Interpump Group S.p.a. · MIL:IP
Interpump — FY2019 Earnings Presentation
34 slides from Interpump's earnings presentation, Feb 14, 2020
Slide 1: Fourth Quarter 2019 Consolidated Results
O419 Fourth Quarter 2019 Consolidated Results Interpump Group S.p.A.
Slide 2: Table of Contents
Table of Contents Welcome! Our Preliminary FY 2019, Q4 2019 & FY 2018 Results start on page 3 New to the company and could use an Introduction? See Who we are on page 11 Our yearly update on Markets and Diversification is on page 19 More information on our M&A policy and activity on page 23 You will
Slide 3: FY 2019 Highlights
FINANCIALS FY 2019 Highlights € mn – at unchanged financial principles – preliminary data +7% Consolidated Sales +4.8% Consolidated EBITDA +11.2% Net Income UNCHANGED Debt/EBITDA ratio +4.0% Cash Flow from Operations +52% Free Cash Flow 2
Slide 4: FY 2019 Preliminary Consolidated Results
FINANCIALS FY 2019 Preliminary Consolidated Results € mn FY 18 FY19 FY 2018 y/y Organic growth in sales +1.4% FX contribution +1.4% Increase in perimeter +4.2% TOTAL REPORTED SALES 1,279.2 1,368.6 +7.0% EBITDA 288.5 317.9 n.s. net of IFRS16 effect, for comparison only 302.4 +4.8% EBITDA / SALES 22.6
Slide 5: Q4 2019 Consolidated Results
FINANCIALS Q4 2019 Consolidated Results € mn Q4 18 Q419 FY 2018 y/y Organic growth in sales -4.7% FX contribution +0.9% Increase in perimeter +9.0% TOTAL REPORTED SALES 325.6 342.5 +5.2% EBITDA 68.7 77.6 n.s. net of IFRS16 effect, for comparison only 73.5 +7.0% EBITDA / SALES 21.1% 22.7% net of IFRS
Slide 6: Quarterly & Preliminary FY Results by Sector
FINANCIALS Quarterly & preliminary FY Results by Sector € mn WATER-JETTING Q419 Q4 18 y/y FY19 FY 2018 y/y Organic growth in sales +5.1% +2.5% FX contribution +1.3% +2.0% Increase in perimeter +2.7% +2.7% TOTAL REPORTED SALES 121.5 +9.1% 466.4 +7.2% EBITDA 35.0 n.s. 130.7 n.s. net of IFRS16 effect,
Slide 7: FY2018 Consolidated Results
FINANCIALS FY2018 Consolidated Results € mn FY 17 FY18 FY 2018 y/y Organic growth in sales +13.7% FX contribution -2.6% Increase in perimeter +6.6% TOTAL REPORTED SALES 1,086.5 1,279.2 +17.7% EBITDA 248.6 288.5 +16.0% EBITDA / SALES 22.9% 22.6% EBIT 198.9 236.5 +18.9% EBIT / SALES 18.3% 18.5% NET IN
Slide 8: Sales & EBITDA Trend
FINANCIALS Sales & EBITDA Trend € mn 318 1.369 IFRS16 289 1.279 249 1.087 923 199 895 180 672 136 557 527 472 105 105 95 389 400 87 322 74 48 08 09 10 11 12 13 14 15 16 17 18 19 08 09 10 11 12 13 14 15 16 17 18 19 First 12 months’ turnover Rest of business of acquired companies net of Electric Motor
Slide 9: Financial Ratios
FINANCIALS Financial Ratios Prudent debt policy and satisfactory return on capital employed Net Debt / EBITDA (12 M) Return On Capital Employed (12M) Net of treasury stock (at book value) and including commitments for purchase of investments FY Operating profit average of (consolidated shareholder's
Slide 10: The Balance of Growth
FINANCIALS The Balance of Growth Thanks to Interpump’s approach to M&A, the cost of acquisitions in terms of capital employed is comparable to the one of organic growth... No restructuring costs ORGANIC GROWTH COSTS ACQUISITIONS …However, acquired growth brings many more benefits. ORGANIC GROWTH BEN
Slide 11: Expectations for 2020-2022
FINANCIALS Expectations for 2020-2022 Including acquisitions Robust increase in top line Total Sales growth: ~ 33% Excellence in profitability EBITDA margin ~22% (despite potential temporary dilution from acquisitions) Prudent financial leverage Net Debt / EBITDA between 1x and 1.5x 10
Slide 12: Who we are
Who we are INTERPUMP GROUP Public company (~75% free float) Listed at the Milan Stock Exchange since 1996 (ticker: IP.MI) Among the largest market caps in the STAR segment Stock is eligible for PIRs (government-sponsored saving investment plans for Italian households with significant tax advanta
