Arbonia Ag · SIX:ARBN
Arbonia — FY2023 Earnings Presentation
41 slides from Arbonia's earnings presentation, Feb 27, 2024
Slide 1: Annual results 2023
Annual results 2023 Alexander von Witzleben (Executive Chairman), Daniel Wüest (Group CFO), Claudius Moor (CEO Doors)
Slide 2: Status of potential sale of Climate Division
Status of potential sale of Climate Division Negotiations with several potential strategic buyers Arbonia has received several unsolicited expressions of Closing of the potential transaction in all likelihood will take interest in purchasing the Climate Division place in H2 2024, subject to approval
Slide 3: Overview FY 2023
Overview FY 2023 Including discontinued operations (Climate) Key metrics (CHF M) Cash Flow from operating Net revenues EBITDA1 activities EBITDA margin -8.8% 11.3% 9.4% 8.2% -10.1% 1′186 1′202 -34.0% +127 M 1′081 -21.1% 93 101 134 112 89 2021 2022 2023 2021 2022 2023 -26 2021 2022 2023 Net revenue
Slide 4: 2023 in context
2023 in context Continued slow-down in (German) construction industry due to high construction costs as a consequence of elevated, but slowly decreasing material prices unattractive returns in new real estate, as a result of moderate rents, high inflation and subsequently rising interest rates;
Slide 5: Agenda
Agenda 1. Doors strategy and outlook 2. Climate Division 3. Group results Q&A Annual results 2023 | February 2024 5
Slide 6: Arbonia Doors Strategic Pillars
Arbonia Doors Strategic Pillars Market leadership in Central Europe by integrated premium door brands protected by high barriers to entry 1 Long-term positive market prospects for housing construction driven by housing supply-demand 2 imbalance and growing number of buildings for renovation, driven
Slide 7: Forming the European Leader for Doors
Forming the European Leader for Doors Development of Arbonia Doors Acquisition Integration of Capacity Beginning Integration of SAP Go Live Interwand Mile- of Looser Prüm, Garant expansion of ERP Glass Solutions Invado; Joro acquisition (Closing and Invado started to harmonisation incl. acquisition
Slide 8: Market leadership in Central Europe with interior wooden doors
Market leadership in Central Europe with interior wooden doors Business Unit Wood Solutions: Overview Production footprint2 Geographical focus Core markets Export markets Weinsheim (DE), 760 FTE No. Market position 1 1.3 M doors/year Production site No. 2 No.4 Ichtershausen (DE), 520 FTE 1.0
Slide 9: Market leadership in Central Europe with glass solutions
Market leadership in Central Europe with glass solutions Business Unit Glass Solutions: Overview Production footprint Geographical focus Core markets Export markets Plattling (DE), 610 FTE No. Market position 1 25'000m2 production plant Local sales companies in PL, CZ Production site Local sal
Slide 10: Market leadership in Central Europe
Market leadership in Central Europe Premium door brands protected by high barriers to entry Clear market leadership across products Integrated products and service solutions Protected by high structural underpinned by long established companies address customer challenges barriers to entry >300 year
Slide 11: Long-term positive market prospects
Long-term positive market prospects Germany: Market outlook New Construction New living trends residential buildings units German population grew 1.1 M in 2023 and is Number of completed Recent changes in living habits drive the expected to continue growing reshaping of existing home spaces Resident
Slide 12: Mid-term market prospects
Mid-term market prospects Short-term building completions in Germany hit by negative ROE on real estate investments Building completions in Germany ROE on real estate investments Number of flats (in thousands) +0.7% ROE 10% Forecast -20% 306 5% 295 293 293 287 285 0% 235 2323 24 25 26 27 -5% 2017 20
Slide 13: Platform for growth: Selected opportunities
Platform for growth Selected opportunities Selected growth opportunities in core markets Germany: Growing market segments Switzerland: Increase market shares in W-CH German speaking2 French speaking Wholesale Project business DIY <5% <10% <10% ~20% >25% Set-up of a new sales office in Western Swit
