Carel Industries Spa · MIL:CRL
Carel Industries Spa — FY2021 Earnings Presentation
40 slides from Carel Industries Spa's earnings presentation, Mar 3, 2022
Slide 1: 2021 – FY Results
CAREL INDUSTRIES S.p.A. 2021 – FY Results 3th March 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: FY 2021 - Main events
FY 2021 - Main events New Croatian plant construction kick-off Completion of the acquisition of 51% of the share capital of CFM and 100% of the share capital of Enginia Appointment of CAREL’s new Board of Auditors and Board of Directors. One specific Director, Carlotta Rossi Luciani, was assigned ta
Slide 3: FY 2021 – Financial highlights
FY 2021 – Financial highlights Q4 substantially confirmed the positive trends already reported in the first 9M 2021, resulting into an yearly record growth rate in revenues and an increase in profitability, in spite of the global tensions in the electronic materials supply chain and higher inflation
Slide 4: FY 2021 – Results
FY 2021 – Results KPIs FY 2019-2021 Revenues (excluding Enginia/CFM) m€ FY 2020 FY 2021 Δ% +23.5% Revenue 331.6 420.4 26.8% Revenue FX Adj. 331.6 421.5 27.1% 404.4 Revenue (no M&A) 331.6 404.4 21.9% 327.4 331.6 (2) EBITDA 65.2 85.3 30.8% (3) EBITDA adj. 65.4 88.2 35.0% EBITDA Adj./Revenue 19.7% 21.0
Slide 5: FY 2021 – Revenue breakdowns
FY 2021 – Revenue breakdowns Breakdown by region Breakdown by sector Other 1% South America 2% North America 11% HVAC 65% EMEA 72% 420.4 420.4 APAC Refrig. M€ 15% M€ 34% m€ m€ m€ m€ m€ m€ Area FY 2019 FY2020 FY2021 Δ% Δ% fx Sector FY 2019 FY 2020 FY 2021 Δ% Δ% fx EMEA 226.5 236.3 302.3 28.0% 28.1% H
Slide 6: From EBITDA to Net Profit
From EBITDA to Net Profit K€ FY '20 FY '21 Δ% • Higher D&A mainly due to the change in EBITDA 65,194 85,302 30.8% the scope of consolidation (CFM and Enginia) and higher capex. D&A -18,482 -20,844 EBIT 46,713 64,457 38.0% Financial (charges)/income -1,489 -2,355 • Higher financial charges due to IFR
Slide 7: FY 2021 – NFP Bridge
FY 2021 – NFP Bridge 60% Cash conversion rate -53.8% 35.0 57.8 49.6 27.6€ from 28.2m€ IFRS 16 from 12.0 IFRS 16 22.9 18.7 (7.3) 21.4 15.1 30.2 (49.1) 4.8 (20.8) m€ NFP Net Profit D&A Leasing/ NWC CAPEX Dividends Others Organic NFP M&A NFP FY 2020 rent fees FY 2021 FY 2021 • Excluding the impact of t
Slide 8: Sustainability, Digitalization and Closing Remarks
Sustainability, Digitalization and Closing Remarks
Slide 9: Focus – Sustainability plan
Focus – Sustainability plan ACT FOR THE ACT FOR ACT TO SHARE PLANET PEOPLE THE VALUE 22 GOALS DIVIDED INTO: 22 GOALS DIVIDED INTO: 11 GOALS DIVIDED INTO: PEOPLE SUSTAINABLE STRATEGY AND ENVIRONMENTAL POLICIES GOVERNANCE • Environmental pollution and • Respect for human rights climate change • Divers
Slide 10: Focus - Digitalization
Focus - Digitalization In the last few years CAREL has adopted a Digitalization Roadmap to foster its transition towards a digital Enterprise MAIN INITIATIVES S&OP PLM Services Improving the whole Implementing a Product Adoption of new technologies Sales&Operation planning Lifecycle Management Syste
Slide 11: Closing Remarks
Closing Remarks • 2021 FY results marked a record in CAREL history both in terms of revenues growth and profitability proving one more time the sensibility of CAREL organic development strategy followed over 2021 Results the year. • 2 M&A transaction completed for a cash out of approximately 35 m€ •
Slide 12: Annexes
Annexes
Slide 13: 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 14: Income statement and Balance Sheet
Income statement and Balance Sheet Income statement Balance sheet K€ FY 2021 FY 2020 Delta % K€ FY 2021 FY 2020 Delta % Revenues 420,418 331,610 26.8% Fixed Capital 230,630 176,413 30.7% Other revenues 5,779 3,704 56.0% Working Capital 55,591 41,007 35.6% Operative costs (340,895) (270,120) 26.2% Em
Slide 15: Company Profile
Company Profile
Slide 16: 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 17: 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 18: …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 19: 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 20: 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 21: 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 22: 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 23: 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 24: 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 25: …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 26: 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 27: 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 28: …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 29: Highly efficient global operations serving locally…
4 Highly efficient global operations serving locally… NORTH AMERICA WESTERN EUROPE NORTH APAC GLOBAL PRODUCTION FOOTPRINT 1 6 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 C
Slide 30: …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 31: 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 32: 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 33: 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 34: M&A
M&A
Slide 35: 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 36: 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 37: 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 38: 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 39: 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 40: This document and all of its contents are property of CAREL. All unauthorised use,
40 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.