Dometic Group Ab · OMXSTO:DOM
Dometic Group Ab — Q2 2022 Earnings Presentation
37 slides from Dometic Group Ab's earnings presentation, Jul 15, 2022
Slide 1: Interim Presentation Q2 2022
INTERIM PRESENTATION Q2 2022 July 15, 2022
Slide 2: Juan Vargues, President & CEO
JUAN VARGUES PRESIDENT & CEO
Slide 3: Q2 2022 Highlights
Q2 2022 HIGHLIGHTS Market development ▪ Challenging macroeconomic environment and weakening demand ▪ Retailers are rebalancing their inventories ▪ Order backlog above last year Performance ▪ 53% sales growth, -1% organic ▪ Strong growth in OEM, Igloo and Mobile Power Solutions ▪ EBITA margin before
Slide 4: Q2 2022 Financial Summary
Q2 2022 FINANCIAL SUMMARY +28% Net sales of SEK 8,498 m, +53% total growth +53% ▪ -1% organic 8,498 ▪ 11% FX ▪ 43% M&A EBITA before i.a.c. of SEK 1,330 m, +28% 5,571 ▪ EBITA margin of 15.7% (18.6%) Adjusted EPS of SEK 2.97, +36% Operating cash flow of SEK 738 m (875) 1,330 1,037 Leverage 2.9x (1.4x)
Slide 5: YTD June 2022 Financial Summary
YTD JUNE 2022 FINANCIAL SUMMARY +33% Net sales of SEK 16,016 m, +54% total growth +54% ▪ 3% organic 16,016 ▪ 7% FX ▪ 44% M&A EBITA before i.a.c. of SEK 2,444 m, +33% 10,428 ▪ EBITA margin of 15.3% (17.6%) Adjusted EPS of SEK 5.25, +30% Operating cash flow of SEK 339 m (857) 2,444 1,837 YTD June 2021
Slide 6: Sales Growth Q2 2022
SALES GROWTH Q2 2022 Total growth SEKm Q2 2022 80% 28,000 Net Sales SEK 8,498 m 27,000 26,000 ▪ Total growth SEK 2,927 m (+53%) 60% 25,000 ▪ Americas +35% 40% 24,000 ▪ EMEA +13% 23,000 ▪ APAC +12% 22,000 20% 21,000 ▪ Marine +23% 20,000 ▪ Global +935% 19,000 0% 18,000 ▪ Organic growth -1% 17,000 -20%
Slide 7: Application Areas Q2 2022
APPLICATION AREAS Q2 2022 Climate +12% Food & Beverage SALES SPLIT YTD, R12 Quarter R12 +115% Quarter APPLICATION AREA 9,000 2,409 2,500 4,000 10,000 3,533 8,500 2,000 3,500 10% 9,000 3,000 8,000 30% 1,500 8,000 2,500 7,500 2,000 20% 1,000 7,000 7,000 1,500 6,000 500 1,000 6,500 5,000 500 6,000 0 0
Slide 8: Sales Channels Q2 2022
SALES CHANNELS Q2 2022 SERVICE AND AFTERMARKET SALES SPLIT YTD, R12 +5% Quarter SALES CHANNEL 8,500 2,241 2,500 8,000 2,000 7,500 7,000 1,500 31% 6,500 6,000 1,000 42% 5,500 500 5,000 4,500 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2020 2021 2022 27% OEM +30% DISTRIBUTION (Prev Year) Quarter R12 +259% Quarter R1
Slide 9: Sales Channel Development
SALES CHANNEL DEVELOPMENT DISTRIBUTION + SERVICE & AFTERMARKET FROM 52% TO 59% IN ONE YEAR NET SALES, SEK m 9,000 8,498 ▪ RV OEM now accounts for less than 8,000 1/4 of Group sales 33% ▪ M&A and divestment agenda supports 7,000 continued transformation 6,000 5,571 5,000 14% 26% 4,000 38% 3,000 CPV O
Slide 10: EBITA and EBITA Margin Before i.a.c.