Slide 14: Platform for growth: Focus on export and inorganic growth
Platform for growth Focus on export and inorganic growth Arbonia Doors core markets Focus markets for export Focus on inorganic growth and inorganic growth Active market consolidation in core markets Expansion to adjacent markets to achieve European-wide presence Continued vertical integration
Slide 15: Cost leader and digital outrider
Cost leader and digital outrider Selected initiatives Selected initiatives Best in class production sites Platform for digital sales processes Production footprint with few, From competition of products to highly-automated, large sites competition of processes with clear cost advantage - Web-based s
Slide 16: Stand-alone organisation
Stand-alone organisation Lean holding with an experienced management team Board of Directors Board of Directors 5 members (Chairman Group Management Alexander von Witzleben) Extended Group Management CEO Claudius Moor HR Chief of Staff Communication & IR Business Development CFO BU Wood Solutions BU
Slide 17: ESG reporting Highlights 2023
ESG reporting Highlights 2023 Product innovation CO2 and Energy Share of net revenues from third parties with new products1 Greenhouse gas emissions (Scope 1 + 2) in tCO2e +12% Expenditure on research & -9% Own electricity production 19% development as a share of 28′290 increased to 15% in 2023;
Slide 18: Financial mid-term targets
Forming a Tier 1 building component supplier Financial mid-term targets1 – taking CHF ~200 M firepower into account ► Net revenue ambition 20281,2 CHF 900 M ► EBITDA Margin 20281: 15% Leading ► Best in class production sites by completed investment program Door Supplier in Europe ► Strong Free Cash
Slide 19: Agenda
Agenda 1. Doors strategy and outlook 2. Climate Division 3. Group results Q&A Annual results 2023 | February 2024 19
Slide 20: Overview 2023: ARBONIA climate at a glance
Overview 2023 ARBONIA climate at a glance Net revenue 2023 EBITDA 20231 FTEs 2023 CHF 577 M CHF 55 M (9.5%) 3'054 Europe Radiators Europe2 Fan Coils Europe3 Broadest system supplier TOP 2 ~ 15-20% market share/TOP 1 NR by product 2023 Production footprint Battery Heat pump Radiators Underfloor Net r
Slide 21: Overview 2023: Effects on key product groups
Overview 2023 Effects on key product groups Extraordinary sales performance in an extremely competitive environment Heat pumps Radiators Extremely differing heat pump business in 2023: Announcement to improve utilisation and from H1 with sold out production to H2 with a productivity, production
Slide 22: Agenda
Agenda 1. Doors strategy and outlook 2. Climate Division 3. Group results Q&A Annual results 2023 | February 2024 22
Slide 23: Income Statement
Income Statement As reported, continuing operations (excl. Climate) In CHF M 2023 in % 2022 in % Net Revenues 504.6 I 100.0 555.9 100.0 Revenues I Net revenues down -9.2% in CHF due to lower volumes and strong Cost of material and goods -199.7 II -39.6 -239.1 -43.0 CHF. Adjusted for FX and acquisi
Slide 24: Income Statement 2023 Segment Reporting
Income Statement 2023 Segment Reporting (as reported) Total Corporate Climate in 1 000 CHF Climate Doors reportable segments Services Decline of revenues by - 10.8% due to lower volumes in radiators and FX Negative one-time effects of CHF 12.0 M on EBITDA level mainly for Sales with third partie
Slide 25: Consolidated Balance sheet, Assets
Consolidated Balance sheet, Assets Arbonia Group including discontinued operations in 1'000 CHF 31.12.2023 31.12.2022 Assets in % in % Assets held for sale I Cash and cash equivalents 17’160 29’196 Presentation of all assets of Climate Division as "assets held for sale" in current assets of the ba
Slide 26: Consolidated Balance sheet, Liabilities
Consolidated Balance sheet, Liabilities Arbonia Group including discontinued operations in 1'000 CHF 31.12.2023 31.12.2022 Liabilities in % in % Financial debt I Liabilities 65’546 134’462 Modest increase of financial debt consisting of • CHF 134 M revolving credit facility Financial debt 136’340
