Carel Industries Spa · MIL:CRL
Carel Industries Spa — Q1 2023 Earnings Presentation
40 slides from Carel Industries Spa's earnings presentation, May 12, 2023
Slide 1: 2023 – Q1 Results
CAREL INDUSTRIES S.p.A. 2023 – Q1 Results 12th May 2023 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: Q1 2023 – Highlights
Q1 2023 – Highlights For the ninth consecutive quarter CAREL reported a double digit-organic revenue growth in spite of a challenging scenario in the supply chain, keeping an EBITDA margin close to 21%. • Organic growth stood at 11.3%, exceeding the guidance given in March thanks to an excellent man
Slide 3: Q1 2023 – Results
Q1 2023 – Results KPIs Q1 2023 Revenues bridge m€ Q1 2022 Q1 2023 Δ% 161.0 (1) 17.4 Revenue 128.9 161.0 24.8% 14.6 129.0 Organic Revenue 128.9 143.6 11.3% EBITDA 27.2 33.4(2) 22.8% EBITDA Revenue 21.1% 20.8% Net Profit 16.4 18.5 13.2% Capex 4.7 3.0 -35.3% m€ Revenues Organic Growth M&A Revenues (1)I
Slide 4: Q1 2023 – Revenue breakdowns
Q1 2023 – Revenue breakdowns Breakdown by region Breakdown by sector South America 2% North America 13% HVAC 73% EMEA 73% 161.0 161.0 Refrig. APAC 27% M€ 12% M€ m€ m€ m€ m€ Area Q1 2022 Q1 2023 Δ% Δ% fx Sector Q1 2022 Q1 2023 Δ% Δ% fx EMEA 93.3 117.2 25.7% 26.2% HVAC 83.5 116.6 39.6% 39.4% APAC 17.9
Slide 5: From EBITDA to Net Profit
From EBITDA to Net Profit K€ Q1 '22 Q1 '23 Δ% • Higher D&A mainly due to the purchase EBITDA 27,234 33,439 22.8% price allocation amortization. D&A -5,414 -7,532 EBIT 21,821 25,907 18.7% • Higher Financial charges due to the macro Financial (charges)/income -585 -777 trend on interest rates. FX gain
Slide 6: Q1 2023 – NFP Bridge
Q1 2023 – NFP Bridge 3.9 100.4 95.8 3.0 1.7 21.4 32.7m€ 36.0m€ from from IFRS 16 1.7 IFRS 16 (19.6) (7.5) 63.1 63.1 64.4 NFP Net Profit D&A Leasing/ NWC CAPEX Buy-back and M&A NFP FY 2022 rent fees others Q1 2023 m€ • Stable NFP compared to FY 2022. • ΔNWC +21.4m€: due to higher DSO (linked to seaso
Slide 7: Closing Remarks
Closing Remarks • Q1 2023 was the 9th consecutive quarter reporting a double-digit organic growth. This result, achieved in presence of a challenging electronic material shortage and a deceleration in the refrigeration Q1 2023 sector, confirms once again the resilience of the wide business portfolio
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 Other Luigi Rossi Luciani Luigi Rossi Luciani Other Shareholders; Shareholders; S.a.p.a; 36.17% S.a.p.a; 44.90% 38.90% 24.15% 7 Industries B.V.; 6.12% 7 Industries B.V.; 4.93% At
Slide 10: Income statement and Balance Sheet
Income statement and Balance Sheet Income statement Balance sheet K€ Q1 2023 Q1 2022 Delta % K€ Q1 2023 FY 2022 Delta % Revenues 160,982 128,949 24.8% Fixed Capital 297,665 300,499 (0.9%) Other revenues 1,276 914 39.6% Working Capital 109,817 89,926 22.1% Operating costs (128,819) (102,629) 25.5% Em
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 – 2022A • HVAC: Industrial, Residential, Growing key Commercial markets • Refrigeration: Food Retail and Revenue EBITDA EBITDA margin Net income Food Service €545m €112m ~20.5% €62m Leadership in • Control solutions premium +15
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 Adiabatic humidifiers and Programmable controls HMI and unit terminals Parametric controls Isothermal humidifiers evaporative coolers Electronic controls easily programmable and customizable User interfaces for units and systems Entry le
Slide 15: Long track record of profitable growth
Long track record of profitable growth Revenue (€m) 545 420 327 332 280 255 203 231 1990s 2000A 2001A 2002A 2003A 2004A 2005A 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A 2022A Adj. EBITDA (€m) 112 85 63 65 51 55 38 43 1990s 2000A 2001A 2002A 2003A
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 increase its market leadership market share • Co
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 39% #1 SIGNIFICANT ROOM FOR key E
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 and refrigeration Market GROWING • Improvement in LIVING STANDARDS POPULATION increasing demand for HVAC/R • Focus on WASTE REDUCTION in CHANGE IN food sector CONSUMER • Increas
