Arbonia Ag · SIX:ARBN
Arbonia — FY2022 Earnings Presentation
44 slides from Arbonia's earnings presentation, Feb 28, 2023
Slide 1: Annual results 2022
Annual results 2022 Alexander von Witzleben, Executive Chairman Daniel Wüest, Group CFO
Slide 2: Overview FY 2022
Overview FY 2022 Key metrics (CHF M) Net revenues EBITDA1 Net debt/cash EBITDA margin Leverage Ratio +15.8% 11.0% 11.3% 9.4% 0.9x -0.7x 1.6x +1.3% -1.8% 1′186 1′202 1′038 141 184 -16.3% 114 134 112 -93 2020 2021 2022 2020 2021 2022 2020 2021 2022 Despite challenging environment Combination of unprec
Slide 3: 2022 in context
2022 in context Overall The war in Ukraine led to geopolitical and economic uncertainty with challenging effects: • Strengthening of CHF, disrupted supply chains and unprecedented increase in energy and raw material prices • Availability of semi-conductors and electronics improving, cost of wooden m
Slide 4: Development of the HVAC and Doors Division
Development of the HVAC and Doors Division For illustrative purposes1,2 In M CHF >1′525 1.07 1.11 1.15 1.11 1.07 1.08 1.01 ~1'300 1′183 1′199 >725 1′058 1′038 1′008 895 552 503 509 502 487 >210 441 147 >15.0% 73 121 >800 631 76 506 555 529 62 368 43 408 2 >12.5% 71 59 41 2015 2017 2018 2019 2020 202
Slide 5: Electric power sourcing strategy
Electric power sourcing strategy Reducing price volatility by increasing own production and structured sourcing Status quo (2022) Target (2026) Wind PV Local suppliers (regulated) 1% 4% PV 14% CHP1 8% 20% Wind 1% ~ 100 M kWh 20-25% ~ 100 M kWh 25% CHP1 Tranches 87% External sourcing 15-25% Spot • In
Slide 6: Agenda
Agenda 1. Group 1. Group results results 2. Divisional highlights 3. Outlook 4. Appendix Annual results 2022 | 28 February 2023 6
Slide 7: Income Statement without one-time effects
Income Statement Without one-time effects In CHF M 2022 in % 2021 in % I Revenues Net revenues I 1'202.1 100.0 1'186.2 100.0 • Net revenues up 1.3% II despite lower volumes Cost of material and goods -593.7 -49.4 -548.6 -46.3 and strong CHF II Personnel expenses -352.5 -29.3 -365.0 -30.8 II Cost bas
Slide 8: Income Statement as reported
Income Statement as reported In CHF M 2022 in % 2021 in % I One-time effects Net revenues 1'202.1 100.0 1'186.2 100.0 • One-time costs with CHF 4.1 M negative EBITDA Cost of material and goods -593.7 -49.4 -548.9 -46.3 impact mainly from I closure of Koralle DE Personnel expenses -355.5 -29.6 -372.9
Slide 9: Net revenues, EBITDA and EBIT performance
2022 summary Performance by Group and Divisions CHF M1,2 +13.6% Net revenues +1.3% +16.5% 1’186 1’202 +9.9% 1’058 1’038 +2.5% +0.2% 30 1,000 555 529 631 646 503 509 552 553 20 500 10 0 2019 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022 0 +4.4% (incl. margin) -16.3% +0.2% +5.3% 134.3 107.7 1
Slide 10: EBITDA bridge 2021 – 2022
EBITDA bridge 2021 – 20221 Arbonia Group Amounts in CHF M -16.3% 134.3 112.4 -21.9 Mio. EBITDA SPI SVI MCC SI PI ECC Residual FX-Effect Corporate EBITDA 2021 Services 2022 1) 2) 3) 4) 5) 6) 7) 8) 9) Explanations: 1) SPI - Sales-Price-Increase 6) ECC - Energy-Cost-Change 2) SVI - Sales-Volume-Increas
Slide 11: Net revenues by Division and Region
Net revenues by Division and Region German market contributed half and DACH two-thirds of revenues Net revenues by Division Net revenues by Region 7% (8%) 8% (8%) 10% 46% 54% (9%) 49% (47%) (53%) (50%) 12% (11%) 10% 14% (10%) (14%) Germany Southern Europe1 HVAC Doors Switzerland Eastern Europe2 RoW
Slide 12: Overview organic revenue growth FY 2020-2022
Overview organic revenue1 growth FY 2020-2022 In CHF M Arbonia Group 19.3% • 5.5% organic growth lower than 2021 but above mid- 5.5% term guidance of >5% in a challenging market environment 9.8% • Substantial decline in H2 2022, especially in Q4 2022 due to unprecedented destocking of wholesalers, 1
Slide 13: Cash flow
Cash flow In CHF M I Cash flow from operating activities • Cash flow from operating activities negatively impacted by lower operational performance, 150 -118.5 M substantial increase of net working capital 100 (CHF 117 M) … 141.3 50 92.8 • …however effects which led to increase of NWC expected to pa
Slide 14: Net cash to net debt bridge
Net cash to net debt bridge In CHF M Net Cash (12 2021) -93 Capex 149 Purchase Corporate Center (CC) 25 Elimination IFRS 16 CC -6 Acquisitions 44 Increase in share (KIWI) 2 Dividend 21 Purchase treasury shares 13 New lease liabilities 11 EBITDA -108 Change of NWC 117 Others 17 26 CF from operating a
Slide 15: Net debt as of December 2022
