Carel Industries Spa · MIL:CRL
Carel Industries Spa — 9M 2020 Earnings Presentation
34 slides from Carel Industries Spa's earnings presentation, Nov 6, 2020
Slide 1: 2020 – 9M Results
CAREL INDUSTRIES S.p.A. 2020 – 9M Results 6th November 2020 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 2020 – Highlights
9M 2020 – Highlights The positive trends already reported at the end of Q2 2020 accelerated in Q3 2020, further mitigating the impact on revenues of the temporary lockdowns in several countries and confirming Group’s ability in coping with disrupting scenarios. • Revenues were in line with 9M 2019 (
Slide 3: 9M 2020 – Significant recovery in Q3 2020
9M 2020 – Significant recovery in Q3 2020 KPIs Revenues Bridge (m€) m€ 9M 2019 9M 2020 Δ% +1.4% Revenue 247.7 248.0 +0.1% Revenue FX Adj. 247.7 250.7 +1.2% 247.7 0.3 248.0 2.7 0.5 251.2 EBITDA 49.6 48.5 -2.2% EBITDA/Revenue 20.0% 19.6% Net Profit 28.2 26.2 -7.2% Capex 16.3 7.8 n.r. Revenues Δ Revenu
Slide 4: 9M 2020 – Revenue breakdowns
9M 2020 – Revenue breakdowns Breakdown by region Breakdown by sector Other 1% South America 2% North America 12% HVAC 66% 248.0 EMEA 72% 248.0 APAC Refrig. M€ 14% M€ 33% m€ m€ m€ m€ Area 9M 2019 9M 2020 Δ% Δ% fx Sector 9M 2019 9M 2020 Δ% Δ% fx EMEA 173.6 179.0 3.1% 3.6% HVAC 163.2 162.8 -0.3% 0.5% A
Slide 5: From EBITDA to Net Profit
From EBITDA to Net Profit K€ 9M '19 9M '20 Δ% EBITDA 49,593 48,523 -2.2% • Higher D&A mainly linked to higher Capex in 2019. D&A -12,332 -13,768 EBIT 37,261 34,755 -6.7% Financial (charges)/income -990 -1,095 • Slightly higher financial charges due FX gains/losses -62 125 to increased amount of loan
Slide 6: 9M 2020 – NFP Bridge
9M 2020 – NFP Bridge -20.1% 62.1 12.0 49.6 7.8 1.0 (26.2) 3.2 3.4 (13.8) m€ NFP Net Profit D&A Leasing/ NWC CAPEX Shares Dividends NFP FY 2019 rent fees buy-back 9M 2020 • 20% reduction in NFP compared to 2019 FY level thanks to 40m€ FFO, which easily covered capex, a slight increase in NWC and divi
Slide 7: Closing Remarks
Closing Remarks • The backlog accumulated during the lock-down in February and April was completely cleared in June and July. Operations • No major issue have been reported in relations to the operating capacity of CAREL’s plants; on the contrary in China and Croatia production capacity has been inc
Slide 8: Annexes
Annexes
Slide 9: Shareholding structure (>3% voting rights)
Shareholding structure (>3% voting rights) CAREL Industries S.p.A. CAREL Industries S.p.A. Number of shares Voting rights Luigi Rossi Luciani Other Shareholders S.a.p.a 15,74% 44,07% Other Shareholders 25,83% 7 Industries B.V. Luigi Rossi Luciani 5,69% S.a.p.a 36,17% Capital Research and Management
Slide 10: Income statement and Balance Sheet
Income statement and Balance Sheet Income statement Balance sheet K€ 9M 2019 9M 2020 Delta % K€ FY 2019 9M 2020 Delta % Revenues 247,694 247,955 0.1% Fixed Capital 167,957 162,630 (3.2%) Other revenues 1,963 2,157 9.9% Working Capital 45,232 46,097 1.9% Operative costs (200,064) (201,589) 0.8% Emplo
Slide 11: Company profile
Company profile
Slide 12: Leading provider of advanced control solutions for HVAC/R
Leading provider of advanced control solutions for HVAC/R Key financials – 2019A • HVAC: Industrial, Residential, Growing key Commercial markets • Refrigeration: Food Retail and Revenue Adj. EBITDA EBITDA margin Net income Food Service €327m €64m ~19% €35m Leadership in • Control solutions premium +
Slide 13: 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 14: One-stop-shop portfolio of components and platforms
…through a one-stop-shop portfolio of components and platforms Programmable controls HMI and unit terminals Parametric controls Heat exchangers Isothermal humidifiers Electronic controls easily programmable and User interfaces for units and systems Entry level electronic controllers Heat exchangers
Slide 15: Long track record of profitable organic growth
Long track record of profitable organic growth Revenue (€m) 327 280 231 255 203 1990s 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A Adj. EBITDA (€m) 64 55 51 43 38 1990s 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 20
Slide 16: 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 17: 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 18: 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 19: Attractive market growth supported by secular trends
2 Attractive market growth supported by secular trends Secular trends… …supporting attractive market growth Reference HVAC Market Market value (€m)1 GROWING • Improvement in LIVING STANDARDS POPULATION increasing demand for HVAC/R • Focus on WASTE REDUCTION in CHANGE IN food sector CONSUMER • Increa
Slide 20: 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 21: …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 22: Positioning and innovation capability hard to replicate
3 Positioning and innovation capability hard to replicate ~6% OF REVENUE1 13% OF TOTAL WORKFORCE Invested annually in R&D dedicated to R&D 3 R&D CENTRES PROPRIETARY SOFTWARE COMBINING 5 DOMAINS Vast library of proprietary software modules UNIQUE 01100 • Hardware & Firmware developed over the past 10
Slide 23: 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 24: …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 25: Highly efficient global operations serving locally
4 Highly efficient global operations serving locally… NORTH AMERICA WESTERN EUROPE NORTH APAC GLOBAL PRODUCTION FOOTPRINT 1 5 Plant Plants 123* 926 Employees Employees DIRECT AND HIGHLY SKILLED SALES NETWORK 54* 192 Sales force Sales force 1 80 x3 Plant Sales force 1 3 BEST POSITIONED TO CAPTURE R&D
Slide 26: …diversified blue-chip customers
4 …diversified blue-chip customers HVAC REFRIGERATION GLOBAL BLUE-CHIP APAC 15% EMEA >6,700 c. 5% South America 69% Customers 3% BROAD & HIGHLY from first customer1 DIVERSIFIED In c. 100 c. 20% North America 13% countries worldwide from top-15 customers2 2019A revenue LONG-TERM ~80% ~70% BUSINESS of
Slide 27: Track record of profitable organic growth
5 Track record of profitable organic growth Organic double-digit growth Strong profitability High conversion to net income Cash generative business Revenue1 (€m) EBITDA1 (€m) Net Income1 (€m) Operating cash2 (€m) 327 35.0 63.1 45.0 31.2 30.7 280 39.8 255 50.9 47.0 25.1 231 43.0 27.7 21.4 203 37.5 23
Slide 28: 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 29: 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 30: M&A
M&A
Slide 31: M&A - Recuperator
M&A - 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: ~11x E
Slide 32: M&A - HygroMatik
M&A - 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 fitting: ~
Slide 33: 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 34: This document and all of its contents are property of CAREL. All unauthorised use,
34 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.