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Dometic Group
Quarterly Report • Jan 31, 2024
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Quarterly Report
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QUARTERLY REPORT Q4 2023
Solna, January 31, 2024
INCREASED MARGIN AND IMPROVED NET DEBT LEVERAGE
FOURTH QUARTER 2023 FULL YEAR 2023
- Net sales were SEK 5,327 m (6,172); a decrease of -14%, of which -13% was organic growth.
- Operating profit (EBITA1)) before items affecting comparability2) was SEK 465 m (430), corresponding to a margin of 8.7% (7.0%).
- Items affecting comparability2) were SEK -73 m (-32).
- Operating profit (EBITA1)) was SEK 392 m (398), corresponding to a margin of 7.4% (6.4%).
- Operating profit (EBIT) was SEK 242 m (236), corresponding to a margin of 4.5% (3.8%).
- Profit for the quarter was SEK 51 m (27).
- Earnings per share were SEK 0.16 (0.09). Adjusted earnings per share3) were SEK 0.67 (0.54).
- Operating cash flow for the quarter was SEK 488 m (1,117). Cash flow for the quarter was SEK -220 m (331).
-
Net debt to EBITDA leverage ratio4) at the end of the quarter was 2.7x (3.0x), compared to 2.9x at the end of the third quarter 2023.
-
Net sales were SEK 27,775 m (29,764); a decrease of -7%, of which -12% was organic growth.
- Operating profit (EBITA1)) before items affecting comparability2) was SEK 3,463 m (3,931), corresponding to a margin of 12.5% (13.2%).
- Items affecting comparability2) were SEK -167 m (-532).
- Operating profit (EBITA1)) was SEK 3,296 m (3,399), corresponding to a margin of 11.9% (11.4%).
- Operating profit (EBIT) was SEK 2,682 m (2,789), corresponding to a margin of 9.7% (9.4%).
- Profit for the full year was SEK 1,332 m (1,784).
- Earnings per share were SEK 4.17 (5.58). Adjusted earnings per share3) were SEK 5.93 (8.32).
- Operating cash flow for the full year was SEK 5,205 m (2,268). Cash flow for the full year was SEK 4 m (-127).
- The Board of Directors proposes a dividend of SEK 1.90 (1.30) per share for 2023, corresponding to a payout ratio of 46%.
FINANCIAL OVERVIEW
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Net sales | 5,327 | 6,172 | 27,775 | 29,764 |
| Operating profit (EBITA¹⁾) before items affecting comparability²⁾ | 465 | 430 | 3,463 | 3,931 |
| % of net sales | 8.7% | 7.0% | 12.5% | 13.2% |
| Operating profit (EBITA¹⁾) | 392 | 398 | 3,296 | 3,399 |
| % of net sales | 7.4% | 6.4% | 11.9% | 11.4% |
| Operating profit (EBIT) | 242 | 236 | 2,682 | 2,789 |
| % of net sales | 4.5% | 3.8% | 9.7% | 9.4% |
| Profit for the period | 51 | 27 | 1,332 | 1,784 |
| Earnings per share, SEK | 0.16 | 0.09 | 4.17 | 5.58 |
| Adjusted earnings per share, SEK³⁾ | 0.67 | 0.54 | 5.93 | 8.32 |
| Cash flow for the period | -220 | 331 | 4 | -127 |
| Operating cash flow | 488 | 1,117 | 5,205 | 2,268 |
| Net debt to EBITDA leverage ratio⁴⁾ | 2.7x | 3,0x | 2.7x | 3.0x |
| RoOC, excluding goodwill and trademarks | 21.0% | 23.1% | 21.0% | 23.1% |
¹⁾Before Amortization of acquisition-related intangible assets
²⁾See Note 6 Items affecting comparability
³⁾Excludes the impact from Amortization of acquisition-related intangible assets and items affecting comparability, for specification see note 8
⁴⁾For specification see note 9
See definitions of measures and KPIs at the end of the report. See detailed reconciliation tables on www.dometicgroup.com/investors for reconciliation of non-IFRS measures to IFRS
CEO COMMENTS
In a challenging market environment, impacted by geopolitical and macroeconomic uncertainty in combination with high inventory levels, we continued to demonstrate that we have become a resilient, fast-moving and more effective company. Due to the tough market situation, full year 2023 organic net sales declined by 12 percent, while the EBITA-margin1) showed solid year-on-year improvements in the second half of the year and ended at 12.5 percent (13.2) for the full year. Reducing working capital was a top priority and operating cash flow of SEK 5.2 b (2.3) for the year was our strongest ever.
Net sales in the fourth quarter 2023 totaled SEK 5,327 m (6,172), which represents an organic net sales decline by 13 percent. In a seasonally weak quarter, organic net sales in the Distribution sales channel declined by 20 percent as most retailers re-balance their inventories with a temporary larger negative impact on the Igloo business. As expected, the situation in the Service & Aftermarket sales channel continues to improve gradually, and organic net sales declined by 3 percent compared to a decline of 5 percent in the third quarter. Net sales in the OEM sales channel declined by 14 percent organically, mainly due to lower net sales in Marine and in RV Americas.
The EBITA-margin for the quarter improved to 8.7 percent (7.0) supported by price management, cost reductions and net sales mix. Our strategy to prioritize margins before volumes is becoming increasingly visible on our margin development. Segments APAC, EMEA and Global all showed improvements compared with the same quarter last year. In segment Global, the Igloo business delivered a stronger margin despite lower net sales. EMEA's margin improved to 0.3 percent (-3.8) and cost reduction activities have started to generate results, while the sales mix continues to have a negative effect. Segment Marine's margin was robust at 21.6 percent (25.5), despite an organic net sales decline of 12 percent.
The margin for segment Americas remains under pressure and below our expectations. On January 9, Todd Seyfert was appointed as new President for the segment. Todd has a vast management experience from the Outdoor industry and I am convinced we will accelerate our transformation journey and drive efficiencies and margin improvements in the segment.
The operating cash flow was solid at SEK 488 m (1,117), compared to a strong fourth quarter 2022. Inventory levels declined in the quarter and were SEK 2 b lower than a year ago. The net debt to EBITDA leverage ratio declined to 2.7x from 2.9x at the of the third quarter 2023. The Group has maintained a strong focus on cash flow and we are committed to achieving our net debt to EBITDA leverage ratio target of around 2.5x. Our cash position is solid and the Board of Directors proposes a dividend of SEK 1.90 (1.30) per share for 2023, corresponding to a payout ratio of 46%.
