Dometic Group Ab · OMXSTO:DOM
Dometic Group Ab — Q2 2019 Earnings Presentation
44 slides from Dometic Group Ab's earnings presentation, Jul 17, 2019
Slide 1: Interim Presentation Q2 2019
INTERIM PRESENTATION Q2 2019 17 July 2019
Slide 2: Juan Vargues, President & CEO
JUAN VARGUES, PRESIDENT & CEO
Slide 3: Q2 2019 Highlights
Q2 2019 HIGHLIGHTS Growth ▪ 1% total growth in a challenging environment ▪ 12% total Aftermarket growth ▪ -13% total RV OEM growth ▪ Good organic growth in EMEA and Asia ▪ Strong Kampa performance Market development ▪ Strong development for new growth initiatives ▪ Continued stable market in EMEA ▪
Slide 4: Q2 2019 Financial Summary
Q2 2019 FINANCIAL SUMMARY Net sales of SEK 5,329 m, +1% total growth NET SALES AND EBIT BEFORE I.A.C ▪ -7% organic SEKm SEKm ▪ +5% FX Net sales 6,000 +1% 1,200 ▪ +3% M&A 5,500 1,100 5,000 1,000 EBIT before i.a.c. of SEK 900 m, -2% 4,500 900 ▪ EBIT margin of 16.9% (17.5%) 4,000 EBIT 800 + Efficiency
Slide 5: H1 2019 Financial Summary
H1 2019 FINANCIAL SUMMARY Net sales of SEK 9,979 m, +3% total growth NET SALES AND EBIT BEFORE I.A.C ▪ -6% organic SEKm SEKm ▪ +6% FX 10,000 2,200 ▪ +3% M&A 9,000 Net sales 2,000 +3% 8,000 1,800 EBIT before i.a.c. of SEK 1,518 m, -3% 1,600 ▪ EBIT margin of 15.2% (16.0%) 7,000 EBIT 1,400 + Efficiency
Slide 6: Sales Growth in Constant Currency
SALES GROWTH IN CONSTANT CURRENCY • Average quarterly organic growth Total growth SEKm of 5% Q2 17 – Q2 19 40% 19,000 36% 18,000 32% 17,000 28% 16,000 24% 15,000 20% 14,000 16% 13,000 12% 12,000 8% 4% 11,000 0% 10,000 -4% 9,000 -8% 8,000 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 201
Slide 7: Sales Growth in Constant Currency LTM
SALES GROWTH IN CONSTANT CURRENCY LTM • +116% total growth in Non RV OEM from 2014 to 2019 LTM Adjusted growth SEKm 24% 19,000 • +56% total growth in RV OEM 20% 18,000 from 2014 to 2019 LTM 17,000 16% 16,000 • Average organic growth 2014 to 2019 LTM: 12% Non RV OEM: +7% 15,000 RV OEM: +4% 8% 14,000
Slide 8: Building Up a More Balanced Dometic
BUILDING UP A MORE BALANCED DOMETIC NON RVOEM GROWING FROM 61% OF SALES IN Q2 2018 TO 67% IN Q2 2019 Q2 2018: SEK 5,260m Q2 2019: SEK 5,329m 33% 39% -17%* 61% 67% +5%* * In constant currency Non RVOEM RVOEM
Slide 9: EBIT and EBIT Margin Before I.A.C
EBIT AND EBIT MARGIN BEFORE I.A.C • 0.2% point EBIT margin decline EBIT RUN RATE 14.2% (14.4%) rolling 12 months SEKm EBIT-margin 1,050 15% 900 14% 750 600 13% 450 300 12% 150 0 11% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 EBIT EBIT margin, rolling 12 months
Slide 10: Product Highlights
PRODUCT HIGHLIGHTS Dometic Frigo DC • Dometic enters the growing market for professional last-mile food deliveries • Electronic cooling system for temperature controlled transportation • Combined compressor and condenser into a single unit • Compact, lightweight and does not require a roof-mounted s
Slide 11: Americas
AMERICAS Net sales of SEK 2,603 m, -12% organic NET SALES AND EBIT MARGIN BEFORE I.A.C. ▪ Good growth for Power & Control driven by 2,800 21.0% Marine 2,400 18.0% ▪ Food & Beverage negative due to weaker RV demand. Strong mobile cooling growth OEM, 63% 2,000 15.0% AM, 37% ▪ Climate negative due to w
Slide 12: EMEA
