Investor Presentation • Mar 22, 2022
Investor Presentation
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www.sabafgroup.com
Milan, 22nd – 24th March 2022
Microswitches & Accessories
Ovens
Total Group employees at 28 February 2022 1,508
SABAF S.P.A. Valves and thermostats Standard burners
Special burners 592 employees
ARC S.R.L. Professional burners 23 employees
FARINGOSI-HINGES S.R.L. Oven hinges Dishwasher hinges 57 employees
Oven hinges Dishwasher hinges 172 employees
SABAF MESSICO Burners and hinges
SOP - Q4 2022
SABAF DO BRASIL LTDA Standard burners Special burners 118 employees
CMI POLAND
Dishwasher hinges 60 employees
SABAF TURKEY Burners, valves, hinges and electronics 248 employees
OKIDA ELEKTRONIK Electronics for household appliances 227 employees
SABAF APPLIANCE COMPONENTS (KUNSHAN) Wok bruners 11 employees
ARC HANDAN JV Professional wok burners
SABAF INDIA Valves and Burners
SOP - H1 2022
Global leader in the segment of components for domestic appliances with 400 customers in 64 different countries:
Weight of top 10 customers on total Group sales is 48%
No customer represents more than 11% of total Group sales
Long -term agreements and strong relationships with all the main players in the household appliances business, based on mutual trust, technical cooperation, co -engineering and tailor -made products
Intellectual capital: highly specialized and qualified staff (70+ R&D engineers)
Pietro Iotti, CEO of Sabaf, owns 1.5%
| Sabaf performance (Change) |
Consensus Overview |
Consensus Mar. 22nd, 2022 | Source Bloomberg | |
|---|---|---|---|---|
| 1-month (%) | + 0.96% | FY 2022E | FY 2023E | |
| 3-month (%) | - 9.05% |
Price/EPS | 8.89 | 8.06 |
| 6-month (%) | - 10.59% |
EV/EBITDA | 5.78 | 5.42 |
| 12-month (%) | + 4.98% | EV/EBIT | 8.43 | 7.80 |
(Total of 1,508 employees at 28.02.2022)
| € x 000 |
MONTHS 12 |
2021 | MONTHS 12 |
2020 | % Δ 21 - 20 |
|---|---|---|---|---|---|
| 0% | 4% | ||||
| Revenue | 263 259 , |
0% 100 |
184 906 , |
100 | +42 |
| Other income |
8 661 , |
0% 100 |
7 194 , |
9% 3 |
|
| Total operatig and income revenue |
271 920 , |
192 100 , |
|||
| Materials | (142 355) , |
(54 1%) |
(82 966) , |
(44 9%) |
|
| Personnel costs |
(53 964) , |
(20 5%) |
(43 700) , |
(23 6%) |
|
| Change in inventories |
29 922 , |
11 4% |
6 406 , |
3 5% |
|
| Other operating costs |
(51 383) , |
(19 5%) |
(34 743) , |
(18 8%) |
|
| EBITDA | 54 140 , |
6% 20 |
37 097 , |
1% 20 |
9% +45 |
| Depreciation | (16 869) , |
(6 4%) |
(16 968) , |
(9 2%) |
|
| Gains/losses fixed assets on |
237 | 1% 0 |
105 | 1% 0 |
|
| Write-downs/write-backs of non-current assets |
- | 0% 0 |
(141) | (0 1%) |
|
| EBIT | 37 508 , |
14 2% |
20 093 , |
9% 10 |
7% +86 |
| Net financial expense |
(429) | (0 2%) |
(780) | (0 4%) |
|
| Exchange gains and losses rate |
(7 399) , |
(2 8%) |
(4 812) , |
(2 6%) |
|
| Profits and losses from equity investments |
- | 0 0% |
8 | 0 0% |
|
| EBT | 29 680 , |
3% 11 |
14 509 , |
8% 7 |
6% +104 |
| Income taxes |
(5 003) , |
(1 9%) |
(149) | (0 1%) |
|
| PROFIT FOR THE YEAR |
24 677 , |
4% 9 |
14 360 , |
8% 7 |
8% +71 |
| Minority interests |
780 | 0 3% |
(399) | (0 2%) |
|
| PROFIT ATTRIBUTABLE TO GROUP THE |
23 897 , |
1% 9 |
13 961 , |
6% 7 |
2% +71 |
| Revenue 0% 0% 1% 62 487 100 59 461 100 +5 , , Other income 3% 0% 2 682 4 4 158 7 , , Total operatig and income 3% 0% 65 169 104 63 619 107 revenue , , Materials (33 168) (53 1%) (26 528) (44 6%) , , Personnel (13 042) (20 9%) (13 215) (22 2%) costs , , Change in inventories 7% 6% 4 794 7 2 712 4 , , Other operating (13 782) (22 1%) (12 363) (20 8%) costs , , EBITDA 0% 9% 9% 9 971 16 14 225 23 -29 , , Depreciation (4 151) (6 6%) (4 263) (7 2%) , , Gains/losses fixed 111 45 0 2% 0 1% assets on Write-downs/write-backs of 0% (0 2%) 0 non-current assets (141) - EBIT 5% 6% 9% 5 931 9 9 866 16 -39 , , financial Net (340) (0 5%) (1 239) (2 1%) expense , Exchange gains and losses (6 132) (9 8%) 0% rate 29 0 , Profits and losses from equity investments 1% 1% 38 0 39 0 EBT (503) -0 8% 8 695 14 6% -105 8% , Income 8% 0% taxes 1 123 1 1 200 2 , , PROFIT FOR THE YEAR 620 1 0% 9 895 16 6% -93 7% , Minority interests (14) 0 0% (179) (0 3%) |