Slide 27: 2023 summary overview
2023 summary overview Performance by Group and Divisions, including discontinued operations CHF M1,2 -8.9% -10.1% -8.6% -9.1% 1’186 1’202 1’081 -10.8% -9.3% Net Revenues 631 646 577 552 553 502 12 2021 12 2022 12 2023 12 2021 12 2022 12 2023 12 2021 12 2022 12 2023 -33.9% -21.1% -22.4% -45.8% 134.3
Slide 28: EBITDA Bridge 2022 – 2023
EBITDA Bridge 2022 – 2023 Arbonia Group1 in CHF M, including discontinued operations -21.1% 112.4 -23.7 Mio. 88.7 EBITDA SPI SVI MCC SI PI ECC Residual FX-Effect Corporate EBITDA 2022 Services 2023 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) Explanations: 1) Actual December 2022 7) ECC - Energy-Cost-Change 2
Slide 29: Overview organic revenue growth FY 2021-2023
Overview organic revenue1 growth FY 2021-2023 In CHF M -2.1% -9.0% Decline in organic growth by 9.0% on Group level Arbonia due to mid-double-digit negative volume effects Group and mid-single digit positive price effects -8.1% -10.1% 2021 2022 2023 H1 2023 H2 2023 -1.9% Climate with 9.8% negati
Slide 30: Net debt as of 31 December 2023
Net debt as of 31 December 2023 In CHF M1, including discontinued operations (Climate) 250 241 12.6x 25 11.7x 209 10.8x Net debt 200 24 9.9x YoY increase of CHF 25 M mainly due to dividend (CHF 20 M), purchase 184 9.0x of treasury shares (CHF 3 M) and increase of lease liabilities (CHF 2 M) 22 8.1
Slide 31: Net debt development 2023
Net debt development 2023 In CHF M, including discontinued operations Net Debt (12 2022) 184 Capex 93 Acquisitions 4 Increase in share (KIWI) 2 Dividend 20 Purchase treasury shares 3 New lease liabilities 13 CF from operating activities 101 FX-Impact 10 Net Debt (12 2023) 209 Annual results 2023 | F
Slide 32: Cash flow statement
Cash flow statement In CHF M, including discontinued operations (Climate) Cash flow from operating activities Cash flow from operating activities increases by CHF 127 M to CHF 101 M 150 due to operational performance and NWC reduction by CHF 34 M … +126.8 M 100 …despite substantial higher intere
Slide 33: Net Working Capital
Net Working Capital Significant Operating Net Working Capital reduction supported cash flow development Operating NWC development 300 45% 40% Substantial reduction of operating NWC yoy as well as 2nd half of the 250 year (CHF 48 M respectively CHF 82 M) 35% NWC ratio improved from 20.5% to c. 18
Slide 34: Mid-term market prospects
Mid-term market prospects Building completions in Germany (number of flats)1 Foundation for growth in thousands Supply/demand imbalance due to migration, urbanisation, rising demand for space (per person), more single-households etc. 800 Structural high demand for (energy-efficient) homes, both
Slide 35: Guidance for 2024
Guidance for 20241 Climate Doors Revenues EBITDA We expect: ► despite improvement of external factors (inflation, interest rates, construction costs and increasing rents) no improvement in new construction, but possibly an improvement in renovation in the course of the year ► organic growth in the C
Slide 36: Thank you
ARBONIA @ Thank you
Slide 37: Appendix
ARBONIA @ Appendix
Slide 38: Income Statement
Income Statement Without one-time effects, including discontinued operations Revenues I Net revenues down -10.1% in CHF due to lower volumes and In CHF M 2023 in % 2022 in % strong CHF. Adjusted for FX and acquisitions down -9.0% Cost base II Net Revenues 1’081.2 I 100.0 1’202.1 100.0 Lower mate
Slide 39: Net revenues by Division and Region
Net revenues by Division and Region Only marginal changes in revenue split by Division and Region Net revenues by Division Net revenues by Region 6% 6% (7%) (8%) 13% (12%) 47% 46% 54% (49%) (46%) (54%) 13% (10%) Climate Germany Doors 15% Switzerland (14%) Southern Europe1 RoW Eastern Europe2 Benelux
Slide 40: Accomplishments 2023
Sustainability Highlights of our commitments and activities Commitments Accomplishments 2023 Significantly improved awareness and transparency with an enhanced and comprehensive 2023 ESG report Expanded reporting of Scope 3 categories Increased supplier assessment (partnership with EcoVadis) b
Slide 41: Thank you
ARBONIA @ Thank you