EBITA AND EBITA MARGIN BEFORE I.A.C EBITA Run rate +14.6% (+16.4%) EBITA- SEKm margin Q2 2022 +28% 1,350 17% EBITA margin 15.7% (18.6%) 1,200 ‒ Igloo margins lower than Group average 16% 1,050 ‒ Channel mix having major effect 900 15% ‒ Logistic cost 14% ‒ Inefficiencies caused by supply 750 constra
Slide 11: Sales and EBITA Development 2017-2022
SALES AND EBITA DEVELOPMENT 2017 - 2022 SEK M Net sales EBITA before i.a.c. +SEK 4,549 m +SEK 663 m +115% +99% 8,498 1,330 1,037 973 974 5,571 5,260 5,329 3,949 667 3,329 438 2017 Q2 2018 Q2 2019 Q2 2020 Q2 2021 Q2 2022 Q2 2017 Q2 2018 Q2 2019 Q2 2020 Q2 2021 Q2 2022 Q2
Slide 12: Segment Americas Q2 2022
SEGMENT AMERICAS Q2 2022 Net sales SEK 1,944 m, +35% ▪ Flat organic growth ▪ Strong growth in OEM ▪ Service & Aftermarket declined compared to a strong 2021 as retailers are rebalancing inventory levels Net sales and EBITA margin before i.a.c. 2,000 9% 1,800 8% EBITA before i.a.c. SEK 160 m (128) 1,
Slide 13: Segment EMEA Q2 2022
SEGMENT EMEA Q2 2022 Net sales SEK 2,319 m, +13% ▪ Organic growth -6% ▪ Growth in OEM but low RV OEM – lack of chassis and components at customers ▪ Decline in Service & Aftermarket as retailers are rebalancing inventory levels Net sales and EBITA margin before i.a.c. ▪ Strong development in acquire
Slide 14: Segment APAC Q2 2022
SEGMENT APAC Q2 2022 Net sales SEK 524 m, +12% ▪ Organic growth -10% compared to a strong Q2 2021 ▪ Negative growth in RV OEM – lack of chassis and components at customers ▪ Strong momentum in Mobile Power Solutions Net sales and EBITA margin before i.a.c. 550 35% 500 EBITA before i.a.c. SEK 136 m (
Slide 15: Segment Marine Q2 2022
SEGMENT MARINE Q2 2022 Net sales SEK 1,750 m, +23% ▪ Organic growth +5% driven by OEM ▪ Backlog higher than last year EBITA before i.a.c. SEK 485 m (390) ▪ EBITA Margin 27.7% (27.3%) Net sales and EBITA margin before i.a.c. 1,800 30% ▪ Positive effects from sales growth partly offset 1,600 25% by ne
Slide 16: Segment Global Q2 2022
SEGMENT GLOBAL Q2 2022 Net sales SEK 1,962 m, +935% ▪ Organic growth +29% driven by Hospitality and Residential ▪ Igloo reports strong growth (proforma) EBITA before i.a.c. SEK 197 m (29) ▪ EBITA Margin 10.0% (15.0%). Igloo has dilutive impact Net sales and EBITA margin before i.a.c. 2,000 20% on se
Slide 17: E-Commerce – DTC
E-COMMERCE – DTC Activities Net sales, SEK m ▪ Global platform implemented in US, Australia Distribution and Service & Aftermarket Of which and Marine driving organic growth DTC 5% 10,000 ▪ Ongoing implementation in eight countries in 9,000 Europe 8,000 ▪ Broadened Outdoor offering 7,000 ▪ Know-how
Slide 18: First Store-in-Store in Stockholm
FIRST STORE-IN-STORE IN STOCKHOLM NEW DISTRIBUTION CHANNEL ▪ First store-in-store at Outdoor brand shop in Sweden ▪ Located at Haglöfs flagship store in central Stockholm ▪ Showcasing Dometic Outdoor lifestyle product range ▪ Selected products are available in all Haglöfs brand shops nationwide in S
Slide 19: Outstanding Industrial Design
OUTSTANDING INDUSTRIAL DESIGN TWO OF THE WORLD’S LEADING DESIGN AWARDS RECOGNIZED DOMETIC INNOVATIONS Dometic Dometic DeliBox Smart Delivery Box ▪ Hot/Cold, ▪ A secure mailbox and temperature- smart receiving box controlled with refrigeration transportation solution capability for food delivery Dome
Slide 20: Accelerated Cost Reductions
ACCELERATED COST REDUCTIONS ▪ Restructuring program announced 2019 ▪ SEK 400 m in total savings ▪ Runrate saving as of Q2 2022 SEK 250 m ▪ Final activity announced July 6 ▪ Closure of manufacturing in Siegen, Germany. To be completed by mid 2023 ▪ 24 locations and 1,201 employees affected since star
Slide 21: 2022 Strategy Execution
2022 STRATEGY EXECUTION 1▪ Profitable expansion ▪ Distribution and Service & Aftermarket share of sales 59% (52%) ▪ Continued strong growth in Mobile Power solutions. Total sales last 12 months more than SEK 2.2 b (proforma) 2▪ Product leadership ▪ Innovation index 17% (24%) - component supply issue
Slide 22: Sustainability
SUSTAINABILITY ▪ LTIFR1) reduced 42% compared to the same period last year KPI Focus area Actual 2024 Target LTIFR1) People 1.6 <2.0 ▪ Implementation of Health & Safety guidelines continues Share of female managers People 24% 27% CO2 tonne / Net sales SEK m Planet -31% -30% ▪ Share of female manager
