Sit S.p.a. · MIL:SIT
Sit — FY2018 Earnings Presentation
39 slides from Sit's earnings presentation, April 2019
Slide 1: Company presentation and 2018FY results
Company presentation and 2018FY results April 2019
Slide 2: Disclaimer
Disclaimer • This presentation has been prepared by SIT S.p.A. only for information purposes and for the presentation of the Group’s results and strategies. • For further details on the SIT Group, reference should be made to publicly available information. • Statements contained in this presentation
Slide 3: Table of contents
Table of contents • SIT overview • Heating business description • Smart Gas Metering business description • Sales coverage and manufacturing footprint • Key financials and shareholder base • 2018FY results 3
Slide 4: SIT at a glance
SIT at a glance Organic growth in revenues and margins 2018FY Revenues: 359,7€ (+11,0%) 2013FY - 2018FY Revenues: CAGR 7,9% 2018FY EBITDA adjusted*: 50,6€ (+9,1%) 2018FY Net income adjusted*: 19,6€ (+32,3%) 2013FY - 2018FY EBITDA adjusted*: CAGR 7,2% Market and technological leadership A
Slide 5: SIT develops and manufactures measuring devices and systems for domestic gas equipment
SIT develops and manufactures measuring devices and systems for the safety, comfort and performance of domestic gas equipment Heating Smart Gas Metering Mechanical Electronic Integrated Flue Exhaust Sensors Controls Controls Systems Fans Systems Gas meters DOMESTIC SMART GRIDS Fireplaces APPLIANCES
Slide 6: Milestones in SIT history
Milestones in SIT history 1953: Established by Pierluigi and Giancarlo de’ Stefani 1964 – 1997: international expansion • 1964, first mechanical control exported to Germany 2009 – 2016: Smart Gas Metering from scratch • 1974, first foreign European subsidiary in the Netherlands • 2009, a joint ventu
Slide 7: SIT currently operates two business divisions
SIT currently operates two business divisions Heating Smart Gas Metering 2018 sales: 287,0 € 2018 sales : 72,1 € (79,9%) (20,1%) Components and systems for the control, regulation A new generation of intelligent remotely controlled and safety of gas appliances for domestic heating, static gas meters
Slide 8: Main customers
Main customers Heating Smart Gas Metering 8
Slide 9: Table of contents
Table of contents • SIT overview • Heating business description • Smart Gas Metering business description • Sales coverage and manufacturing footprint • Key financials and shareholder base • 2018FY results 9
Slide 10: Central Heating: boilers combining heating and domestic hot water
Central Heating: boilers combining heating and domestic hot water SIT is the world’s top name in the production of multifunctional, regulating, safety gas valves. SIT is the main player for the non captive electronic controls market Innovative solutions for sub-assembled and pre- Air management tech
Slide 11: Direct heating: fireplaces and stoves (both gas and pellet)
Direct heating: fireplaces and stoves (both gas and pellet) • SIT provides mechanical controls (gas valves and sensors), electronic controls (main boards, remote controls and user interfaces) and fans for gas fireplaces, stoves and spaceheaters • Main markets are North America, UK and Europe 11
Slide 12: Storage Water Heating for domestic water heating
Storage Water Heating for domestic water heating SIT provides mechanical controls and pilots • Markets include North America, Argentina and Australia • New efficiency standards and electronic features have been recently introduced in the US market providing opportunities to increase technological co
Slide 13: Professional cooking and catering appliances
Professional cooking and catering appliances • SIT provides mechanical controls and fans for (i) collective and community cooking appliances and (ii) high end cooker hoods • Main markets are Europe and USA • SIT is market leader in Europe 13
Slide 14: Heating business division – market segments and products
Heating business division – market segments and products SIT operates significantly in the following market segments: Current product families include: • Central Heating, boilers for domestic and water • Mechanical controls, multifunctional safety valves for gas heating • Electronic controls, mainbo