Net debt as of December 2022 In CHF M 200 184 3x 22 150 162 I Net debt and leverage 2x 100 68 • Increase of net working capital, capex, acquisitions 50 23 1.61 1x and lower EBITDA led to substantial cash outflow and transformed net cash position into net debt of 27 0.62 CHF 184 M 120 45 • Leverage r
Slide 16: ESG reporting Highlights 2022
ESG reporting Highlights 2022 CO2 and Energy Milestones • Emissions per CHF net revenue 0.063 decreased by 9.1% from 0.055 in 2021 0.055 0.050 to 0.050 in 2022 • Total emissions (Scope 1 and 2 in tCO2e) decreased by 7.9% Achieved group-wide Ecovadis sustainability rating, ratings for 54% of 2020 202
Slide 17: Agenda
Agenda 1. Group results 2. Divisional highlights H1 2022 and outlook 3. Outlook 4. Appendix Annual results 2022 | 28 February 2023 17
Slide 18: Development of the HVAC Division
Development of the HVAC Division For illustrative purposes: Net revenues 2015 2026 In M CHF >800 1.07 1.11 1.15 1.11 1.07 1.08 1.01 631 646 555 529 506 408 368 >100 71 59 41 >12.5% 2015 2017 2018 2019 2020 2021 2022 2023 BU 2026 Mid-term Guidance Capital Growth products EUR / CHF Markets Day annua
Slide 19: HVAC growth products in strong demand in 2022
HVAC growth products in strong demand in 2022 Target: 2/3 net revenues with growth products Floor heating (pipes)1 Radiators (units) > +25% > -20% Battery 2021 2022 Heat pump Radiators 2021 2022 Heat pump (units)2 > +40% Floor Net revenues heating by product (ambition) Split 2022 – net revenue 2021
Slide 20: Energy-efficient renovation
Energy-efficient renovation Energy-efficient renovation1 (x-flair, RVU, underfloor heating, PV-plant, RF-battery, heat pump system, building envelope renovation) 7.6 t CO2/a 1.8 t CO2/a Eco-balance Eco-balance Total annual primary Total annual primary energy demand2 261 kWh/m²a energy demand2 51 kWh
Slide 21: Heat pump Status and key facts
Heat pump Status and key facts Outlook: heat pump sales development Key facts Heat pump sales • Production start in the new heat pump factory in outlook with significant Opočno (CZ) in summer 2022. Further expansion >200M upside potential planned in 2024 to double production capacity to (extension o
Slide 22: Heat pump Product portfolio
Heat pump Product portfolio Unit kW COP1 Cooling Mod.2 Comments 3 • The product portfolio consists dynamic pro 4 – 18 4.80 of premium heat pumps and outdoor unit water storage systems for Air- optimal combined operation water with state of the art control dynamic AW I software 5 – 16 4.21 indoor uni
Slide 23: Battery storage Status and key facts
Battery storage Status and key facts Redox flow battery Forecast Key facts • Field tests successfully completed • First orders delivered market entry in H2 2022 Market Launch • After moving production to Stribro (CZ), successful start of full series production in December 2022 • Framework contract
Slide 24: Steel panel radiator Current status 2022
Steel panel radiator Current status 2022 German SPR market Current status Key facts / market (in M units)1 • Declining volumes due to • Destocking expected to slow down destocking, compensated on top-line in H1 2023 by price increases but negative • Normalisation of the market in CAGR -3% bottom lin
Slide 25: Strong growth in Southern Europe
Strong growth in Southern Europe Acquisition of Cirelius (PT) in December 2022: • Acquisition of Portuguese HVAC distributor Cirelius (c. EUR 20 M sales in 2022), adding residential to existing commercial portfolio for enhanced Iberian peninsula access (total c. EUR >50 M sales in ES & PT) • In 2022
Slide 26: Development of the Door Division
Development of the Door Division For illustrative purposes: Net revenues 2015 2026 In M CHF >725 1.07 1.11 1.15 1.11 1.07 1.08 1.01 552 553 502 503 509 487 157 154 145 144 145 147 >110 395 399 340 357 359 364 76 62 >15.0% 73 2 2015 2017 2018 2019 2020 2021 2022 2023 BU 2026 Mid-term Guidance Capit
Slide 27: Operations
Major investment programs resulting in capacity and efficiency gains Business Unit Wood Solutions Start production of Start production CHP new door frame plant at Prüm factory factory (+30% supplying 100% of heat capacity) required and 50 – 60% of electricity New drilling line at Start building of C
Slide 28: Strategic pillars for further growth and profitability
Strategic pillars for further growth and profitability High market potential Cost leadership Digital services • Continue to grow project business • Take advantage of Europe's most • Service the entire lifecycle of a door for wood and glass solutions efficient and modern interior doors or shower encl