Slide 13: Diversified across every dimension
Diversified across every dimension Diversification of our business is the key to our resilience and low overall cyclicality Both divisions have moved from the initial 100% concentration in one sector We sell our products all over the world, to a wide range of applications across either through our i
Slide 14: Know-How & Innovation
WATER JETTING Competitive Scenario Flow Handling Components for Niche of Very High Pressure Plunger Pumps Food, Cosmetics & Pharma (estimated addressable applications: <1bn/yr) (estimated market size: € 8 bn/yr) Wide High Know-How & Innovation Product Range Narrow Low Low High Low High Market Penetr
Slide 15: Narrow Product Range
HYDRAULICS Competitive Scenario A fast-growing global player in a huge market (est. € 50 bn/yr) with countless opportunities for acquisitions Wide Product Range Narrow Low Market Penetration High Markets served, geographical presence Symbolic representation – not to scale 14
Slide 16: Main Companies, Brands and Products: Water-Jetting
WATER JETTING Main Companies, Brands and Products December 2019 – Total employees: 1,887 High-pressure Plunger Pumps Flow Handling Components High-pressure pumps Pumps, mixers, Plunger pumps Production and rental Specialized solutions (up to 1,500 HP - Homogenizers for components & high flow/
Slide 17: Main Companies, Brands and Products: Hydraulics
HYDRAULICS Main Companies, Brands and Products December 2019 – Total employees: 5,252 Power Take-Offs Valves Rubber hoses INTERPUMP HYDRAULICS, Directional Control Valves Muncie Power Products, Rotating manifolds I.M.M. PZB, Hydrocar, Takarada Hypress Planetary Reduction Gears Interpump Hose
Slide 18: Application examples: Water-Jetting
WATER JETTING Application examples FOOD, COSMETICS, PHARMACEUTICAL AUTOMOTIVE Pumps, valves, processing and cleaning systems Deburring of common-rail engine heads Agitators (including magnetic trasmission) Cutting of bodywork and other materials High-pressure homogenizers Cleanup of welded seals Wat
Slide 19: Application examples: Hydraulics
HYDRAULICS Application examples TRUCK OUTFITTERS EARTH-MOVING Tipping trucks Excavators and mini-excavators Trash collection - Sewer cleaning Backhoe loaders Firefighting - Snow plowing Skid-steer loaders Towing - Car Carriers Crane trucks AGRICULTURE TRUCK MANUFACTURERS Farm tractors Factory-fitted
Slide 20: Diversification by application field
Diversification by application field 2019 Total Turnover: Euro 1,369 million Truck 14% Cleaning 5% Other 4% Shipyard/Marine Contractors 5% 3% Unidentified Food Cosmetics application field & Pharma 7% (generic dealers) 26% Other Industries 9% Oil & Gas 3% Earth Moving 6% Drilling & Mining 1% Lifting
Slide 21: Diversification is a never-ending journey
Diversification is a never-ending journey Significant reduction of cyclicality and correlation achieved over the past decade WATER JETTING HYDRAULICS Diversification into many application sectors with different cycles Ongoing expansion into sectors with little or no cyclicality No single sector is c
Slide 22: International Profile
International Profile Geographical breakdown of sales and costs (2019) Sales Total Costs Rest of the World Italy 16% North 10% America 22% North Italy America 46% 27% Rest of Rest of the W.Europe World 29% 13% Rest of Europe 12% China 5% Germany India 3% 7% Eastern Latin America 4% Europe 6% 21
Slide 23: International Profile: emerging markets
International Profile Focus on emerging markets: a well-balanced presence Water-Jetting Hydraulics CHINA (大陆) INDIA BRAZIL New Delhi Beijing Brasília FY19 sales Mumbai FY19 sales FY19 sales €65 mn Pune €13 mn Rio de Janeiro Shanghai Bangalore Chennai €46 mn São Paulo 2016-2019 2016-2019 Avg. organic