Slide 15: Heating business division – strong competitive position
Heating business division – strong competitive position Mechanical controls Electronic controls • 34,4% of Divisional revenues • 10,6% of Divisional revenues Central Heating • Market share ~50% • Market share ~14% (excluding captive • #1 globally production) • 10,7% of Divisional revenues • 4,0% Div
Slide 16: Table of contents
Table of contents • SIT overview • Heating business description • Smart Gas Metering business description • Sales coverage and manufacturing footprint • Key financials and shareholder base • 2018FY results 16
Slide 17: Smart Gas Metering - driven by regulation and smart technology
Smart Gas Metering - driven by regulation and smart technology • European directive on smart gas metering (EU 2009/73) • Italy: early adopter with directive ARG/gas155/08 issued by the national Authority (AEEG) • European installed base over 120 million pcs • Innovative thermo-flow sensor technology
Slide 18: Smart Gas Metering - driven by regulation and smart technology
Smart Gas Metering - driven by regulation and smart technology Attractive business opportunity RESIDENTIAL • The mission of MeteRSit , wholly owned subsidiary, is to offer to SMART GAS METERS gas distribution companies a new generation of highly innovative, (from 4 to 10 m³ph flow) electronic, remot
Slide 19: Smart Gas Metering – market size provides growth potential
Smart Gas Metering – market size provides growth potential European Gas Meter installation base is To current date main European countries are in different over 120 million units stages of massive residential meters roll-out plans • UK: regulatory framework (SMET2) requires to complete replacement o
Slide 20: Table of contents
Table of contents • SIT overview • Heating business description • Smart Gas Metering business description • Sales coverage and manufacturing footprint • Key financials and shareholder base • 2018FY results 20
Slide 21: Global coverage of sales organization
Global coverage of sales organization Arnsberg, GERMANIA Production Randers, DANIMARCA Brno, REP. CECA plant Hoogeveen, OLANDA Budapest, UNGHERIA Sales office Brasov, ROMANIA Moscow, RUSSIA Agent Rovigo Artemovsk, UCRAINA Seoul, COREA Milano Suzhou, CINA Los Angeles, CALIFORNIA Padova: HEADQUARTERS
Slide 22: Manufacturing facilities based on local for local continental platforms
Manufacturing facilities based on local for local continental platforms Rovigo 1, Italy Mechanical controls, Integrated systems, Sensors, Smart Gas Meters Rovigo 2 Captive aluminum die casting and machining High volumes automated assembly lines Brasov, Romania Mechanical controls, Integrated
Slide 23: High quality standards and certifications
High quality standards and certifications All plants comply with 2016 - Padova (Italy) – Testing Laboratory – CSA certificate of Quality System Certification qualification ISO 9001:2000 2015 - Suzhou (China) plant - CGAC Manufacturing plant recognition 2013 - Suzhou (China) plant - Quality System Ce
Slide 24: Table of contents
Table of contents • SIT overview • Heating business description • Smart Gas Metering business description • Sales coverage and manufacturing footprint • Key financials and shareholder base • 2018FY results 24
Slide 25: Key financials
Key financials EBITDA Adjusted* Revenues CAGR 359,7 60 EBITDA Adjusted Margin 16 7,9% 14,3% 13,3% 50,6 324,0 14,5% 15,5% 14 50 46,3 288,1 44,6 14,1% 13,3% 12 259,0 264,7 40 246,1 35,6 34,3 35,3 10 30 8 6 20 4 10 2 0 0 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 39,9 158,5 156,5 Net d
Slide 26: Change in 2014 net debt was due to LBO
Change in 2014 net debt was due to LBO Federico • In 2014 Federico de Stefani, acquired the 56,7% of SIT shares de’ Stefani from other shareholders via LBO transaction using the 100% 100 % owned Newco SIT Technologies • Equity value of the transaction was 116€ SIT Technologies New Debt for • Funding
Slide 27: Shareholder base
