Arbonia Ag · SIX:ARBN
Arbonia — FY2020 Earnings Presentation
43 slides from Arbonia's earnings presentation, March 2021
Slide 1: Annual results 2020
Annual results 2020 Alexander von Witzleben, CEO Daniel Wüest, CFO
Slide 2: 2020 summary
2020 summary Overview key metrics (CHF M), including discontinued operations Net revenues1 EBITDA2 Net debt Capex Free cash flow -1% 9.5% 11.4% 1.4x 0.9x 1′416 1′396 EBITDA Margin Leverage Ratio +18% -22% -15% +527% 159 181 135 141 113 96 53 8 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 Net re
Slide 3: Agenda
Agenda 1. Sale of Windows Division, adapted strategy and structure 2. Group results 2020 3. Market environment and key drivers 4. Strategy 5. Guidance Questions | Annual results 2020 | March 2021 3
Slide 4: Arbonia's 6-year performance: continuous improvement
Arbonia’s 6-year performance: continuous improvement Key figures 2015-2020 (CHF M), including discontinued operations Net revenues CF from operating activities CAGR CAGR 15-20 15-20 +8% +21% 1′246 1′374 1′416 1′396 112 141 941 995 54 69 70 32 Capex 2015 2016 20171 20181 2019 2020 2015 2016 2017 2018
Slide 5: Divestiture Windows Division
Divestiture Windows Division Over CHF 300 M value generation and CHF 350 M cash to strengthen remaining divisions CHF M % • In 2015 the decision was taken to 60 12.5 15 restructure the Windows Division by 40 7.6 10 relocating the production footprint and 3.8 4.4 invest CHF 109 M in capex and 20 2.0
Slide 6: Accelerated growth strategy – Overview
Accelerated growth strategy – Overview Arbonia presents a strong growth strategy, reinforced by mega trends, favorable market outlooks and a strong financial position • Increase share of HVAC systems from currently 30% to 50% of sales relative to HVAC components by HVAC way of accelerated organic gr
Slide 7: Adapted Group structure as of 1 July 2021
Adapted Group structure as of 1 July 2021 Two focused divisions Chairman Alexander von Witzleben CEO Alexander von Witzleben CFO Corporate Functions Daniel Wüest Heating, Ventilation and Air Conditioning (HVAC) Division Doors Division CEO: Alexander Kaiss CEO: Claudius Moor Heating, Ventilation and
Slide 8: Adapted Group structure: two equal financially strong divisions
Adapted Group structure as of 1 July 2021 Two equal financially strong divisions Heating, Ventilation and Doors Air Conditioning (HVAC) Group Heating, Ventilation and Wood solutions Glass solutions Air Conditioning Revenues 1 529.1 509.4 1'038.4 (proforma) 2020 EBITDA 1, 2 59.2 66.1 116.3 Employees
Slide 9: Agenda
Agenda 1. Sale of Windows Division, adapted structure and strategy 2. Group results 2020 3. Market environment and key drivers 4. Strategy 5. Guidance Questions | Annual results 2020 | March 2021 9
Slide 10: Income Statement
Income Statement As reported, continuing operations (excl. Windows) In CHF M 2020 in % 2019 in % I Cost base Net revenues 1’038.4 100.0 1’057.8 100.0 • Improved cost base due I to efficiency gains, Cost of material and goods -454.0 -43.7 -475.2 -44.9 insourcing, FX, material I costs and favourable P
Slide 11: Income Statement without one-time effects
Income Statement Without one-time effects, continuing operations (excl. Windows) In CHF M 2020 in % 2019 in % I Cost base Net revenues 1’038.4 100.0 1’057.8 100.0 • No change compared to I reported figures Cost of material and goods -454.0 -43.7 -473.9 -44.8 I II EBITDA (+6%) Personnel expenses -345
Slide 12: Income Statement with one-time effects
Income Statement With one-time effects, including discontinued operations (Windows) In CHF M 2020 in % 2019 in % I Cost base Net revenues 1’396.3 100.0 1’416.0 100.0 • Improved cost base due I to efficiency gains, Cost of material and goods -600.7 -43.0 -638.3 -45.1 insourcing, FX, material I costs
Slide 13: 2020 summary: Performance by Division
2020 summary Performance by Division, including discontinued operations All figures in CHF M1 Sanitary HVAC Equipment Windows Doors -5% 0% +1% 554.7 529.1 +1% 358.2 357.9 359.4 364.4 Net 143.8 145.0 revenues 2019 2020 2019 2020 2019 2020 2019 2020 +15% +72% +12% 51.6 59.2 +16% 42.4 44.0 49.1 14.7 17
Slide 14: Net revenues by Division and Region
Net revenues by Division and Region Share of Germany further increases after sale of Windows Net revenues by Division Net revenues by Region Including discontinued operations1 Including discontinued operations3 26% 6% 10% 27% 38% 5% 11% 26% 10% 41% Continuing operations2 Continuing operations4 10% (
Slide 15: Organic growth
Organic growth Top-line growth negatively impacted by FX-effects – organic growth mainly driven by price effects Net revenues as reported Δ Currency Organic 2020 2019 continuing operations Year Total effects growth1 in CHF M Arbonia 1′038.4 1′057.8 -1.8% -3.8% +2.0% HVAC 529.1 554.7 -4.6% -4.2% -0.4