The product innovation index improved sequentially to 17 percent and our pipeline of new products is robust. Dometic is on a transformation journey, and we are gradually shifting the focus from a regional led approach to a product led approach, with focused and specialized teams driving specific product solutions globally. The first steps on our transformation journey were successfully taken in 2021 and 2022 with the formation of the Global and Marine segments. To further drive value creation and secure synergy realization across the company, we are planning to establish Mobile Cooling Solutions as a new segment from the first quarter 2024 reporting. In addition, our Mobile Power Solutions business will be a new sub-segment in segment Global Ventures. See 'Significant events after the quarter' on page 2 for further details about the 2024 segment reporting structure.
The long-term trends in the Mobile Living industry are strong, however it remains difficult to predict how the current macroeconomic situation and market conditions will impact the business in the short term. Our planning assumptions from the third quarter 2023 remain largely unchanged; We anticipate the recovery in demand in the Service & Aftermarket sales channel to continue. In the Distribution sales channel we expect a gradual recovery coming quarters as retail inventories continue to decline. In the OEM sales channel we foresee a continued weak demand coming quarters. In this environment we will continue to relentlessly drive our strategic agenda to deliver on our targets, prioritize margins before volumes, and at the same time remain agile to quickly respond to short-term market trends.
We are very proud of the results that we have achieved in a very challenging 2023. Thanks to our dedicated employees around the globe, we continued to take several important steps on our strategic transformation journey while we at the same time took necessary short-term cost reduction actions to protect margins and cash flow.
Juan Vargues, President and CEO 1Unless stated otherwise, EBITA refers to EBITA before items affecting comparability.
Op. profit (EBITA) before i.a.c. SEK m
Operating cash flow, SEK m
FINANCIAL SUMMARY – FOURTH QUARTER 2023
Net sales were SEK 5,327 m (6,172), a decrease of -14% compared with the same quarter last year. This comprised -13% organic growth, -1% currency translation and 0% M&A.
Gross profit was SEK 1,436 m (1,448) corresponding to 27.0% (23.4%) of net sales. The improvement was supported by cost reductions, price management and a sales mix with a higher share of Service & Aftermarket net sales.
Sales and administrative expenses totaled SEK -845 m (-849). Investments in strategic structural growth areas continues and sales and administrative expenses in percent of net sales increased to 15.9% (13.8%).
Research and development expenses were SEK -142 m (-126) and were impacted by increased investments in strategic structural growth areas. Research and development expenses of SEK -6 m (-23) were capitalized in the quarter. In total, this corresponds to 2.8% (2.4%) of net sales.
Other operating income and expenses were SEK 17 m (-43). The deviation compared with the same quarter last year was mainly due to currency effects including hedge effects.
Operating profit (EBITA) before amortization of acquisitionrelated intangible assets and items affecting comparability was SEK 465 m (430). The corresponding margin improved to 8.7% (7.0%) supported by price management, cost reductions and net sales mix. The strategy to prioritize margins before volumes is becoming increasingly visible on the margin development. The improved margin was driven by segments APAC, EMEA and Global.
Amortization of acquisition-related intangible assets were SEK -150 m (-162).
Items affecting comparability totaled SEK -73 m (-32) and were mainly related to activities in the previously announced global restructuring programs.
Operating profit (EBIT) was SEK 242 m (236). The corresponding margin was 4.5% (3.8%). The improved margin was driven by an improved EBITA2) margin partly offset by increased items affecting comparability.
Financial items totaled a net amount of SEK -159 m (-166), whereof SEK -217 m (-161) in interest on external bank and bond loans impacted by higher interest rates. Other FX revaluations and other items amounted to SEK -29 m (-25) and financial income amounted to SEK 86 m (20).
Taxes totaled SEK -31 m (-43), corresponding to 38% (61%) of profit before tax. Current tax amounted to SEK -286 m (209) and deferred tax to SEK 255 m (-252). Paid tax was SEK -395 m (-415).
Profit for the period was SEK 51 m (27).
Earnings per share were SEK 0.16 (0.09). Adjusted earnings per share were SEK 0.67 (0.54).
Operating cash flow was SEK 488 m (1,117). The deviation, compared to a strong fourth quarter 2022, was mainly related to less working capital reduction in 2023.
Cash flow was SEK -220 m (331) with a reduced operating cash flow compared to a strong fourth quarter 2022. Net cash flow from investments was SEK -289 m (-410) of which SEK -14 m (-194) payments of deferred considerations related to acquisitions completed previous years and SEK -278 m (-222) investments in fixed assets.
Net cash flow from financing was SEK -301 m (-183). The net of paid and received interest was SEK -102 m (-73).
Global restructuring programs. In 2023 Dometic had two programs running. The first program was initiated 2019, targeting an annual saving of SEK 400 m at a total cost of SEK 750 m. An additional program was announced in the second quarter 2022, targeting an annual saving of SEK 200 m at a total cost of SEK 200 m. The programs were completed in the fourth quarter 2023 and during the quarter total costs related to the two programs amounted to SEK -68 m (-20).
Significant events after the quarter. Todd Seyfert joined Dometic on January 9, 2024 as new President for segment Americas.
Dometic is planning to have a new segment reporting structure with six reporting segments starting from the first quarter 2024 reporting:
-The Igloo business and other Dometic branded Mobile cooling and drinkware businesses will be consolidated into a new segment named Mobile Cooling Solutions.
-Segment Global is renamed to segment Global Ventures. Other Global Verticals remains as a subsegment. Dometics offering of Mobile Power Solutions will be consolidated globally and will be a new subsegment in segment Global Ventures.
-The product solutions for the RV and CPV industries will be consolidated in the three land vehicle segments of Americas, APAC and EMEA. This includes both the OEM and the Service & Aftermarket business, as well as other Outdoor standalone products for land based outdoor activities. The Mobile Power Solutions businesses in the three land vehicle segments will be reported in segment Global Ventures.
-Segment Marine remain as a separate segment. The Mobile Power Solutions business in segment Marine will be reported in segment Global Ventures.
There have been no other significant events that have impacted the financial reporting after the balance sheet date.
FINANCIAL SUMMARY – FULL YEAR 2023
Net sales were SEK 27,775 m (29,764), a decrease of -7% compared with the full year 2022. This comprised -12% organic growth, 5% currency translation and 0% M&A.
Operating profit (EBITA) before amortization of acquisitionrelated intangible assets and items affecting comparability was SEK 3,463 m (3,931). The corresponding margin was 12.5% (13.2%). Gross profit in percent of net sales improved compared with the full year 2022 to 28.0% (26.5%). Sales, Administrative as well as Research and development expenses were negatively impacted by currency effects and increased investments in strategic structural growth areas. Other operating income and expenses were SEK -13 m (143) m. The deviation compared with the full year 2022 was mainly due to currency hedge effects. Currency effects in total, mainly translation effects, had a positive impact on the operating profit, however with a limited impact on the corresponding margin.
