Your perfect pool experience
Baird's 2020 Global Industrial Conference
Bruce Brooks, CEO November 11, 2020
Disclaimer
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- This document is for information purposes only and does not constitute an offer to sell, exchange or buy, or an invitation to make offers to buy, securities issued by any of the companies mentioned. This financial information has been prepared by Fluidra, S.A. ("Fluidra", and with all its subsidiaries, the "Fluidra Group") in accordance with International Financial Reporting Standards (IFRS). Taking into consideration the recent merger of Fluidra and the Zodiac Group, please note that the companies within the Fluidra Group coming from legacy Zodiac have reported on a September fiscal year, using US Dollars as its functional currency and under IFRS accounting standards. In this presentation, financials have thus been calendarized to December year-end based on management accounts. Financials have been converted to Euros at Fluidra reporting FX rates.
- The assumptions, information and forecasts contained herein do not guarantee future results and are exposed to risks and uncertainties; actual results may differ significantly from those used in the assumptions and forecasts for various reasons.
- The information contained in this document may contain statements regarding future intentions, expectations or projections. All statements, other than those based on historical facts, are forward-looking statements, including, without limitation, those regarding our financial position, business strategy, management plans and objectives for future operations. Such forward-looking statements are affected, as such, by risks and uncertainties, which could mean that what actually happens does not correspond to them.
- These risks include, amongst others, seasonal fluctuations that may change demand, industry competition, economic and legal conditions, and restrictions on free trade and/or political instability in the markets where the Fluidra Group operates or in those countries where the Group's products are manufactured or distributed. The Fluidra Group makes no commitment to issue updates or revisions concerning the forwardlooking statements included in this financial information or concerning the expectations, events, conditions or circumstances on which these forward-looking statements are based.
- In any event, the Fluidra Group provides information on these and other factors that may affect the Company's forward-looking statements, business and financial results in documents filed with the Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores). We invite all interested persons or entities to consult these documents.
Fluidra at a glance
- Global manufacturing leader in pool equipment and wellness solutions
- Innovative, user-focused provider of highly engineered products and solutions
- Listed on the Spanish stock exchange, with a market capitalization of >€3.0B
- Global headquarters in Barcelona, (Spain) and North American headquarters in San Diego (California)
- Present in over 45 countries with over 5,000 employees
- Owner of some of the industry's most recognized and trusted brands, including Jandy®, AstralPool®, Polaris®, Cepex®, Zodiac®, CTX Professional® and Gre®
- c. €1.4bn sales and €269m EBITDA in 2019
Overview Global & balanced presence
Highlights, Mission and Values
WE CREATE THE PERFECT POOL & WELLNESS EXPERIENCE
Highly attractive market with two growth drivers 1
New build growing but still well below pre-crisis levels
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New pools, thousands
Resilient market driven by large installed base
Split by market type
New build feeds pool base every year even in a downturn
Sources: Internal estimates based on external sources (news, company annual reports & presentations, and reports & publications from trade groups)
Europe N. America S. America RoW
Sources: Internal estimates based on external sources (news, company annual reports & presentations, and reports & publications from trade groups)
Broadest geographic footprint adapted to local market
- Global market leader with access to all major pool markets
- Customer & commercial approach by market
- Large growth opportunity in the US, the world's largest market
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Geographical diversification reduces risk and provides opportunity for growth
Expansive product offering drives growth
- Expansive product offering and portfolio of brands allows for €59m in revenue synergies ambition to be reached by 2022 (€42m net of dis-synergies)
- North America: expand residential pool offering and launching of new commercial pool business unit
- Europe and Southern Hemisphere: leverage distribution platform
75k+ items from entry level manual cleaners to large commercial filters; from above ground pools to commercial pools
Revenue synergies provide upside opportunity / hedge for change in macro environment
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Core competency in product development drives future growth
Excellence in innovation
- R&D capability with >200 engineers and >1,100 patents
- Robust product road map
- Improving quality and user experience
- Technology focused on increasing energy efficiency and sustainability
- Global range expansion
- Industry leader in connected pools (IoT)
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Proven history of innovation helps us outgrow the market
Four strategic objectives that deliver value through 2022 2
Accelerate growth
in North America |
•
Product category expansion
•
After market penetration
•
New product pipeline and connected pools |
Leverage platform in
Europe and Southern
Hemisphere |
•
Fluidra
Pro Center
expansion
Sales and customer management
•
•
Brand and channel management
•
Integration |
Increase penetration of
commercial pools in
emerging markets |
•
Complete product portfolio
•
From prescription to project management |
Improve margin via
operational excellence
and integration synergy |
•
Value improvement & lean
•
Synergies
•
Quality
Service level
• |
Strong cash flow generation and improving returns
Strong sales growth and a resilient business model 3
…that is highly resilient…
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… Resulting in Total Sales of €1.7bn in 2022 Growth drivers (€bn) 1,2 1,7 2017 PF 2018E 2019E 2020E 2021E 2022E
- Maintaining and upgrading an aging installed base is main market driver
- New build well below long-term historical averages adds room for further growth
- Sales excellence, product expansion and service improvement will drive market share gains
- Diversified geographical footprint reduces risk profile
Revenue synergies and bolt-on acquisitions are additional growth drivers to current plan
Key margin improvement initiatives 3
Value initiatives and lean update
- Value initiatives and lean target revised upwards by €5m to €30m
- US tariff is an offset to visualizing 2019 incremental value initiatives and lean impact on P&L (approximately €7m)
- Redesigning supply chain to have tariff become a temporary impact
Cost synergies update
| 2018A |
2019A |
2020E |
2021E |
| Guidance Run Rate |
|
-Revised Guidance Run Rate |
|
- Commercial integration cost synergies provide upside to €17m
- Operations cost synergies on track to €23m target
- Costs to achieve increase from €35m to €47m
- €36M 2019 target was already surpassed in Q3
Significant margin improvement and cash generation 3
- Pre IFRS 16 EBITDA margin (IFRS 16 provides additional c.140bps)
- Cost Synergies guidance increased to €40m (i.e. 240bps)
- Lean & Value Initiatives guidance increased to €30m (i.e. 180bps)
EBITDA margin evolution Delivers strong deleveraging for cash allocation
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- Privileged capital structure with over €470M available liquidity through cash on hand, long term covenant-free TLB and other credit lines
- Financial policy is to operate company at ≈ 2x NFD / EBITDA leverage
- Cash allocation priorities once below agreed maximum targets in shareholders' agreement are dividends and bolt-on acquisitions
- Net working capital as % sales target improves by ~200 bps
3 Structural Dynamics & Investment Case
- Superb finish to the 2020 Residential Pool season. Early data for October points to double digit Sales growth.
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- Management is confident on delivering a strong full year 2020.
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- The fundamentals of the sector remain strong. Macro stay at home trends point to industry growing off increased Aftermarket base and accelerated New Construction.
- The US Early Buy orders received show another positive indicator for 2021
- Continued weak performance of Commercial Pool market with minimal impact on our Sales
- Longer term we anticipate industry returning to normal growth trends
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- Our strategy and investment thesis remains unchanged:
- Resilient and attractive market
- Driving growth through our customer-focused leading platform
- Margin expansion and strong cash conversion
- Delivering ROCE increase that could be accelerated by accretive capital allocation
THANK YOU FOR YOUR ATTENTION!
Bloomberg ticker: FDR:SM Reuters ticker: FLUI.MC
Luis Boada IR, Corporate Communications & Business Development Director [email protected] T: +34 93 724 39 00 M: +34 600 930 505 www.fluidra.com/shareholders