Slide 16: Balance sheet
Balance sheet In CHF M, including discontinued operations (Windows) 2′000 1′534 1′515 I Assets 1′500 27.8% • Slightly lower absolute asset base mainly 39.4% due to FX translation effect and amortisation 1′000 of PPA 500 72.2% 60.6% • CHF 283 M of assets allocated to Windows Division and classified a
Slide 17: Net debt as of December 2020
Net debt as of December 2020 In CHF M, including discontinued operations (Windows) 199 200 3x I Net debt 181 • Reduction of net debt by CHF 40 M 60 compared to 12 2019 150 62 141 • Refinancing of syndicated credit facility in 2x Q4 2020 led to more favorable terms and conditions 1.44 1.51 59 • New c
Slide 18: Cash flow statement
Cash flow statement In CHF M, including discontinued operations (Windows) I Cash flow from operating activities +29.5 M • Increase of cash flow from operating activities 150 141.3 reflects better operational performance and … 111.8 • …is additionally reflecting management of 100 NWC 50 21.0 0 12 201
Slide 19: Agenda
Agenda 1. Sale of Windows Division, adapted structure and strategy 2. Group results 2020 3. 3. Market Market environment environment and and key key drivers drivers 4. Strategy 5. Guidance Questions | Annual results 2020 | March 2021 19
Slide 20: Market environment and key drivers
Market environment and key drivers Three additive growth drivers COVID-19 impact "EU Green Deal1" Market environment Increased spending EUR ~250 B to fund for renovation, energetic refurbishment high savings rate through national programmes Low interest rates Non-residential building Mega trends sec
Slide 21: Market environment: Development of relevant construction markets
Market environment Development of relevant construction markets Market environment "Green deal" impact on Germany Insulation (Buildings) Residential Non-residential 11% forecast 2021 forecast 2021 -0.2% 0.9% 39% ⅓ isolation of 21% Heating systems buildings Mobility 1.8% -4.0% (Buildings) -3.5% 0.8%
Slide 22: Construction – Market segments and outlook
Construction – Market segments and outlook Arbonia's main market segments are residential construction and renovation Arbonia's approximate revenue split by segments New construction Health and Education 35% Single-family house Industrial Retail and Renovation Office 65% Multi-family house Hotels Re
Slide 23: Agenda
Agenda 1. Sale of Windows Division, adapted structure and strategy 2. Group results 2020 3. Market environment and key drivers 4. Strategy 5. Guidance Questions | Annual results 2020 | March 2021 23
Slide 24: Group structure as of July 2021
Group structure as of 1 July 2021 Two strong divisions Heating, Ventilation and Doors Air Conditioning (HVAC) Group Heating, Ventilation and Wood solutions Glass solutions Air Conditioning Revenues 1 529.1 509.4 1038.4 (proforma) 2020 EBITDA 1, 2 59.2 66.1 116.3 Employees 2914 2836 5750 1 In CHF M 2
Slide 25: Divisional strategy: HVAC
Divisional strategy Heating, Ventilation and Air Conditioning Increase share of HVAC systems from currently 30% to 50% of sales relative to components by way of accelerated organic growth and supplemented by inorganic growth Offer "plug and play" energy efficient HVAC systems (energy storage, heat p
Slide 26: Divisional strategy: Doors
Divisional strategy Doors Leverage synergies between the Doors Division and former Sanitary Equipment Division by combining sales efforts for project and dealer business, by consolidating procurement and extending joint product portfolio to provide interior wood and glass solutions Wood solutions Gl
Slide 27: ESG-reporting
ESG-reporting Establishing an ESG-reporting system Initial Arbonia ESG report Integrated GRI-compliant ESG-report within annual report as a starting-point for the future Defining goals and strategies Developing a dedicated ESG-reporting system with input from employees, customers, analysts etc. De
Slide 28: ESG-reporting Highlights 2020
ESG-reporting Highlights 2020 Innovative products and solutions CO2 and Energy • The share of new products • With self-produced heat 31.1% 33.5% in relation to all products and energy plus purchased +31% sold has increased by green energy, the share of 21.4% more than 30% renewable energy used (in 1
Slide 29: Agenda
Agenda 1. Sale of Windows Division, adapted structure and strategy 2. Group results 2020 3. Market environment and key drivers 4. Strategy 5. Guidance Questions | Annual results 2020 | March 2021 29
Slide 30: Guidance 2021
Guidance 2021 Heating, Ventilation and Doors Air Conditioning (HVAC) Group Heating, Ventilation and Wood solutions Glass solutions Air Conditioning Organic growth 3.5 – 4.5% >5% 4.0 – 5.0% EBITDA margin >11% >13% >11% Dividend target • 10% annual growth through the cycle • For 2020: Dividend of CHF
Slide 31: Why Arbonia?