Amortization of acquisition-related intangible assets were SEK -613 m (-611).
Items affecting comparability totaled SEK -167 m (-532) and were mainly related to activities in the previously announced global restructuring programs.
Operating profit (EBIT) was SEK 2,682 m (2,789). The corresponding margin was 9.7% (9.4%). The improved margin was negatively impacted by a lower EBITA2) margin, which was more than offset by reduced items affecting comparability.
Financial items totaled a net amount of SEK -800 m (-351), whereof SEK -887 m (-531) in interest on external bank and bond loans impacted by higher interest rates. Other FX revaluations and other items amounted to SEK -81 m (135) and financial income amounted to SEK 168 m (45).
Taxes totaled SEK -551 m (-654), corresponding to 29% (27%) of profit before tax. The increased tax rate was due to a country mix with more taxable profits in higher tax jurisdictions and increased non-tax deductible interest costs. Current tax amounted to SEK -804 m (-723) and deferred tax to SEK 253 m (70). Paid tax was SEK -979 m (-991), corresponding to a paid tax rate of 52% (41%). Paid tax in 2023 and 2022 were impacted by taxes related to previous years. Deferred tax recognized in the balance sheet on tax losses amounts to SEK 356 m of which SEK 146 m has been recognized in 2023. The recognition is supported by future utilization based on the assumptions used in the annual impairment test of goodwill and intangible assets with an indefinite useful life.
Profit for the period was SEK 1,332 m (1,784).
Earnings per share were SEK 4.17 (5.58). Adjusted earnings per share were SEK 5.93 (8.32).
Operating cash flow was SEK 5,205 m (2,268). The improvement compared with the full year 2022 was mainly driven by reduced inventories.
Cash flow was SEK 4 m (-127) supported by an improved operating cash flow. Net cash flow from investments was SEK -1,165 m (-1,426), of which SEK -539 m (-847) payments of deferred considerations related to acquisitions completed previous years, and SEK -628 m (-593) investments in fixed assets.
Net cash flow from financing was SEK -3,685 m (-570). A bond of EUR 300 m due in September 2023 was repaid using cash at hand. Dometic has refinanced part of its credit facilities agreement with its bank group in 2023. A floating rate term loan of USD 210 m, previously expiring in 2024, was replaced with a USD 220 m floating rate term loan with a 3-year maturity including two 1-year extension options. In 2023 Dometic also signed and
drawn down a 3.5 year floating rate term loan of USD 44 m with Svensk Exportkredit. In addition, a SEK 750 m private placement bond of 3.25 years, at a rate of 6.25%, was signed and drawn down in 2023. Dividend paid were SEK -415 m (-783) and the net of paid and received interest were SEK -762 m (-489).
Financial position. Net debt to EBITDA leverage ratio was 2.7x (3.0x) at the end of the period. The reduction was driven by a positive operating cash flow. The ratio improved compared to the end of the third quarter 2023 (2.9x). During the fourth quarter the annual impairment test of all Cash Generating Units (CGU), which is required under IFRS, was performed. None of the CGU's tested were impaired as carrying amount exceeded the recoverable amount. Consequently, no impairment losses have been recognized in 2023.
Return on Operating Capital (RoOC) excluding goodwill and trademarks was 21.0% (23.1%).
Global restructuring programs. In 2023 Dometic had two programs running. The first program was initiated 2019, targeting an annual saving of SEK 400 m at a total cost of SEK 750 m. An additional program was announced in the second quarter 2022, targeting an annual saving of SEK 200 m at a total cost of SEK 200 m. The programs were completed in 2023 and during the year total costs related to the two programs amounted to SEK -142 m (-499). Since the start, 24 sites and approximately 2,000 employees have been affected by the programs with a total cost of SEK -960 m.
Employees. Number of employees in terms of headcount was 7,819 (8,487) at the end of the year.
2) Before items affecting comparability
FINANCIAL PERFORMANCE BY SEGMENT
| Q4 | Q4 | Change (%) | FY | FY | Change (%) | |||
|---|---|---|---|---|---|---|---|---|
| SEK m | 2023 | 2022 | Reported | Organic⁽¹⁾ | 2023 | 2022 | Reported | Organic⁽¹⁾ |
| Americas | 951 | 1,192 | -20% | -16% | 5,003 | 6,780 | -26% | -31% |
| EMEA | 1,498 | 1,602 | -6% | -9% | 7,981 | 7,970 | 0% | -7% |
| APAC | 580 | 586 | -1% | 1% | 2,138 | 2,231 | -4% | -5% |
| Marine | 1,447 | 1,651 | -12% | -12% | 6,719 | 6,695 | 0% | -4% |
| Global | 851 | 1,142 | -25% | -22% | 5,934 | 6,086 | -2% | -8% |
| Net sales | 5,327 | 6,172 | -14% | -13% | 27,775 | 29,764 | -7% | -12% |
| Americas | -57 | -60 | -104 | 330 | ||||
| EMEA | 5 | -62 | 723 | 838 | ||||
| APAC | 152 | 129 | 557 | 555 | ||||
| Marine | 313 | 422 | 1,654 | 1,743 | ||||
| Global | 53 | 1 | 633 | 464 | ||||
| Operating profit (EBITA⁽²⁾) before i.a.c.⁽³⁾ | 465 | 430 | 3,463 | 3,931 | ||||
| Americas | -6.0% | -5.1% | -2.1% | 4.9% | ||||
| EMEA | 0.3% | -3.8% | 9.1% | 10.5% | ||||
| APAC | 26.2% | 22.0% | 26.0% | 24.9% | ||||
| Marine | 21.6% | 25.5% | 24.6% | 26.0% | ||||
| Global | 6.2% | 0.1% | 10.7% | 7.6% | ||||
| Operating profit (EBITA) before i.a.c. % | 8.7% | 7.0% | 12.5% | 13.2% |
⁽¹⁾Net sales growth excluding acquisitions/divestments and currency translation effects.
⁽²⁾Before Amortization of acquisition-related intangible assets.
⁽³⁾See note 4 for Operating profit (EBIT) by segment and note 6 for details on i.a.c. (items affecting comparabilty).
SEGMENT AMERICAS
FOURTH QUARTER 2023 NET SALES AND OPERATING PROFIT
Segment Americas reported net sales of SEK 951 m (1,192), representing 18% (19%) of Group net sales. Total growth was -20%, of which -16% was organic growth, -4% currency translation and 0% M&A. The net sales decline was mainly in application areas Food & Beverage and Climate. The organic net sales decline was mainly due to lower RV OEM net sales.
Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK -57 m (-60), corresponding to a margin of -6.0% (-5.1%). The decline was driven by the net sales reduction. In addition, currency effects had a negative impact on the margin. This was partly offset by price management, efficiency improvements and a sales mix with a higher share of Distribution and Service & Aftermarket net sales. Items affecting comparability totaled SEK -3 m (-5). Amortization of acquisition-related intangible assets totaled SEK -26 m (-31). Operating profit (EBIT) was SEK -86 m (-97), corresponding to a margin of -9.0% (-8.1%).
FULL YEAR 2023 NET SALES AND OPERATING PROFIT
Segment Americas reported net sales of SEK 5,003 m (6,780), representing 18% (23%) of Group net sales. Total growth was -26%, of which -31% was organic growth, 5% currency translation and 0% M&A. The net sales decline was mainly in application areas Climate and Food & Beverage. The organic net sales decline was mainly due to lower RV OEM net sales. This was partly offset by net sales growth in the Distribution sales channel.
Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK -104 m (330), corresponding to a margin of -2.1% (4.9%). The decline was mainly due to lower net sales and related inefficiencies in operations. This was partly offset by price management, efficiency improvements and a sales mix with a higher share of Distribution and Service & Aftermarket net sales. Items affecting comparability totaled SEK -11 m (-151). Amortization of acquisition-related intangible assets totaled SEK -111 m (-118). Operating profit (EBIT) was SEK -226 m (61), corresponding to a margin of -4.5% (0.9%).
SEGMENT EMEA
FOURTH QUARTER 2023 NET SALES AND OPERATING PROFIT
Segment EMEA reported net sales of SEK 1,498 m (1,602), representing 28% (26%) of Group net sales. Total growth was -6%, of which -9% was organic growth, 3% currency translation and 0% M&A. The net sales decline was driven by application areas Food & Beverage and Power & Control. This was partly offset by growth in application area Climate. The organic net sales decline was due to lower Service & Aftermarket and Distribution net sales.
Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 5 m (-62), corresponding to a margin of 0.3% (-3.8%). The improvement was supported by price management and efficiency improvements. Extraordinary logistics-related costs and inefficiencies in manufacturing, linked to the factory transfer from Germany to an existing site in Hungary, are gradually declining but continued to have a negative impact on the EMEA operating profit. Items affecting comparability totaled SEK -63 m (-24) and were mainly linked to the global restructuring programs. Amortization of acquisition-related intangible assets totaled SEK -17 m (-19). Operating profit (EBIT) was SEK -75 m (-105), corresponding to a margin of -5.0% (-6.6%).
FULL YEAR 2023 NET SALES AND OPERATING PROFIT
Segment EMEA reported net sales of SEK 7,981 m (7,970), representing 29% (27%) of Group net sales. Total growth was 0%, of which -7% was organic growth, 7% currency translation and 0% M&A. The net sales growth in application area Climate was offset by lower net sales in application area Power & Control. The organic net sales decline was due to lower Service & Aftermarket and Distribution net sales. This was partly offset by stronger CPV OEM and RV OEM net sales.
Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 723 m (838), corresponding to a margin of 9.1% (10.5%). The sales mix, with a lower share of Distribution and Service & Aftermarket net sales, had a negative impact on the margin. This was partly offset by price management and efficiency improvements. Extraordinary logistics-related costs and inefficiencies in manufacturing, linked to the factory transfer from Germany to an existing site in Hungary, are gradually declining but continued to have a negative impact on the EMEA operating profit. Items affecting comparability totaled SEK -131 m (-370). Amortization of acquisition-related intangible assets totaled SEK -73 m (-74). Operating profit (EBIT) was SEK 519 m (394), corresponding to a margin of 6.5% (4.9%).
SEGMENT APAC
FOURTH QUARTER 2023 NET SALES AND OPERATING PROFIT
Segment APAC reported net sales of SEK 580 m (586), representing 11% (9%) of Group net sales. Total growth was -1%, of which 1% was organic growth, -2% currency translation and 0% M&A. The organic net sales growth was supported by net sales in the OEM sales channel.
Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 152 m (129), corresponding to a margin of 26.2% (22.0%). The improvement was driven by price management and efficiency improvements. In addition, currency effects had a positive impact on the margin. Items affecting comparability totaled SEK -1 m (0). Amortization of acquisition-related intangible assets totaled SEK -4 m (-5). Operating profit (EBIT) was SEK 147 m (124), corresponding to a margin of 25.3% (21.1%).
FULL YEAR 2023 NET SALES AND OPERATING PROFIT
Segment APAC reported net sales of SEK 2,138 m (2,231), representing 8% (7%) of Group net sales. Total growth was -4%, of which -5% was organic growth, 1% currency translation and 0% M&A. The net sales decline was mainly in application area Food & Beverage. The organic net sales decline was mainly due to lower Distribution net sales, while net sales in the OEM sales channel showed organic growth.
Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 557 m (555), corresponding to a margin of 26.0% (24.9%). The improvement was driven by price management and efficiency improvements. Items affecting comparability totaled SEK -4 m (-4). Amortization of acquisition-related intangible assets totaled SEK -19 m (-21). Operating profit (EBIT) was SEK 534 m (531), corresponding to a margin of 25.0% (23.8%).
SEGMENT MARINE
FOURTH QUARTER 2023 NET SALES AND OPERATING PROFIT
Segment Marine reported net sales of SEK 1,447 m (1,651), representing 27% (27%) of Group net sales. Total growth was -12%, of which -12% was organic growth, 0% currency translation and 0% M&A. The net sales decline was mainly in application area Power & Control. The organic net sales decline was due to lower OEM net sales. This was partly offset by growth in the Service & Aftermarket sales channel.
Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 313 m (422), corresponding to a margin of 21.6% (25.5%). The decline was driven by the net sales reduction. In addition, currency effects had a negative impact on the margin. This was partly offset by price management, efficiency improvements and a sales mix with a higher share of Service & Aftermarket net sales. Items affecting comparability totaled SEK 0 m (0). Amortization of acquisition-related intangible assets totaled SEK -53 m (-54). Operating profit (EBIT) was SEK 260 m (368), corresponding to a margin of 18.0% (22.3%).
FULL YEAR 2023 NET SALES AND OPERATING PROFIT
Segment Marine reported net sales of SEK 6,719 m (6,695), representing 24% (22%) of Group net sales. Total growth was 0%, of which -4% was organic growth, 4% currency translation and 0% M&A. The net sales growth in application area Climate was offset by lower net sales in application area Power & Control. The organic net sales decline was mainly due to lower OEM net sales.
Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 1,654 m (1,743), corresponding to a margin of 24.6% (26.0%). Currency effects and investments in strategic structural growth areas had a negative impact on the margin. This was partly offset by price management, efficiency improvements and a sales mix with a higher share of Service & Aftermarket net sales. Items affecting comparability totaled SEK 0 m (-1). Amortization of acquisition-related intangible assets totaled SEK -210 m (-202). Operating profit (EBIT) was SEK 1,444 m (1,541), corresponding to a margin of 21.5% (23.0%).