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 >5% OF REVENUE1 ~12% OF TOTAL WORKFORCE Invested annually in R&D dedicated to R&D 6 R&D CENTRES PROPRIETARY SOFTWARE COMBINING 5 DOMAINS Vast library of proprietary software modules UNIQUE 01100 • Hardware & Firmware developed over the past 1
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 Share OEM Large 39% proprietary diversified EM / Low cost solutions competitors competitors 27% 14% 8% Vertical niche 5% 6% approach Innovation
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 diversified customers
4 Highly efficient global operations serving locally… NORTH AMERICA WESTERN EUROPE NORTH APAC GLOBAL PRODUCTION FOOTPRINT 1 9 Plant Plants 232 1,220 Employees Employees DIRECT AND HIGHLY SKILLED SALES NETWORK 74 x3 201 Sales force Sales force 1 85 x3 Plant Sales force 2 3 BEST POSITIONED TO CAPTURE
Slide 26: …diversified blue-chip customers
4 …diversified blue-chip customers HVAC REFRIGERATION GLOBAL BLUE-CHIP APAC 14% EMEA >10,000 <4% South America 70% Customers 3% BROAD & HIGHLY from first customer1 DIVERSIFIED In c. 100 ~20% North America 13% countries worldwide from top-15 customers2 2022A revenue LONG-TERM ~80% ~70% BUSINESS of To
Slide 27: Track record of profitable growth
5 Track record of profitable growth Double-digit growth Strong profitability High conversion to net income Cash generative business Revenue1 (€m) EBITDA1 (€m) Net Income1 (€m) Operating cash2 (€m) 60 555 112 62 53 50 45 85 49 420 40 327 332 63 65 35 35 28 280 31 31 24 51 255 47 21 231 43 25 203 38 2
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 B 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, mainly a
Slide 30: M&A
M&A
Slide 31: M&A – 2022 – Senva
M&A – 2022 – Senva • Key Data: Enterprise value (100%) = 34-38m€ 2021 Revenues = ~13m USD EBITDA (TTM) = 3.1m USD Employees = ~65 • Industrial fitting: Bolt-on acquisition Strong complementarity with CAREL’s product line-up • Company profile: SENVA is a US company located in Oregon speci
Slide 32: M&A – 2022 – Klingenburg
M&A – 2022 – Klingenburg • Key Data: Enterprise value (100%) = 12m€ 2021 Revenues = ~30m€ EBITDA = 2.4m€ Employees = ~200 • Industrial fitting: Bolt-on acquisition Strong complementarity with Recuperator’s product line-up • Company profile: Klingenburg GmbH and Klingenburg International
Slide 33: M&A – 2022 – Sauber
M&A – 2022 – Sauber • Key Data: Equity value (70%) = 3.6m€ 2021 Revenues = 7.6m€ EBITDA = 0.8m€ Employees = ~55 • Industrial fitting: Bolt-on acquisition Strong know-how in on-field services and energy savings • Company profile: Sauber is based in Porto Mantovano (Mantua) and is active
Slide 34: M&A – 2022 – Arion
M&A – 2022 – Arion • Key Data: Equity value (30%) = 1.2m€ 2021 Revenues = 2.7m€ 2020 EBITDA = 0.5m€ Employees = 6 • Industrial fitting: Bolt-on acquisition Enabler of digital services Focus on those applications presenting higher growth trends Secure supply-chain in critical • Compan
Slide 35: M&A – 2021 – CFM
M&A – 2021 – CFM • Key Data: Enterprise value (51%) = 23.1m€ 2020 Revenues = 14.5m€ EBITDA = 5.0m€ Employees = ~34 • Industrial fitting: Bolt-on acquisition Footprint expansion outside Western Europe Strong know-how in digital and on- field services • Company profile: a long-standing d
Slide 36: M&A – 2021 – Enginia
M&A – 2021 – Enginia • Key Data: Enterprise value* = 12.4m€ 2020 Revenues = 12.3m€ 2020 EBITDA = 1.5m€ Employees = 46 • Industrial fitting: Bolt-on acquisition Completing CAREL’s product range for AHU Significant synergies with CAREL/Recuperator • Company profile: Enginia has been oper
Slide 37: M&A – 2018 – Recuperator
M&A – 2018 – 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:
Slide 38: M&A – 2018 – HygroMatik
M&A – 2018 – 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 fitti
Slide 39: 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 40: This document and all of its contents are property of CAREL. All unauthorised use,
40 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.