Slide 29: Prüm and Garant are continuously gaining market share
Prüm and Garant are continuously gaining market share Imbalance of housing supply and demand1 Doors produced at Prüm and Garant Number of doors (in M) +3.5% +19% Deficit of flats to 700k house the population 1.81 1.78 1.77 1.63 1.55 1.50 Flats to be built per 400k year according to the German Govern
Slide 30: Collaboration of the Business Units Wood and Glass
Collaboration of the Business Units Wood and Glass Business Unit Glass Solutions Projects won Business Unit Glass Solution Residential building, Residential building, 2022 Frankfurt Stuttgart • Sanitary installer are still focusing on HVAC products due to high subsidies • Price increases for sanitar
Slide 31: Agenda
Agenda 1. Group results 2. Divisional highlights 3. Outlook 4. Appendix Annual results 2022 | 28 February 2023 31
Slide 32: Energy-efficiency in housing in Germany
Energy-efficiency in housing in Germany Re-focussing subsidy programmes towards renovation1 Share of floor area of residential buildings Baseline per energy-efficiency class • ⅓ of ~19 M residential buildings2 in Germany carry energy-efficiency 17% 15% 15% class G or H and use ≥200 kWh per m2 annual
Slide 33: Demand for new flats steadily increasing
Demand for new flats steadily increasing Developments in the German housing market1 Average living space per person (in m2) Baseline and number of single-households (in M)2 • Completions of new flats reached just 293k units in 2021, compared to a 47.7 m2 demand of ~400k annually free capacities ca
Slide 34: New construction vs renovation demand
Demand for construction of single-family houses impacted, whereas demand for renovation is continuously high Arbonia's approximate revenue split by segments New construction Health and 35% Education Single-family house Industrial Retail and Renovation Office 65% Multi-family house (Flats) Hotels Res
Slide 35: Guidance of Arbonia Group
Guidance of Arbonia Group Guidance 2023 Revenues EBIT margin1 ~ 1'300 M ~ 4% EBITDA margin1 Capex 20232 ~ 10% ~ 90 M (maintenance & growth) Mid-term guidance (2026) confirmed 1 excl. one-time effects | 2 excl. acquisitions Annual results 2022 | 28 February 2023 35
Slide 36: Agenda
Agenda 1. Group results 2. Divisional highlights 3. Outlook 4. Appendix (incl. B+L study – market outlook) Annual results 2022 | 28 February 2023 36
Slide 37: Appendix
ARBONIA @ Appendix
Slide 38: Organic growth
Organic growth1 Positive price effects off-set negative volume effects Net revenues Δ as reported FX Acq. Organic 2022 2021 Year effect effect growth1 in CHF M Total Arbonia 1'202.1 1'186.2 +1.3% -6.0% +1.8% +5.5% HVAC 646.2 630.5 +2.5% -6.0% +1.5% +7.0% Doors 552.8 551.8 +0.2% -6.0% +2.4% +3.8% 1 A
Slide 39: Balance sheet
Balance sheet In CHF M 2′000 1'623 1'520 I Assets 1′500 • Decrease of asset base by c. CHF 103 M mainly due 36.5% 27.8% to FX 1′000 • Overall negative FX translation effects (EUR, PLN, 72.2% CZK) on asset base (incl. PPA and Goodwill) 500 63.5% 0 12 2021 12 2022 Current assets Non-current assets 2′0
Slide 40: Operating NWC
Operating NWC1 In CHF M 300 40% 35% 250 30% 200 22.8% 25% 20.5% 150 20% 280 12.7% 13.5% 13.5% 246 15% 100 153 160 10% 132 50 5% 0 0% 2020 H1 2021 2021 H1 2022 20222 NWC in % of net revenues NWC Operating NWC = Accounts receivable + accounts receivable project business + inventories + contract assets
Slide 41: Market environment Construction market 2023
Market environment Construction market 2023 Residential Non-residential Central Europe Central Europe 0.0% -0.5% Germany 1.0% Germany 1.0% 0.4% 0.2% Switzerland 1.0% Switzerland 0.6% Eastern Europe Eastern Europe -6.1% -0.4% Poland 3.7% Poland 3.7% -6.1% 0.7% Czech Republic 1.4% Czech Republic -0.5%
Slide 42: Market environment Construction market 2024
Market environment Construction market 2024 Residential Non-residential Central Europe Central Europe -2.0% 2.0% Germany 0.5% Germany -0.5% 1.1% 0.4% Switzerland 1.7% Switzerland 0.8% Eastern Europe Eastern Europe -4.5% 3.6% Poland 4.0% Poland 3.1% 5.3% 8.6% Czech Republic -1.5% Czech Republic 0.5%
Slide 43: Arbonia shareholder structure
Arbonia shareholder structure As of 31 December 2022 Free float market capitalisation: CHF 648 M3 22% 3% 3% 72% Free float1 Artemis Beteiligungen I AG Leo Looser Arbonia management2 Tradeable free float of ~72% 1 every other shareholder with <3% of shares outstanding 2 Members of the Board of Direct
Slide 44: Thank you
ARBONIA @ Thank you