SEGMENT GLOBAL
FOURTH QUARTER 2023 NET SALES AND OPERATING PROFIT
Segment Global consists of the Igloo business and Other global verticals. Other global verticals includes the businesses of Residential, Hospitality and Mobile deliveries.
Segment Global reported net sales of SEK 851 m (1,142), representing 16% (19%) of Group net sales. Total growth was -25%, of which -22% was organic growth, -4% currency translation and 0% M&A. The organic net sales decline was mainly due to lower net sales for the Igloo business.
Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 53 m (1), corresponding to a margin of 6.2% (0.1%), with improved margins for both Other global verticals and the Igloo business despite lower net sales. Items affecting comparability totaled SEK -7 m (-2). Amortization of acquisition-related intangible assets totaled SEK - 50 m (-52). Operating profit (EBIT) was SEK -4 m (-52), corresponding to a margin of -0.4% (-4.6%).
FULL YEAR 2023 NET SALES AND OPERATING PROFIT
Segment Global reported net sales of SEK 5,934 m (6,086), representing 21% (20%) of Group net sales. Total growth was -2%, of which -8% was organic growth, 5% currency translation and 0% M&A. The organic net sales decline was related to both the Igloo business and Other global verticals.
Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 633 m (464), corresponding to a margin of 10.7% (7.6%), with improved margins for both Other global verticals and the Igloo business. Items affecting comparability totaled SEK -22 m (-7). Amortization of acquisition-related intangible assets totaled SEK -200 m (-196). Operating profit (EBIT) was SEK 411 m (262), corresponding to a margin of 6.9% (4.3%).
SUSTAINABILITY UPDATE
As a pioneer in the Mobile Living arena, Dometic is committed to driving sustainability in its industry. This means offering innovative, durable, low-carbon products that inspire an active, comfortable, and responsible life in the outdoors. Dometic also provides a safe, healthy, diverse, and inclusive workplace and ensures business practices meet the highest ethical standards.
Dometic's sustainability platform consists of three focus areas – People, Planet, Governance – with strong ownership in Group management and with clear KPIs, targets and activities implemented in daily operations. Progress on all defined targets is reported externally as part of the Annual and Sustainability Report. In addition, on four of the KPIs, progress is reported on a quarterly basis.
Actual result, Baseline and Targets in the table below are excluding acquisitions in 2021 and 2022. The process of including acquired companies has started and actual result including acquisitions is included for some KPIs in the text below.
| Focus area | KPI | Actual result | Previous year⁽²⁾ |
Baseline (Year)⁽³⁾ |
Target 2024 |
|---|---|---|---|---|---|
| People | LTIFR | 1.9 | 1.5 | 2.4 (2021) | <2.0 |
| People | Share of female managers | 29% | 24% | 24% (2021) | 27% (increase 1% point per year) |
| Planet | Reduction in CO₂ ton / net sales SEK m⁽¹⁾ |
-47% | -38% | 2.0 (2020) | -30% |
| Governance | Share of new suppliers being ESG audited |
98% | 100% | n/a | 90% |
⁽¹⁾Adjusted for acquisitions and currency translation effects.
⁽²⁾ Previous year refers to actual results for the same reporting period previous year.
⁽³⁾Baseline refers to actual results (and year) used as starting point for Dometic's targets.
LTIFR (Lost Time Injury Frequency Rate). The LTIFR was 1.9 (1.5) and better than the target of 2.0. In total 25 (24) lost-time safetyrelated incidents were reported in the quarter. Including the acquisitions made in 2021 and 2022, the LTIFR actual result was 1.6. A company-wide Health & Safety incident reporting system is being implemented. This will enable Dometic to further track occurred incidents, to learn and to take corrective proactive measures.
Share of female managers. The share of female managers has increased to 29% (24%). The result is supported by all segments' dedicated efforts to promote gender diversity, equity and inclusion, and to create a more equitable workplace. The company will continue its efforts throughout the organization to further increase the proportion of female managers. Including the acquisitions made in 2021 and 2022, the share of female managers actual result was 28%.
CO2 ton4) /net sales SEK m. In 2023, emissions relative to net sales have decreased by -47% (-38%) compared to the 2020 baseline. This reduction was primarily driven by ongoing energy efficiency initiatives and the transition towards renewable electricity sources. Absolute CO2 emissions have decreased by -42% compared with 2020. Within the EMEA segment, all manufacturing sites in scope have transitioned to renewable electricity. Additionally, Dometic has successfully secured renewable energy credits (RECs) during the year. In 2023, 43% of the Group's total electricity comes from renewable sources, a significant increase compard to 6% in 2020. During the year, additional two manufacturing sites in segments APAC and EMEA successfully installed solar panel systems, and the solar panels in APAC generates approximately 50% of the site's total electricity consumption.
Share of new suppliers being ESG audited. Dometic actively emphasizes auditing suppliers to guarantee that our Business Partners understands our sustainability requirements and adhere to the Code of Conduct. We ensure that a minimum of 90% of all new significant direct material suppliers undergo ESG compliance audits. In 2023 Dometic had successfully audited 98% (100%) of the new suppliers in scope, all of whom met our ESG compliance criteria satisfactorily.
4) Scope 1 and 2 emissions represented by fuel combustion, electricity and district heating used on operation sites.
PARENT COMPANY DOMETIC GROUP AB (PUBL)
Fourth quarter 2023
The Parent Company Dometic Group AB (publ) comprises the functions of the Group's head office, such as Group management and administration. The Parent Company invoices its costs to the Group companies.
For the quarter, the Parent Company had an operating profit of SEK -2 m (-3), including administrative expenses of SEK -67 m (-33) and other operating income of SEK 65 m (29), of which the full amount relates to income from Group companies.
Net financial expenses totaled SEK 218 m (-636), including interest income from Group companies of SEK 196 m (205) and other financial income and expenses of SEK 22 m (-841).
Group contributions were SEK -564 m (-).
Result for the period amounted to SEK -308 m (-653).
Full year 2023
For the period, the Parent Company had an operating profit of SEK -6 m (-3), including administrative expenses of SEK -235 m (-228) and other operating income of SEK 229 m (225), of which the full amount relates to income from Group companies.
Net financial expenses totaled SEK -343 m (6), including interest income from Group companies of SEK 855 m (509) and other financial income and expenses of SEK -1,198 m (-503). Other financial income and expenses decreased mainly due to FX losses on intercompany receivables during 2023.
Group contributions were SEK - m (-).
Result for the period amounted to SEK -320 m (-11).