€ x 000 |
IV QUARTER |
IV QUARTER |
2020 | % Δ 21 - 20 |
|
|---|---|---|---|---|---|---|
| , | PROFIT TO GROUP ATTRIBUTABLE THE |
634 | 0% 1 |
9 716 |
3% 16 |
5% -93 |
| € x 000 |
12 MONTHS 2021 |
12 MONTHS 2020 |
Δ % 21 20 vs. |
|---|---|---|---|
| Europe | 92 | 69 | +33 |
| (excluding | 935 | 618 | 5% |
| Turkey) | , | , | |
| Turkey | 65 | 44 | +46 |
| 526 | 806 | 2% | |
| , | , | ||
| North America |
30 472 , |
22 700 , |
+34 2% |
| South America |
39 589 , |
27 639 , |
+43 2% |
| Africa and Middle East |
19 614 , |
12 177 , |
1% +61 |
| and | 15 | 7 | 8% |
| Oceania | 123 | 966 | +89 |
| Asia | , | , | |
| Total | 263 | 184 | 4% |
| 259 | 906 | +42 | |
| , | , |
| € 000 x |
MONTHS 12 2021 |
MONTHS 12 2020 |
% Δ 21 20 vs. |
|---|---|---|---|
| Gas | 182 | 129 | 5% |
| 468 | 834 | +40 | |
| , | , | ||
| Hinges | 58 | 41 | +41 |
| 375 | 326 | 3% | |
| , | , | ||
| Electronics | 22 | 13 | 1% |
| 416 | 746 | +63 | |
| , | , | ||
| Total | 263 | 184 | +42 |
| 259 | 906 | 4% | |
| , | , |
| E-MARKET SDIR |
|---|
| CERTIFIED |
| € 000 x |
31/12/2021 | 30/09/2021 | 31/12/2020 |
|---|---|---|---|
| Fixed assets |
130 093 , |
136 489 , |
131 543 , |
| Inventories | 64 153 , |
63 404 , |
39 224 , |
| Trade receivables |
68 040 , |
688 75 , |
63 436 , |
| receivables Tax |
6 165 , |
3 821 , |
2 419 , |
| Other receivables current |
3 136 , |
2 530 , |
3 167 , |
| Trade payables |
(54 837) , |
(49 104) , |
(41 773) , |
| payables Tax |
(4 951) , |
(5 504) , |
(3 287) , |
| Other payables |
(13 075) , |
(12 478) , |
(10 957) , |
| Net working capital |
68 631 , |
78 357 , |
52 229 , |
| Provisions for risks and severance indemnity |
(8 681) , |
(8 733) , |
(9 643) , |
| Capital Employed |
190 043 , |
206 113 , |
174 129 , |
| Equity debt Net |
122 436 , 67 607 , |
132 572 , 73 541 , |
117 807 , 56 322 , |
| Sources of finance |
190 043 , |
206 113 , |
174 129 , |
| € 000 x |
MONTHS 12 2021 |
MONTHS 9 2021 |
MONTHS 12 2020 |
|
|---|---|---|---|---|
| Cash the beginning of the period at |
13 318 , |
13 318 , |
18 687 , |
|
| profit Net Depreciation Other income adjustments statement |
24 683 , 16 869 , 5 810 , |
24 057 , 12 718 , 6 011 , |
14 360 , 16 968 , 1 873 , - |
|
| Change in working capital net - Change in inventories - Change in receivables - Change payables in |
(24 929) , (4 604) , 13 064 , (16 469) , |
(24 180) , (12 252) , 331 7 , (29 101) , |
(3 881) , (16 507) , 14 213 , (6 175) , - |
|
| Other changes in operating items Operating cash flow |
(7 677) , 23 216 , |
(3 898) , 9 787 , |
(1 959) , 25 067 , |
|
| of disposals Investments , net Cash Flow Free |
(23 752) , (536) |
(19 501) , (9 714) , |
(17 296) , 771 7 , |
|
| Cash flow from financial activity Own shares buyback Dividends CMI and ARC acquisitions Forex |
47 405 , - (6 172) , (6 296) , (4 070) , |
18 138 , - (6 172) , - (257) |
(2 136) , (2 073) , (3 924) , (3 063) , (1 944) , - |
Capital growth |
| financial flow Net Cash the end of the period at |
30 331 , 43 649 , |
1 995 , 15 313 , |
(5 369) , 13 318 , |
Strong acceleration in the first half of the year, which was necessary to adapt production capacity to higher-than-expected demand. Key investments were made in Turkey, in India and in Mexico
| 12 MONTHS 2021 | 12 MONTHS 2020 | |
|---|---|---|
| Change in turnover (vs. previous year) |
+42.4% | +18.6% |