Slide 23: Stefan Fristedt, CFO
STEFAN FRISTEDT CFO
Slide 24: EBITA Development
EBITA DEVELOPMENT ▪ Asset gain Q2 2021 ▪ Q2 2021 positively impacted by sale of fixed assets in APAC of SEK 21 m ▪ Organic + FX EBITA bef i.a.c. SEK m (% of sales) + Currency translation and transaction effects SEK 1,330 m ‒ Sales channel and segment mix 1,400 (15.7%) ‒ Inefficiencies due to supply
Slide 25: Cash Flow for the Period
CASH FLOW FOR THE PERIOD SEK m Q2 2022 Q2 2021 EBIT 1,166 898 ▪ Operating cash flow SEK 738 m (875) Adjustments for non-cash items 563 136 ▪ Adjustments for non-cash items relates to Changes in Working Capital -876 -79 Depreciation, Amortization and FX Investments in fixed assets -114 -80 ▪ Working
Slide 26: Operating Cash Flow
OPERATING CASH FLOW SEK m 1,600 210% 1,400 180% 1,200 150% 1,000 373 120% 800 90% 600 60% 400 30% 200 0 0% -200 -30% -400 -60% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 Operating cash flow Cash conversion
Slide 27: Working Capital Days
WORKING CAPITAL DAYS Increase driven by inventories ACCOUNTS PAYABLES ACCOUNTS RECEIVABLES Inventory balance SEK 9.5 b (4.4), 90 70 drivers behind increase: 80 60 70 ▪ Acquisitions SEK 1.5 b 60 50 50 63 46 ▪ FX SEK 1.3 b 40 40 ▪ Increased raw material prices 30 30 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4
Slide 28: Capex & Research & Development
CAPEX & RESEARCH & DEVELOPMENT (SEK m, % of Net sales) CAPEX 200 8 ▪ Q2 2022 CAPEX: 150 6 1.3% of net sales 1.4% 1.3% (1.4% same period 2021) 100 4 1.3% 152 50 95 111 111 2 72 77 77 38 48 0 0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 2021 Q1 Q2 2022 2020 2020 2020 2021 2021 2021 2022 R&D 1.7% 150 6 ▪ Q2 2022 R&D: 125 1
Slide 29: Debt Maturity Profile and Leverage
DEBT MATURITY PROFILE AND LEVERAGE Debt maturity profile, SEK m USD loans EUR bonds EKN loan SEK bond ▪ Well diversified profile 1.000 ▪ Average maturity 3,3 years 2.000 ▪ Three-year private placement bond of SEK 3.213 3.423 3.213 3.212 1 b at a rate of 5.1% signed in the quarter 2.158 ▪ Undrawn rev
Slide 30: 2019 Restructuring Program
2019 RESTRUCTURING PROGRAM SAVING TO BE FULLY REALIZED BY MID 2023 ▪ Locations and employees ▪ Announced closure of manufacturing in Siegen, Germany. Final activity in the 2019 program. Totally 24 locations have been impacted since start ▪ 243 employees affected in the quarter. 1,201 since start ▪ S
Slide 31: 2022 Restructuring Program
2022 RESTRUCTURING PROGRAM Additional ▪ The next step in our efficiency plan to further accelerate operational optimization annual saving of and improve profitability SEK 200 m ▪ Scope ▪ Continued optimization of locations and rightsizing of resources ▪ Across all segments and functions ▪ 700 employ
Slide 32: Historical Resilience in a Downturn Scenario
HISTORICAL RESILIANCE IN A DOWNTURN SCENARIO PAST RESULTS SHOWS RESILIENCE LEVERS TO PULL 25.0 Covid-19 Outbreak 30.0% RV US 1H sales -27% production -16% 25.0% ▪ Continuous scenario planning Net sales SEK b. 20.0 15.0 1.4% 0.9% 20.0% ▪ Recent experiences of downturns 1.2% 15.0% 10.0 ▪ Accelerating
Slide 33: Further Resilience from Acquired Companies
FURTHER RESILIENCE FROM ACQUIRED COMPANIES Improved sales mix Structural growth areas Igloo resilience Igloo net sales, USD m 500 400 300 200 100 0 OEM Service & Aftermarket Distribution >85% of net sales outside OEM 6 acquisitions in 2021-2022 in Mobile Low single digit sales growth during Power So
Slide 34: Q2 Summary
Q2 SUMMARY Business highlights ▪ 53% sales growth and backlog higher than a year ago ▪ Market conditions turning tougher ▪ Declining OEM production ▪ Retailers are rebalancing their inventories ▪ Challenging macroeconomic environment and weakening demand ▪ Positive development of acquired companies
Slide 35: Dometic
“> DOMETIC
Slide 36: Disclaimer
DISCLAIMER SOME STATEMENTS HEREIN ARE FORWARD-LOOKING AND THE ACTUAL OUTCOME COULD BE MATERIALLY DIFFERENT. IN ADDITION TO THE FACTORS EXPLICITLY COMMENTED UPON, THE ACTUAL OUTCOME COULD BE MATERIALLY AFFECTED BY OTHER FACTORS, (A) CHANGES IN ECONOMIC, MARKET AND COMPETITIVE CONDITIONS, (B) SUCCESS
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