For further information, please refer to the Parent Company's condensed financial statements on page 14.
ANNUAL GENERAL MEETING 2024
Dometic Group's Annual General Meeting will be held on April 11, 2024, in Stockholm.
NOMINATION COMMITTEE – ANNUAL GENERAL MEETING 2024
In accordance with the resolution adopted by the 2023 Annual General Meeting (AGM), the Nomination Committee ahead of the 2024 AGM shall be composed of the Chairman of the Board of Directors together with one representative from each of the three largest shareholders, based on the ownership structure at August 31, 2023. Further details about the Nomination Committee are available on the website. www.dometicgroup.com
PROPOSED DIVIDEND
For the 2023 full year, the Board of Directors proposes a cash dividend of SEK 1.90 (1.30) per share.
Solna, January 31, 2024
Juan Vargues President and CEO
REVIEW
This interim report has not been subject to review by the Dometic Group AB (publ)'s external auditor.
CONSOLIDATED INCOME STATEMENT
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Net sales | 5,327 | 6,172 | 27,775 | 29,764 |
| Cost of goods sold | -3,891 | -4,724 | -19,994 | -21,883 |
| Gross Profit | 1,436 | 1,448 | 7,781 | 7,880 |
| Sales expenses | -489 | -541 | -2,184 | -2,185 |
| Administrative expenses | -356 | -308 | -1,530 | -1,376 |
| Research and development expenses | -142 | -126 | -591 | -531 |
| Other operating income and expenses | 17 | -43 | -13 | 143 |
| Items affecting comparability | -73 | -32 | -167 | -532 |
| Amortization of acquisition-related intangible assets | -150 | -162 | -613 | -611 |
| Operating profit | 242 | 236 | 2,682 | 2,789 |
| Financial income | 86 | 20 | 168 | 45 |
| Financial expenses | -246 | -186 | -968 | -396 |
| Net financial expenses | -159 | -166 | -800 | -351 |
| Profit before tax | 83 | 70 | 1,883 | 2,438 |
| Taxes | -31 | -43 | -551 | -654 |
| Profit for the period | 51 | 27 | 1,332 | 1,784 |
| Profit for the period attributable to owners of the Parent Company | 51 | 27 | 1,332 | 1,784 |
| Earnings per share before and after dilution, SEK - Owners of the Parent Company | 0.16 | 0.09 | 4.17 | 5.58 |
| Average number of shares, million | 319.5 | 319.5 | 319.5 | 319.5 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Profit for the period | 51 | 27 | 1 332 | 1 784 |
| Other comprehensive income | ||||
| Items that will not be reclassified subsequently to profit or loss: | ||||
| Remeasurements of defined benefit pension plans, | ||||
| net of tax | -43 | -70 | 8 | 178 |
| -43 | -70 | 8 | 178 | |
| Items that may be reclassified subsequently to profit or loss: | ||||
| Cash flow hedges, net of tax | -17 | -48 | 3 | -73 |
| Gains/losses from hedges of net investments in foreign operations, net of tax | 594 | -647 | 156 | 573 |
| Exchange rate differences on translation of foreign operations | -2 799 | -896 | -1 507 | 2 289 |
| -2 222 | -1 590 | -1 348 | 2 788 | |
| Other comprehensive income for the period | -2 265 | -1 660 | -1 339 | 2 966 |
| Total comprehensive income for the period | -2 213 | -1 633 | -7 | 4 751 |
| Total comprehensive income for the period attributable to | ||||
| Owners of the Parent Company | -2 213 | -1 633 | -7 | 4 751 |
CONSOLIDATED BALANCE SHEET (IN SUMMARY)
| SEK m | Dec 31, 2023 | Sep 30, 2023 | Dec 31, 2022 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Goodwill and trademarks | 27,035 | 28,795 | 28,107 |
| Other intangible assets | 6,821 | 7,462 | 7,580 |
| Tangible assets | 2,494 | 2,541 | 2,540 |
| Right-of-use assets | 1,955 | 1,213 | 972 |
| Deferred tax assets | 718 | 513 | 513 |
| Other non-current assets | 181 | 183 | 168 |
| Total non-current assets | 39,204 | 40,707 | 39,879 |
| Current assets | |||
| Inventories | 7,327 | 7,751 | 9,314 |
| Trade receivables | 2,311 | 3,083 | 2,807 |
| Current tax assets | 127 | 117 | 109 |
| Derivatives, current | 21 | 57 | 147 |
| Other current receivables | 533 | 532 | 506 |
| Prepaid expenses and accrued income | 248 | 250 | 289 |
| Cash and cash equivalents | 4,348 | 4,633 | 4,399 |
| Total current assets | 14,915 | 16,423 | 17,572 |
| TOTAL ASSETS | 54,119 | 57,130 | 57,451 |
| EQUITY AND LIABILITIES | |||
| EQUITY | 25,992 | 28,205 | 26,415 |
| LIABILITIES | |||
| Non-current liabilities | |||
| Liabilities to credit institutions, non-current | 16,335 | 17,066 | 15,304 |
| Deferred tax liabilities | 2,952 | 3,178 | 3,113 |
| Other non-current liabilities | - | - | 90 |
| Leasing liabilities, non-current | 1,716 | 966 | 740 |
| Provisions for pensions | 517 | 494 | 528 |
| Other provisions, non-current | 237 | 232 | 255 |
| Total non-current liabilities | 21,755 | 21,937 | 20,030 |
| Current liabilities | |||
| Liabilities to credit institutions, current | - | - | 3,339 |
| Trade payables | 2,568 | 2,738 | 2,978 |
| Current tax liabilities | 160 | 238 | 296 |
| Advance payments from customers | 37 | 70 | 47 |
| Leasing liabilities, current | 388 | 379 | 351 |
| Derivatives, current | 134 | 116 | 111 |
| Other provision, current | 412 | 497 | 594 |
| Other current liabilities* | 1,266 | 1,417 | 1,919 |
| Accrued expenses and prepaid income | 1,407 | 1,533 | 1,371 |
| Total current liabilities | 6,372 | 6,988 | 11,007 |
| TOTAL LIABILITIES | 28,128 | 28,925 | 31,037 |
| TOTAL EQUITY AND LIABILITIES | 54,119 | 57,130 | 57,451 |
* As from Sep 30, 2022 Other current liabilities includes short-term deferred considerations not yet paid.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (IN SUMMARY)
| FY | FY | |
|---|---|---|
| SEK m | 2023 | 2022 |
| Opening balance for the period | 26,415 | 22,447 |
| Profit for the period | 1,332 | 1,784 |
| Other comprehensive income for the period | -1,339 | 2,966 |
| Total comprehensive income for the period | -7 | 4,751 |
| Transactions with owners | ||
| Dividend paid to shareholders of the Parent Company | -415 | -783 |
| Total transactions with owners | -415 | -783 |
| Closing balance for the period | 25,992 | 26,415 |
CONSOLIDATED STATEMENT OF CASH FLOW
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Cash flow from operating activities | ||||