| Change in turnover - Organic (vs. previous year) |
+42.3% | +8.4% |
| ROCE (return on capital employed) | 19.7% | 11.5% |
| Net debt/EBITDA | 1.25 | 1.52 |
| Net working capital/Turnover | 26.1% | 28.2% |
| Net debt/equity | 55.2% | 47.8% |
| Days of Sales Outstanding | 101 | 111 |
| Days of Payables Outstanding | 96 | 98 |
| Days of Inventory Outstanding | 99 | 97 |
"
The Sabaf Group has always considered sustainability to be an integral part of its Business Model. With the Business Plan 2021 - 2023, the Group promotes the improvement of the quality of the environment and the community in which it operates so that the basic needs of all are met in an environmentally sustainable way. "
| 2021 TARGET | |||||
|---|---|---|---|---|---|
| AREA | KPI | PLANNED | ACHIEVED | ||
| 1 | Development of resources and skills |
Hours of training per capita |
11 | YES | 20,4 |
| 2 | Health and safety |
Accident frequency rate |
140 | NO | 327 |
| Accident severity rate |
|||||
| 3 | Eco-efficiency and Emissions into the atmosphere |
tCO emissions on 2eq sales |
126 | YES | 111 |
In its second year of participation, Sabaf received a B- rating in CDP's Climate Change section, on a scale ranging from A to F. In its second year of participation, Sabaf received a B- rating in CDP's Climate Change section, on a scale ranging from A to F.
In its second year of participation, Sabaf received a B- rating in CDP's Climate Change section, on a scale ranging from A to F. "This excellent rating is an important acknowledgement of the Sabaf Group's ongoing commitment to the challenge of combating climate change: priority in the management of environmental issues, also through product and process innovation, is an integral part of our strategy."
CDP is the world's leading environmental performance reporting programme: more than 13,000 companies, representing 64% of global market capitalization, published their environmental data through CDP in 2021. CDP requires companies to report information on environmental governance, related risks and opportunities performance in terms of energy consumption and emissions and reduction targets.
In its second year of participation, Sabaf received a B- rating in CDP's Climate Change The SABAF Group is one of the key strategic suppliers to the British Government's hydrogen feasibility project Hy4Heat.
The project aims to establish whether it is technically possible, safe and convenient to replace natural gas with 100% hydrogen in residential and commercial buildings and gas appliances. The project is financed by BEIS, (UK governments Department for Business, Energy, and Industrial Strategy) and involves ten separate work packages.
The Sabaf Group, through its subsidiary ARC, is involved in the Work Package 4, which covers cooking and heating appliances. ARC has developed and produced the burners that are included in the world's first ranges of 100% hydrogen powered hobs and cookers.
These were installed on Glen Dimpex cooking appliances at HyHome, two houses featuring hydrogen appliances in a "real life" scenario in Low Thornley, near Gateshead, Northern England.
Immediately following the Hy4Heat project, the cooking appliances with ARC burners will be specified for the Community Trial involving 300 homes commencing in 2022. Beyond the Community Trial, the UK Government intends to commission a 'Village Trial' with around 2,500 homes in 2025 and a 'Town Trial' (10,000 homes) in the latter part of the decade prior to potentially converting the whole UK gas grid to hydrogen over future years
ARC is involved also in Work Package 5B (Development of hydrogen commercial appliances, which includes catering equipment) and has developed burners for Falcon Foodservice Equipment Ltd.