Why Arbonia? Digitisation Social and economic trends support Arbonia’s business model: ARBONIA DIGITAL and the Doors • Energy efficiency / Carbon neutrality Division will launch ground-breaking • Urbanisation calculation & configuration software tool • Low interest rate environment Commitment Attrac
Slide 32: Agenda
Agenda 1. Sale of Windows Division, adapted structure and strategy 2. Group results 2020 3. Market environment and key drivers 4. Strategy 5. Guidance Questions | Annual results 2020 | March 2021 32
Slide 33: Disclaimer
Disclaimer Arbonia AG is making great efforts to include accurate and up-to-date information in this document, however we make no representations or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this document and we disclaim any liability whatsoe
Slide 34: Thank you
ARBONIA @ Thank you
Slide 35: Arbonia's transformation 2015-2021
Arbonias transformation 2015-2021 Development Key figures, including discontinued operations AFG in 2015 Arbonia in 20211 Acquisitions 2018 2016 in CHF M H1 2015 2015 2016 2017 2 2018 2 2019 3 2020 3 Net revenue 425.1 941.4 995.3 1'245.6 1'374.0 1'416.0 1'396.3 EBITDA 4 18.2 56.7 66.0 101.3 115.1 13
Slide 36: Arbonia's 6-year EBITDA performance: Divisions
Arbonia’s 6-year EBITDA performance: Divisions Key figures 2015-2020 (CHF M), including discontinued operations HVAC1 Sanitary Equipment2 CAGR CAGR 15-20 15-20 +8% 55 59 60 41 44 46 +12% 14 17 13 15 17 10 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 Windows3 Doors4 CAGR CAGR 15-20 15-
Slide 37: Market environment: Construction market 2021
Market environment Construction market 2021 Residential Non-residential Central Europe Central Europe Germany 2.5 % 2.5 % Germany -6.0% 1.5 % 1.5 % -2.5% Switzerland -0.3 % Switzerland 1.0% 1.0% 0.1 % 0.8% Eastern Europe Eastern Europe Poland -5.5 % Poland -2.4% 3.0 % 6.3% -1.8 % -2.0% Czech Republi
Slide 38: Market environment: Construction market 2022
Market environment Construction market 2022 Residential Non-residential Central Europe Central Europe 0.5% 1.5% Germany -0.5% Germany 1.0% 1.0% Switzerland Switzerland 0.3% 0.5% 0.2% Eastern Europe Eastern Europe 1.5% Poland 4.1% Poland 10.2% 0.9% 4.2% Czech Republic 0.9% Czech Republic 1.7% 4.0% 3.
Slide 39: Energy efficiency / Carbon neutrality: German Climate Protection Concept
Energy efficiency / Carbon neutrality German Climate Protection Concept Old oil and gas kWh/sqm p.a. in m. Modern gas boilers Energy use 8 condensing boilers 200 Residential buildings 160 6 57% 120 34% 4 80 5% 2 40 4% Heat pumps 0 0 Biomass boilers until 1919- 1949- 1979- 1996- 2003- 2010- 1919 1948
Slide 40: European renovation potential
European renovation potential % 100 75.3 % 75 70.8 % 72.0 % 67.7 % 62.1 % 60.9 % 60.8 % 60.6 % 56.1 % 54.1 % 50 37.1 % 24.3 % 26.6 % 25 19.1 % 19.0 % 20.7 % 18.9 % 18.2 % 8.2 % 11.1 % 0 Germany Switzerland Poland Czech Slovakia Italy Spain Belgium Netherlands EU-28 Republic Average Before 1946 Befor
Slide 41: Follow up: German Climate Protection Programme
Follow up: German Climate Protection Programme Renovation1 Type of heating system incl. replacement of oil Rate of subsidies fired boilers biomass or heat pump 35% 45% solar panels 30% renewable energy hybrid systems 35% 45% incl. renewable heat 30% 40% gas-hybrid heating generation system renewable
Slide 42: Management compensation and incentive
Management compensation and incentive Board of Directors Group Management Upper management • Members of the Board of Directors • Members of Arbonia’s Group • Members of Arbonia’s upper receive a base compensation as Management receive a individual management receive a individual well as additional c
Slide 43: Arbonia shareholder structure
Arbonia shareholder structure As of 31 December 2020 Free float market capitalisation: CHF 686 M3 22% 3% 3% 2% 70% Free float1 Artemis Beteiligungen I AG M&G plc Leo Looser Arbonia management2 Tradeable free float of ~70% 1 Every other shareholder with <3% of shares outstanding 2 Members of the Boar