| Operating profit | 242 | 236 | 2,682 | 2,789 |
| Adjustment for non-cash items | ||||
| Depreciation and amortization | 393 | 401 | 1,525 | 1,477 |
| Other non-cash items | -187 | -184 | -13 | 421 |
| Changes in working capital | ||||
| Changes in inventories | -37 | 310 | 1,826 | -1,247 |
| Changes in trade receivables | 630 | 788 | 444 | 231 |
| Changes in trade payables | -25 | -71 | -328 | -609 |
| Changes in other working capital* | -250 | -140 | -304 | -200 |
| Income tax paid | -395 | -415 | -979 | -991 |
| Net cash flow from operations | 370 | 924 | 4,854 | 1,869 |
| Cash flow from investments | ||||
| Acquisition of operations, net of cash acquired* | -14 | -194 | -539 | -847 |
| Investments in fixed assets | -278 | -222 | -628 | -593 |
| Proceeds from sale of fixed assets | 4 | 1 | 7 | 4 |
| Other investing activities | -2 | 5 | -5 | 10 |
| Net cash flow from investments | -289 | -410 | -1,165 | -1,426 |
| Cash flow from financing | ||||
| Borrowings from credit institutions | - | - | 3,478 | 1,000 |
| Repayment of loans to credit institutions | - | - | -5,754 | - |
| Payment of lease liabilities related to lease agreements | -85 | -98 | -355 | -343 |
| Paid interest | -185 | -73 | -922 | -492 |
| Received interest | 83 | - | 160 | 3 |
| Other financing activities | -114 | -12 | 123 | 45 |
| Dividend paid to shareholders of the Parent Company | -0 | - | -415 | -783 |
| Net cash flow from financing | -301 | -183 | -3,685 | -570 |
| Cash flow for the period | -220 | 331 | 4 | -127 |
| Cash and cash equivalents at beginning of period | 4,633 | 4,093 | 4,399 | 4,408 |
| Exchange differences on cash and cash equivalents | -65 | -25 | -55 | 117 |
| Cash and cash equivalents at end of period | 4,348 | 4,399 | 4,348 | 4,399 |
*As from Q4 2022 the cash flow effect from paid deferred considerations is classified within Cash flow from investments on row Acquisition of operations, net of cash acquired.
PARENT COMPANY INCOME STATEMENT
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Administrative expenses | -67 | -33 | -235 | -228 |
| Other operating income | 65 | 29 | 229 | 225 |
| Operating profit | -2 | -3 | -6 | -3 |
| Interest income from Group companies | 196 | 205 | 855 | 509 |
| Interest expenses to Group companies | - | - | - | - |
| Other financial income and expenses | 22 | -841 | -1,198 | -503 |
| Net financial expenses | 218 | -636 | -343 | 6 |
| Group contributions | -564 | - | - | - |
| Result before tax | -349 | -639 | -349 | 3 |
| Taxes | 41 | -14 | 29 | -14 |
| Result for the period | -308 | -653 | -320 | -11 |
| Other comprehensive income | - | - | - | - |
| Total comprehensive income | -308 | -653 | -320 | -11 |
PARENT COMPANY BALANCE SHEET (IN SUMMARY)
| SEK m | Dec 31, 2023 | Sep 30, 2023 | Dec 31, 2022 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Shares in subsidiaries | 16,228 | 16,228 | 16,228 |
| Other non-current assets | 6,123 | 6,575 | 12,521 |
| Total non-current assets | 22,351 | 22,803 | 28,749 |
| Current assets | |||
| Current assets | 5,740 | 6,268 | 2,462 |
| Total current assets | 5,740 | 6,268 | 2,462 |
| TOTAL ASSETS | 28,091 | 29,071 | 31,212 |
| EQUITY | 11,325 | 11,633 | 12,060 |
| PROVISIONS | |||
| Provisions | 107 | 99 | 104 |
| Total provisions | 107 | 99 | 104 |
| LIABILITIES | |||
| Non-current liabilities | |||
| Non-current liabilities | 16,335 | 17,066 | 15,304 |
| Total non-current liabilities | 16,335 | 17,066 | 15,304 |
| Current liabilities | |||
| Current liabilities | 324 | 274 | 3,745 |
| Total current liabilities | 324 | 274 | 3,745 |
| TOTAL LIABILITIES | 16,766 | 17,439 | 19,152 |
| TOTAL EQUITY AND LIABILITIES | 28,091 | 29,071 | 31,212 |
CONDENSED NOTES
NOTE 1 | ACCOUNTING PRINCIPLES
Dometic Group AB (publ) and its subsidiaries (together "the Dometic Group", "Dometic" or "the Group") applies International Financial Reporting Standards (IFRS), as endorsed by the European Union. This consolidated Interim Financial Report has been prepared in accordance with IAS 34 'Interim Financial Reporting'.
The accounting and valuation principles in this interim report correspond to principles applied by the Group in the 2022 Annual and Sustainability Report and should be read in conjunction with that Annual and Sustainability Report, available at www.dometicgroup.com.
The Swedish Annual Accounts Act and RFR 2 Accounting for Legal Entities, issued by the Swedish Financial Reporting Board, have been applied for the Parent Company. The interim report comprises pages 1–22 and pages 1–14 are thus an integral part of this financial report (IAS 34.16A).
Totals quoted in tables and statements may not always be the exact sum of the individual items because of rounding differences. The aim is for each line item to correspond to its source, and rounding differences may therefore arise.
New or amended accounting policies for 2023 adopted by the Group
A detailed description of the accounting and valuation principles for new or amended accounting policies for 2023 applied by the Group in this interim report can be found in Note 2.1.1 Changes in accounting policies, New or amended accounting policies for 2023, of the 2022 Annual and Sustainability Report available at www.dometicgroup.com.
NOTE 2 | RISKS AND UNCERTAINTIES
Risks are part of any business and as a global Group with production and distribution all over the world Dometic faces risks that can impact its ability to achieve established strategic and other objectives, including financial targets. Effective risk
management of strategic, execution, compliance & regulatory and reporting risks creates opportunities and effective risk mitigation. Dometic's risks and risk management are described on pages 63- 67 and on pages 94-97 in the 2022 Annual and Sustainability Report, available at www.dometicgroup.com.
As communicated before, ACON, the seller of Igloo, has filed a lawsuit against Dometic in the fourth quarter 2022, making certain claims related to the Stock Purchase Agreement ("SPA").