KEY POINTS
at least
+100 bps
EBITDA at least 19% on sales
ROI 12.5% Compared to 11.5% in 2020
€ 20 mn
FINANCED with:
CAGR: +10.6%
Figures in euro million
| MARKET | 2020 | 2021 | 2022 | 2023 | Var % 2023 vs. 2020 |
CAGR |
|---|---|---|---|---|---|---|
| EUROPE (excl. Turkey) | 69.6 | 76.3 | 80.3 | 86.6 | 5% +24 |
7.6% |
| TURKEY | 44.8 | 51.6 | 55.6 | 56.6 | 3% +26 |
8.1% |
| NORTH AMERICA | 22.7 | 27.5 | 32.2 | 37.2 | 6% +63 |
17.8% |
| SOUTH AMERICA | 27.6 | 29.0 | 30.4 | 32.9 | 9% +18 |
5.9% |
| AFRICA AND MIDDLE EAST | 12.2 | 14.1 | 14.1 | 16.1 | 5% +32 |
9.8% |
| CHINA AND FAR EAST | 6.8 | 10.3 | 11.5 | 14.2 | 1% +101 |
28.1% |
| INDIA | 1.2 | 1.7 | 4.3 | 6.9 | 0% +468 |
78.4% |
| TOTAL | 184.9 | 210.5 | 228.4 | 250.5 | 5% +35 |
10.6% |
| Growth previous vs year |
9% +13 |
5% +8 |
7% +9 |
HUGE NEW PROJECTS PIPELINE
ORGANIC GROWTH +35.5% on 2020
STRONG RELATIONSHIPS WITH GLOBAL PLAYERS
(Amounts in mn Eur)
| Production Capacity Increase | |
|---|---|
| India Plant | 5.2 |
| Turkey Plant | 6.0 |
| Mexico Plant | 5.0 |
| Tot New Plants | 16.2 |
Maintenance 12.5
| New Projects | |
|---|---|
| Electronics | 5.3 |
| Other Projects | 6.0 |
| Hinges | 5.0 |
| Gas | 13.8 |
| Tot new projects | 30.1 |
37
Sabaf's strategy and governance model are aimed towards ensuring long-term sustainable growth. For Sabaf, sustainability is primarily based on sharing values with its stakeholders; compliance with common values increases mutual trust and encourages knowledge development. " "
«We believe in a world in which all people's basic needs, such as home, food and reliable energy, are fulfilled in an environmentally sustainable way.
We promote a company that improves the quality of the environment and the communities where we live and work»
M&A as a tool for achieving longterm targets through:
Growth of the competitive advantage by differentiating the Sabaf value proposition from competitors
Preservation of the identity of acquired companies, which maintain their brand, local supply chain and workforce
Retention of talents and soft skills
Achievement of significant commercial and industrial synergies
From an entrepreneurial to an industrial approach
Joint effort for growth and positives influence on margins
Preferably seller is taken onboard as a director and/or minority shareholder
| TURNOVER | € 5 - 70 mn sales |
|---|---|
| EBITDA | Steady positive results over past years No turnarounds |
| SHAREHOLDING | Preference for entrepreneurial ownership |
| EBITDA MULTIPLES | Non-dilutive |
| M&A TEAM | Dedicated to scouting and development of business contacts, creation of an internal Data Base, analysis and evaluation of opportunities, management of negotiations |
Data Base, analysis and evaluation of opportunities, management of negotiations
Total growth: 62% by 2023 vs. 2020 (Organic and by acquisitions growth) (CAGR 17.5%)
Investments and dividends, for a total amount of € 150 mn financed with:
COMPARED TO 11.5% IN 2020
Certain information included in this document is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially.
The Company's business is in the domestic appliance industry, with special reference to the gas cooking sector, and its outlook is predominantly based on its interpretation of what it considers to be the key economic factors affecting this business. Forwardlooking statements with regard to the Group's business involve a number of important factors that are subject to change, including: the many interrelated factors that affect consumer confidence and worldwide demand for durable goods; general economic conditions in the Group's markets; actions of competitors; commodity prices; interest rates and currency exchange rates; political and civil unrest; and other risks and uncertainties.
Pursuant to Article 154/2, paragraph 2 of the Italian Consolidated Finance Act (Testo Unico della Finanza), the company's Financial Reporting Officer Gianluca Beschi declares that the financial disclosure contained in this financial presentation corresponds to the company's records, books and accounting entries.
For further information, please contact
Gianluca Beschi - +39.030.6843236 [email protected]
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