Shareholder base Federico de’ Stefani 0,43% 100 % 30,01% SIT Technologies Market 72,27 % 69,56% 27,26 % SIT spa SIT Tech Market Treasury Shares Shareholder structure as of April 7, 2019 Fully diluted scenario: • SIT Spa owns 0,47% of Treasury Shares • Conversion of all n. 5.224.733 Warrants at €13.0
Slide 28: Table of contents
Table of contents • SIT overview • Heating business description • Smart Gas Metering business description • Sales coverage and manufacturing footprint • Key financials and shareholder base • 2018FY results 28
Slide 29: 2018FY - Key financial results
2018FY - Key financial results (Euro million) 2018FY % 2017FY % diff% • Revenue growth of 11,0% is all organic: Revenues 359,7 100,0% 324,0 100,0% 11,0% - Heating, +13,0€ +4,7% (1) - Smart Gas Metering ,+22,7€ +45,9% EBITDA Adjusted 50,6 14,1% 46,3 14,3% 9,1% EBITDA 43,8 12,2% 44,1 13,6% -0,6% • Rev
Slide 30: 2018FY - Sales bridge
2018FY - Sales bridge Euro million 3,4 3,1 359,7 42,2 324,0 2017FY Vol/Mix Prices Forex 2018FY 30
Slide 31: 2018FY - Revenue breakdown by Division and geography
2018FY - Revenue breakdown by Division and geography Divisional sales Euro million 2018FY % 2017FY % diff % Heating 287,0 79,8% 274,0 84,6% 4,7% Smart Gas Metering 72,1 20,1% 49,5 15,3% 45,9% Total product sales 359,1 99,8% 323,5 99,8% 11,0% Other revenues 0,5 0,2% 0,5 0,2% 7,6% Total revenues 359,7
Slide 32: 2018FY - Heating sales growth driven by Europe and America
2018FY - Heating sales growth driven by Europe and America Heating business sales by application Euro million 2018FY % 2017FY % diff % Central Heating 178,4 62,7% 177,8 65,3% 0,3% Direct Heating 51,6 18,1% 50,0 18,4% 3,2% Storage Water Heating 22,0 7,7% 17,3 6,4% 26,7% Catering 10,9 3,8% 11,0 4,0% (
Slide 33: 2018FY - Smart Gas Metering confirms growth trend
2018FY - Smart Gas Metering confirms growth trend Smart Gas Metering business sales by application Euro million 2018FY % 2017FY % diff % Residential 70,0 97,2% 46,5 94,1% 50,6% Commercial & Industrial 1,8 2,6% 2,8 5,6% (33,5%) Other 0,2 0,2% 0,1 0,3% 24,6% Total business sales 72,0 100% 49,4 100% 45
Slide 34: 2018FY – EBITDA Adjusted bridge
2018FY – EBITDA Adjusted bridge Price effect on sales Euro million Raw materials adjustments on purchase contracts and other increase in cost of materials Shortage and other market effects -3,4 2,4 -0,1 -0,7 9,8 -2,2 50,6 -5,6 -1,5 46,3 EBITDA Adj Vol/Mix Prices, net External Operations Forex, net O
Slide 35: 2018FY – Financial income and charges
2018FY – Financial income and charges Euro million 2018FY 2017FY diff Financial charges - Reported 4,8 49,8 • Adjustments to Financial charges Fair value accounting effect of SPAC merger - 31,3 relate to 2017 fair value accounting of One off charges due to 2017 refinancing - 9,5 SPAC merger and one
Slide 36: 2018FY – Net income Adjusted
2018FY – Net income Adjusted Euro million 2018FY 2017FY diff Net income - Reported 24,3 (23,3) 47,6 • Net income is adjusted for non EBITDA Adjustments 6,8 2,3 recurring operating and financial Managing Director severance costs 2,7 - items, net of tax effect 2017 AIM listing and 2018 translisting to
Slide 37: 2018FY – Net trade working capital
2018FY – Net trade working capital Euro million 2018 2017 diff Inventory 52,2 38,1 14,1 Accounts receivables 52,0 52,1 (0,1) Accounts payables 74,8 68,4 6,4 Net Trade Working Capital - Reported 29,5 21,9 7,6 NTWC / Revenues 8,2% 6,8% 1,4% Non recourse factoring 13,1 9,1 4,0 Capex accounts payables 8
Slide 38: 2018FY – Cash flow statement
2018FY – Cash flow statement Euro million 2018FY 2017FY • 2018FY accelerated capex plan was deployed to increase Current cash flow 48,1 48,1 production capacity by approx 30% and remove Change in net working capital (15,1) (6,5) manufacturing bottlenecks on high runners Inventory (14,2) 0,4 Accounts
Slide 39: Regulatory statement
Regulatory statement Regulatory statement The manager responsible for the preparation of the company's accounts, Paul Fogolin, hereby declares, as per article 154-bis, paragraph 2, of the "Testo Unico della Finanza", that all information related to the company's accounts contained in this presentati