EMEA Net sales of SEK 2,313 m, +1% organic NET SALES AND EBIT MARGIN BEFORE I.A.C. ▪ Strong Climate growth, driven by Kampa 2,400 21.0% ▪ Strong Power & Control growth due to new 2,100 18.0% product launches 1,800 OEM, 42% 15.0% ▪ Good growth for Food & Beverage driven by AM, 58% 1,500 positive deve
Slide 13: APAC
APAC Net sales of SEK 413 m, -12% organic NET SALES AND EBIT MARGIN BEFORE I.A.C. ▪ Positive growth in Asia while negative in Pacific 600 32.0% ▪ Negative Food & Beverage and Climate due to 28.0% 500 decline in RV in Australia 24.0% OEM, 49% ▪ Negative Power & Control due discontinued CPV 400 AM, 51
Slide 14: Q2 Strategy Execution
Q2 STRATEGY EXECUTION Profitable expansion 1 ▪ Entering professional food deliveries ▪ Positive evolution of Kampa ▪ Increased focus on Aftermarket growth ▪ Adding resources to M&A teams Product leadership 2 ▪ Key Operations and Product Development managers in place ▪ Improvement of Innovation Index
Slide 15: Per-Arne Blomquist, CFO
PER-ARNE BLOMQUIST, CFO Mobile living made easy. “> DOMETIC
Slide 16: 5 Years Sales and EBIT Development
5 YEARS SALES AND EBIT DEVELOPMENT NET SALES 111% ▪ Sales growth +111% 18 274 18 550 14 044 12 388 11 486 8 806 2014 2015 2016 2017 2018 2019 LTM EBIT BEFORE I.A.C 159% ▪ EBIT before i.a.c +159% 2 679 2 640 1 621 1 860 1 412 1 018 2014 2015 2016 2017 2018 2019 LTM
Slide 17: 5 Years EBITDA and Operating Cash Flow Development
5 YEARS EBITDA AND OPERATING CASH FLOW DEVELOPMENT EBITDA BEFORE I.A.C 171% ▪ EBITDA before i.a.c +171% 3 205 3 314 2 181 1 703 1 919 1 223 2014 2015 2016 2017 2018 2019 LTM OPERATING CASH FLOW 241% ▪ Operating cash flow +241% 3 202 2 616 1 727 1 390 1 296 940 2014 2015 2016 2017 2018 2019 LTM
Slide 18: Dometic Group Trends
DOMETIC GROUP TRENDS SALES (SEKm) EBIT BEF. I.A.C (SEKm) 19,000 2,700 18,000 2,550 2,400 17,000 2,250 16,000 2,100 1,950 15,000 1,800 14,000 1,650 1,500 10,000 1,350 Jun Sep Dec Mar Jun Sep Dec Mar Jun Jun Sep Dec Mar Jun Sep Dec Mar Jun 2017 2018 2019 2017 2018 2019 EBIT BEF. I.A.C (%) OPERATING CA
Slide 19: Business Area Development
BUSINESS AREA DEVELOPMENT CPV +6% SALES SPLIT, RV +1% (-5% CC) (1% CC) BUSINESS AREA* 10,000 2,200 9,500 2,150 2,100 9,000 2,050 8,500 2,000 8,000 1,950 1,900 7,500 1,850 7,000 1,800 Jun Sep Dec Mar Jun Sep Dec Mar Jun Jun Sep Dec Mar Jun Sep Dec Mar Jun 2017 2018 2019 2017 2018 2019 MARINE +61% RET
Slide 20: Application Areas
APPLICATION AREAS FOOD & BEVERAGE -2% CLIMATE +4% SALES SPLIT, (-7% CC) (-2% CC) APPLICATION AREA* 6,000 7,800 7,600 5,500 7,400 5,000 7,200 7,000 4,500 6,800 4,000 6,600 Jun Sep Dec Mar Jun Sep Dec Mar June Jun Sep Dec Mar Jun Sep Dec Mar June 2017 2018 2019 2017 2018 2019 POWER & CONTROL +74% OTHE
Slide 21: Key Ratios
KEY RATIOS Q2 Q2 H1 H1 FY SEKm 2019 2018 2019 2018 2018 Sales Net sales 5,329 5,260 9,979 9,703 18,274 Growth 1.3% 33.2% 2,8% 31,3% 30.1% Organic growth, % -6.8% 8.7% -6.4% 9.3% 4.7% Profitabitlity Gross profit 1,808 1,757 3,270 3,136 5,951 Gross profit, % 33.9% 33.4% 32.8% 32.3% 32.6% EBIT before i
Slide 22: Net Sales Bridge Q2
DOMETIC GROUP NET SALES BRIDGE Q2 SEKm TRANSLATION FX DETAILS Share of +1% Net Sales impact USD 180 71% 5,329 EUR 42 16% 5,260 AUD 0 0% HKD 4 1% 5% -7% 3% GBP 5 2% CNY 1 0% Other 22 9% Total 254 Q2 2018 Translation FX Organic growth M&A Q2 2019
Slide 23: Earnings per Share – Q2