Slide 24: M&A: a Successful Track Record
M&A: a Successful Track Record 40+ companies acquired since the IPO in 1996 representing roughly 2/3 of each year’s growth Different purposes for acquisitions: completing the product range, reinforcing competitive positioning, enhancing distribution Bolt-on acquisitions: no disruption in activity, i
Slide 25: Acquisition & Diversification Timeline: Water-Jetting
WATER JETTING Acquisition & Diversification Timeline Applications: from cleaning to countless Ricci Engineering: beer-brewing Fluinox: flow handling for food 2018 and winemaking equipment and plant design. cosmetics & pharma with a specific expertise in powders and pastes Inoxpa: rotative pumps, mix
Slide 26: Acquisition & Diversification Timeline: Hydraulics
HYDRAULICS Acquisition & Diversification Timeline Products: from PTOs only to integrated hydraulic kits, systems and services 2020 Transtecno reduction gears Hydra Dyne Tech rotary swivels and cylinders 2019 Reggiana Riduttori planetary reduction gears 2018 GS-Hydro World leader in non-welded piping
Slide 27: 2019 Acquisitions: Hydra Dyne Tech
HYDRAULICS 2019 Acquisitions: Hydra Dyne Tech Acquired March 2019 - Headquartered in Ontario, Canada - Manufacturer of best-in-class rotary manifolds, valves and hydraulic cylinders, using the proprietary patented LocSealTM technology. Rotary manifolds represent an addition to Interpump’s product ra
Slide 28: 2019 Acquisitions: Reggiana Riduttori
HYDRAULICS 2019 Acquisitions: Reggiana Riduttori Acquired October 2019 - Headquartered in Reggio Emilia, Italy; subsidiaries in Australia, Brasil, Canada, China, France, India, A world leader in design and manufacturing of the Netherlands, Slovakia, USA reduction gears with the most versatile, light
Slide 29: 2020 Acquisitions: Transtecno
HYDRAULICS 2020 Acquisitions: Transtecno Acquired January 2020 - Headquartered in Bologna, Italy; subsidiaries in China, Netherlands, Spain, USA, Mexico - Broad range of applications including specific Designer and manufacturer of reduction product lines for poultry farming, car wash, and renewable
Slide 30: Shareholders, Stock Performance, Analyst Coverage
Shareholders, Stock Performance, Analyst Coverage Updated 12/02/2020 Shareholder Structure Interpump Stock Performance Source: CONSOB/Company Total return to shareholders since the IPO: 13.5% per year (assuming dividend reinvestment and participation to the ‘09 capital increase) IPG HOLDING Share pr
Slide 31: Corporate Offices
Corporate Offices as of 31 December 2019 Board of Directors = independent Board of Statutory Auditors Fulvio Montipò Chairman and CEO Fabrizio Fagnola Chairman Paolo Marinsek Deputy Chairman Federica Menichetti Franco Garilli Lead Independent Director Alessandra Tronconi Angelo Busani Minority Direc
Slide 32: Appendix: Synthesis of results
Appendix Synthesis of results 2019 Euro/million 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ex-IFRS16 Net Sales 424.5 342.9 424.9 472.3 527.2 556.5 672.0 894.9 922.8 1,086.6 1,279.2 1,368.6 EBITDA 87.0 46.9 74.1 94.7 105.8 105.2 136,1 180.3 198.5 248.6 288.5 317.9 302.4 Margin 20.5%
Slide 33: Appendix: Free Cash Flow (12 Months)
Appendix Free Cash Flow (12 Months) (euro/million) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Cash Flow from Operations 25.2 54.6 60.8 65.6 65.3 95.8 120.2 138.0 172.4 209.8 233.4 Adjustment for leases paid (IFRS16) (15.3) Change in Trade Working 44.4 10.1 (21.8) (12.3) (1.7) (23.7) (6.6
Slide 34: Manager's declaration
The Manager in charge of preparing the company’s financial reports declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this presentation corresponds to the document results, books and accounting records. S.Ilario d’Enz