributors FY 2019 FY 2020 Contributors (in € m) Sales 1,369 1,441 5 1,364 1,437 7 Adjusted EBITDA 247 278 5 266 300 8 Adjusted EBITA 203 219 2 209 243 4 Net Working Capital 340 3
Slide 52: Fluidra Q3 Results 2019
Fluidra Q3 RESULTS 2019 November 11th 2019
Slide 53: Highlights for Q3
Q3 RESULTS 2019 HIGHLIGHTS FOR Q3 November 11th 2019 1. Strong Q3 performance in the Northern Hemisphere. US confirms recovery from poor weather, the change in distribution patterns and gas heater plant start up. 2. Momentum continues with synergies, achieving €26m full year run rate savings. Upgrad
Slide 54: Summary
SUMMARY Q3 RESULTS 2019 November 11th 2019 January-September PF PF IFRS 16 Main figures 2018 2019 PF 2019 Evol. €M €M 19/18 €M • Sales increased by 3.3%, with accelerated performance across the regions despite tough Sales 1,028.9 1,062.7 3.3% 1,062.7 US comparable for 2018. Currency and EBITDA 180.6
Slide 55: 50th Anniversary and IV Investor's Day 2022 Strategic Plan Guidance
50TH ANNIVERSARY AND IV INVESTOR’S Q3 RESULTS 2019 November 11th 2019 DAY 2022 STRATEGIC PLAN GUIDANCE FLUIDRA’S 50th ANNIVERSARY Barcelona’s Pool & Wellness Trade Show gave us the opportunity to celebrate with some of our stakeholders. IV INVESTOR’S DAY Value initiatives and lean target revised
Slide 56: Sales by geography
Q3 RESULTS 2019 SALES BY GEOGRAPHY November 11th 2019 January- PF • Southern Europe grew by 3.2%, accelerating 2019 September 2018 growth in Q3 with a very solid evolution in France. Adjusted for perimeter, growth was Evol. Constant 6.0%. €M % sales €M % sales 19/18 FX Southern Europe 378.5 36.8% 39
Slide 57: Sales by business unit
Q3 RESULTS 2019 SALES BY BUSINESS UNIT November 11th 2019 January- PF 2019 September 2018 Evol. • Residential Pool grew 3.1% with a very good €M % sales €M % sales 19/18 evolution of gas heaters, pumps, lighting Pool & Wellness 987.5 96.0% 1,023.8 96.3% 3.7% equipment and pool covers. Adjusted for c
Slide 58: Pro forma profit & loss
Q3 RESULTS 2019 PRO FORMA PROFIT & LOSS November 11th 2019 January- PF PF IFRS 16 September 2018(2) 2019 PF 2019 Evol. €M % sales €M % sales 19/18 €M Sales 1,028.9 100% 1,062.7 100% 3.3% 1,062.7 • Good Sales evolution benefited from our global Gross Margin 530.0 51.5% 544.2 51.2% 2.7% 544.2 reach. O
Slide 59: Net working capital
RESULTADOS 1S Q3 RESULTS 2019 NET WORKING CAPITAL November 11th 2019 IFRS 16 Net Working Capital September PF 2018 2019 2019 Evol. €M €M 19/18 €M PF 2018 Inventory 263.9 286.4 8.5% 286.4 2019 286.4 303.4 Accounts Receivable 278.7 277.8 (0.3%) 277.8 Accounts Payable 256.2 260.8 1.8% 255.5 Net Working
Slide 60: Net debt and free cash flow
RESULTADOS 1S Q3 RESULTS 2019 NET DEBT AND FREE CASH FLOW November 11th 2019 102.4 Net Debt 107.3 IFRS 16 January-September PF 2018 2019 impact €M €M Evol. 19/18 PF 2018 EBITDA 180.6 190.5 5.4% 666.3 675.3 2019 Increase (-) / Decrease (+) NWC 23.6 19.2 (18.8%) Capex (-) 31.4 31.9 1.6% Free Cash Flow
Slide 61: Conclusions
Q3 RESULTS 2019 CONCLUSIONS November 11th 2019 1. Solid Q3 performance in the Northern Hemisphere. US confirms recovery with solid sell-through in the channel and the elimination of the backlog generated by the gas heater plant. 2. Very good progress with synergies, achieving €26m full year run rate
Slide 62: Thank you!
THANK YOU!
Slide 63: Appendix (I): Reported profit and loss account
APPENDIX (I): REPORTED PROFIT AND Q3 RESULTS 2019 November 11th 2019 LOSS ACCOUNT % of IFRS 16 % of Evol. €M 2018 sales 2019 sales 19/18 Sales 741.5 100% 1,062.7 100.0% 43.3% Fluidra’s reported P&L for 2018 includes January Gross Margin 341.4 46.0% 541.4 50.9% 58.6% to June results of legacy Fluidra
Slide 64: Appendix (II): Reconciliation of pro forma to reported sales
Q3 RESULTS 2019 APPENDIX (II): RECONCILIATION OF PRO November 11th 2019 FORMA TO REPORTED SALES €M 2018 2019 January to June 2018 Zodiac Sales are excluded Pro forma Sales 1,028.9 1,062.7 to reconcile Pro forma to Reported Sales. January to June Zodiac 284.5 - In addition, due to Zodiac’s fiscal yea
Slide 65: Appendix (III): Reconciliation of pro forma to reported EBITDA and net income
APPENDIX (III): RECONCILIATION OF PRO FORMA TO Q3 RESULTS 2019 November 11th 2019 REPORTED EBITDA AND NET INCOME IFRS 16 €M 2018 2019 Adjusted EBITDA 180.6 208.2 Key reconciliation items for 2018 are: January to June Zodiac results 66.0 - IFRS 15 (2.3) - • January to June 2018 Zodiac EBITDA. Transac
Slide 66: Appendix (IV): Reported balance sheet
RESULTADOS 1S APPENDIX (IV): REPORTED BALANCE SHEET Q3 RESULTS 2019 November 11th 2019 IFRS 16 IFRS 16 ASSETS LIABILITIES 09/2018 09/2019 09/2018 09/2019 PPE & rights of use 119.1 219.8 Share capital 195.6 195.6 Goodwill 1,115.0 1,094.2 Share premium 1,148.6 1,148.6 Other intangible assets 778.6 772
Slide 67: Appendix (V): Quarterly details
RESULTADOS 1S Q3 RESULTS 2019 November 11th 2019 APPENDIX (V): QUARTERLY DETAILS IFRS 16 PF 2018 2019 2019 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 €M Sales 316.6 735.6 1,028.9 1,316.2 313.1 753.2 1,062.7 313.1 753.2 1,062.7 Gross Margin 165.8 380.2 530.0 681.0 168.1 389.7 544.2 168.1 389.7 544.2 Opex before D
Slide 68: Contact
CONTACT +34 93 724 39 00 Investor_relations@fluidra.com Avda. Francesc Macià 60, planta 20 - 08208 Sabadell (Barcelona) www.fluidra.com