EARNINGS PER SHARE – Q2 SEKm Total Group 2019 EPS 2018 EPS Net Sales 5,329 5,260 • Q2 2019: EBIT (before i.a.c) 900 3.04 919 3.11 Total tax rate: 26% (26%) Tax paid: 25% (16%) Finance net -138 -0.47 -72 -0.24 Tax -200 -0.68 -218 -0.74 Result for the period 562 1.90 629 2.13 No. of shares 296 296 Ear
Slide 24: Earnings per Share – H1
EARNINGS PER SHARE – H1 SEKm Total Group 2019 EPS 2018 EPS Net Sales 9,979 9,703 • H1 2019: EBIT (before i.a.c) 1,518 5.13 1,557 5.26 Total tax rate: 28% (26%) Tax paid: 26% (17%) Finance net -265 -0.90 -199 -0.67 Tax -346 -1.17 -354 -1.20 Result for the period 906 3.06 1,004 3.39 No. of shares 296
Slide 25: Regional Results
REGIONAL RESULTS Change (%) Change (%) SEK million Q2 2019 Q2 2018 Rep. Adj.1) H1 2019 H1 2018 Rep. Adj.1) LTM 2019 FY 2018 Americas3) 2,603 2,736 -5% -11% 4,844 5,024 -4% -11% 9,578 9,758 EMEA 2,313 2,064 12% 9% 4,291 3,760 17% 11% 7,237 6,706 Asia Pacific 413 460 -10% -12% 844 919 -8% -11% 1,735 1
Slide 26: Stable Underlying Profit
STABLE UNDERLYING PROFIT EBIT INCREASINGLY IMPACTED BY ACQUISITION RELATED ITEMS SEK million Q2 2019 Q2 2018 H1 2019 H1 2018 Operating profit (EBIT) bef. i.a.c. 900 919 1,518 1,557 Operating profit (EBIT) bef. i.a.c., % 16.9% 17.5% 15.2% 16.0% EBITA* bef. i.a.c 974 973 1,668 1,662 EBITA* bef. i.a.c.
Slide 27: Capex & Product Development
CAPEX & PRODUCT DEVELOPMENT (SEKm, % OF NET SALES) CAPEX 140 2.4% 7% 120 6% 100 1.7% 5% 80 1.8% 4% ▪ Q2 2019 CAPEX: 60 127 117 3% 1.7% of net sales 100 40 71 84 88 78 86 90 2% (2.4% in 2018) 20 1% 0 0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2017 2017 2018 2018 2018 2018 2019 2019 PD 120 6% 2,0% 100 1.7% 5%
Slide 28: Working Capital Development
WORKING CAPITAL DEVELOPMENT IMPACT ON CASH FLOW FROM CHANGES IN CORE WORKING CAPITAL ▪ Average CWC/LTM net sales: SEKm 23.5 % (22.9% Excl. Kampa) 600 22.7% 23.5% 23.5% 25% 400 20% 200 355 253 311 15% 183 148 0 -141 -149 10% -200 -556 5% -400 -825 0% -600 -800 -5% -1,000 -10% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 29: Working Capital
WORKING CAPITAL SEKm 4,716 Comment: 4,633 4,408 4,317 Kampa: 3,986 +SEK 175 m 3,707 3,873 3,484 Inventory include 58 MSEK 3,628 tariffs 3,772 Kampa: 2,520 2,459 2,576 +SEK 107 m 2,045 1,705 Kampa: -1,595 -1,356 -1,491 -1,616 -1,652 -SEK 22 m June September December March June 2018 2018 2018 2019 201
Slide 30: Cash Flow
CASH FLOW SEKm 129% 1,600 250% 1,400 200% 1,200 90% 150% 373 1,000 78% 100% 800 50% 1,417 600 0% 943 859 400 844 -50% 667 570 536 200 -100% 84 0 -27 -150% -200 -200% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2017 2017 2018 2018 2018 2018 2019 2019 Operating cash flow Cash conversion
Slide 31: Net Debt Leverage and Net Debt Details
NET DEBT LEVERAGE AND NET DEBT DETAILS NET DEBT 3.5 3.3 3.3 3.3 3.0 3.0 3.0 2.8 2.8 2.5 2.0 2.3 1.7 1.5 1.3 1.0 0.5 1.0 0.0 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 SEKm Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 RCF 0 0 0 459 380 0 0 0 0 E
Slide 32: Debt Management - Capital Structure Activities
DEBT MANAGEMENT - CAPITAL STRUCTURE ACTIVITIES • SEK Bond issued under the EMTN program in February. SEK 1 bn 2 years, 2% • First issuance in the SEK Commercial paper program in March, SEK 500 m, 3 months 0.5% • Eurobond 7 years after Q1 release EUR 300 m 3% • Amortization of current bank loans EUR
Slide 33: Operating Cash Flow and Cash on Hand
OPERATING CASH FLOW AND CASH ON HAND CREATES FLEXIBILITY FOR M&A ACTIVITIES SEK million Q2 2019 Q2 2018 H1 2019 H1 2018 Operating cash flow 1,417 943 1,502 916 In addition to cash on hand, LTM operating cash flow 3,202 2,117 3,202 2,117 unutilized RCF EUR 200 m Cash on hand 2,618 1,089 2,618 1,089
Slide 34: Debt Maturity Profile July 2019
DEBT MATURITY PROFILE JULY 2019 3,500 3,163 3,086* 3,163 USD Loans 3,000 EUR Loans 2,500 1,946 EUR Bonds 2,000 SEK Bond 1,500 1,000 1,000 500 0 0 0 0 Maturity 2019 Maturity 2020 Maturity 2021 Maturity 2022 Maturity 2023 Maturity 2024 Maturity 2025 Maturity 2026 Maturity Maturity Maturity Maturity Ma
Slide 35: Financial Targets
FINANCIAL TARGETS Mid/long term FY 2016 FY 2017 FY 2018 LTM 2019 Financial target Net Sales Growth 6% 13% 26% 7% 10% EBIT Margin1 13.1% 13.2% 14.7% 14.2% 16-17% Net Debt / EBITDA 1.7x 3.3x 2.8x 2.8x 2x Dividend Policy 40% 40% 40% - 40% 1 EBIT before I.A.C.
Slide 36: Summary Q2 2019
SUMMARY Q2 2019 Total sales growth of 1% ▪ -7% organic growth, non RV holding up well ▪ Continued to strengthen the Aftermarket organization ▪ Increased pace in product innovation ▪ Weak RV markets in Americas and Pacific ▪ Actively building up acquisitive pipeline Good EBIT performance in tough env
Slide 37: Outlook Update - Full Year 2019
OUTLOOK UPDATE - FULL YEAR 2019 Previous full year 2019 outlook New full year 2019 outlook Organic growth to be slightly positive Negative organic growth ▪ Global life style trends ▪ Slightly positive organic growth in H2 2019 ▪ New product launches ▪ Uncertain RV markets ▪ Further expansion in busi
Slide 38: Q&A
Q&A Mobile living made easy. “> DOMETIC
Slide 39: Appendix
APPENDIX Mobile living made easy. “> DOMETIC
Slide 40: Appendix A: Quarterly Summary Key Financials
APPENDIX A QUARTERLY SUMMARY KEY FINANCIALS Q2 Q2 H1 H1 FY SEK m 2019 2018 2019 2018 2018 Net sales 5,329 5,260 9,979 9,703 18,274 EBITDA 1,100 1,048 1,918 1,809 3,113 % of net sales 20.6% 19.9% 19.2% 18.6% 17.0% Operating profit (EBIT) 900 919 1,518 1,557 2,587 % of net sales 16.9% 17.5% 15.2% 16.0
Slide 41: Appendix B: Group P&L
APPENDIX B GROUP P&L Q2 Q2 H1 H1 FY SEK m 2019 2018 2019 2018 2018 Net sales 5,329 5,260 9,979 9,703 18,274 Cost of goods sold -3,521 -3,503 -6,709 -6,567 -12,323 Gross Profit 1,808 1,757 3,270 3,136 5,951 Sales expenses -626 -591 -1,189 -1,117 -2,259 Administrative expenses -232 -226 -453 -417 -855
Slide 42: Appendix C: Application Areas
APPENDIX C APPLICATION AREAS Q2 Q2 H1 H1 FY SEK m 2019 2018 2019 2018 2018 Net sales, external Americas Food & Beverage 477 598 926 1,139 2,135 Climate 981 1,095 1,794 1,991 3,797 Power & Control 922 850 1,744 1,558 3,161 Other applications 223 194 380 336 664 Americas net sales, external 2,603 2,73
Slide 43: Disclaimer
DISCLAIMER This document contains statements that constitute forward looking statements. These statements appear in a number of places in this document and include statements regarding the intent, belief or current expectations of the customer base, estimates regarding future growth in the different
Slide 44: Mobile living made easy. “> DOMETIC
Mobile living made easy. “> DOMETIC