Dometic is confident that the lawsuit lacks any merit, is vehemently contesting this lawsuit and has filed counterclaims against ACON related to its conduct under, and non-compliance with, the SPA. The parties are currently involved in the discovery process and trial is expected to take place in the first quarter, 2025.
Dometic continues to follow the development in Ukraine as well as in neighbouring countries and will take necessary actions needed to protect Group including its employees and assets. Dometic has stopped all business activities in Russia. Dometic also follows the development in Israel Gaza as well as in neighbouring countries and the impact it might have on Dometic's business operations.
NOTE 3 | FINANCIAL INSTRUMENTS
The Group uses currency forward contracts to hedge part of its exposure to forecasted purchases and sales in foreign currency as well as to hedge receivables and payables in foreign currency.
The fair values of Dometic's derivative assets and liabilities were SEK 21 m (147) and SEK 134 m (111). The value of derivatives is based on published prices in an active market. No transfers between levels of the fair value hierarchy have occurred during the period.
For financial assets and liabilities other than derivatives, fair value is assumed to be equal to the carrying amount.
TABLE TO NOTE 3 – FINANCIAL INSTRUMENTS
| Financial | Financial | ||||
|---|---|---|---|---|---|
| Balance sheet instruments at |
instruments at | Derivatives used | |||
| Dec 31, 2023 | carrying amount | amortized cost | fair value | for hedging | |
| Per category | |||||
| Derivatives | 21 | - | 3 | 18 | |
| Financial assets | 7 373 | 7 373 | - | - | |
| Total financial assets | 7 394 | 7 373 | 3 | 18 | |
| Derivatives | 134 | - | 100 | 33 | |
| Financial liabilities | 20 169 | 19 233 | 936 | - | |
| Total financial liabilities | 20 303 | 19 233 | 1 036 | 33 |
NOTE 4 | SEGMENT INFORMATION
CONSOLIDATED OPERATING SEGMENTS
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Net sales, external | ||||
| Americas | 951 | 1 192 | 5 003 | 6 780 |
| EMEA | 1 498 | 1 602 | 7 981 | 7 970 |
| APAC | 580 | 586 | 2 138 | 2 231 |
| Marine | 1 447 | 1 651 | 6 719 | 6 695 |
| Global | 851 | 1 142 | 5 934 | 6 086 |
| Total net sales, external | 5 327 | 6 172 | 27 775 | 29 764 |
| Operating profit (EBITA) before items affecting comparability | ||||
| Americas | -57 | -60 | -104 | 330 |
| EMEA | 5 | -62 | 723 | 838 |
| APAC | 152 | 129 | 557 | 555 |
| Marine | 313 | 422 | 1 654 | 1 743 |
| Global | 53 | 1 | 633 | 464 |
| Total operating profit (EBITA) before items affecting comparability | 465 | 430 | 3 463 | 3 931 |
| Operating profit (EBITA) before items affecting comparability % | ||||
| Americas | -6,0% | -5,1% | -2,1% | 4,9% |
| EMEA | 0,3% | -3,8% | 9,1% | 10,5% |
| APAC | 26,2% | 22,0% | 26,0% | 24,9% |
| Marine | 21,6% | 25,5% | 24,6% | 26,0% |
| Global | 6,2% | 0,1% | 10,7% | 7,6% |
| Total operating profit (EBITA) before items affecting comparability % | 8,7% | 7,0% | 12,5% | 13,2% |
| Amortization of acquisition-related intangible assets | ||||
| Americas | -26 | -31 | -111 | -118 |
| EMEA | -17 | -19 | -73 | -74 |
| APAC | -4 | -5 | -19 | -21 |
| Marine | -53 | -54 | -210 | -202 |
| Global | -50 | -52 | -200 | -196 |
| Total amortization of acqusition-related intangible assets | -150 | -162 | -613 | -611 |
| Items affecting comparability | ||||
| Americas | -3 | -5 | -11 | -151 |
| EMEA | -63 | -24 | -131 | -370 |
| APAC | -1 | -0 | -4 | -4 |
| Marine | 0 | -0 | 0 | -1 |
| Global | -7 | -2 | -22 | -7 |
| Total items affecting comparability | -73 | -32 | -167 | -532 |
| Operating profit (EBIT) | ||||
| Americas | -86 | -97 | -226 | 61 |
| EMEA | -75 | -105 | 519 | 394 |
| APAC | 147 | 124 | 534 | 531 |
| Marine | 260 | 368 | 1 444 | 1 541 |
| Global | -4 | -52 | 411 | 262 |
| Total operating profit (EBIT) | 242 | 236 | 2 682 | 2 789 |
| Operating profit (EBIT) % | ||||
| Americas | -9,0% | -8,1% | -4,5% | 0,9% |
| EMEA | -5,0% | -6,6% | 6,5% | 4,9% |
| APAC | 25,3% | 21,1% | 25,0% | 23,8% |
| Marine | 18,0% | 22,3% | 21,5% | 23,0% |
| Global | -0,4% | -4,6% | 6,9% | 4,3% |
| Total operating profit (EBIT) % | 4,5% | 3,8% | 9,7% | 9,4% |
| Financial income | 86 | 20 | 168 | 45 |
| Financial expenses | -246 | -186 | -968 | -396 |
| Taxes | -31 | -43 | -551 | -654 |
| Profit for the period | 51 | 27 | 1 332 | 1 784 |
NET SALES BY APPLICATION AREAS
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Segment Americas | ||||
| Food & Beverage | 172 | 241 | 895 | 1,494 |
| Climate | 390 | 513 | 2,139 | 2,970 |
| Power & Control | 152 | 189 | 769 | 1,032 |
| Other applications | 237 | 249 | 1,201 | 1,284 |
| Segment Americas net sales, external | 951 | 1,192 | 5,003 | 6,780 |
| Segment EMEA | ||||
| Food & Beverage | 452 | 521 | 2,884 | 2,871 |
| Climate | 805 | 768 | 3,838 | 3,763 |
| Power & Control | 158 | 223 | 830 | 925 |
| Other applications | 83 | 89 | 429 | 412 |
| Segment EMEA net sales, external | 1,498 | 1,602 | 7,981 | 7,970 |
| Segment APAC | ||||
| Food & Beverage | 272 | 267 | 853 | 919 |
| Climate | 186 | 177 | 736 | 734 |
| Power & Control | 86 | 106 | 404 | 431 |
| Other applications | 36 | 35 | 146 | 147 |
| Segment APAC net sales, external | 580 | 586 | 2,138 | 2,231 |
| Segment Marine | ||||
| Food & Beverage | 36 | 47 | 174 | 217 |
| Climate | 335 | 346 | 1,520 | 1,262 |
| Power & Control | 783 | 975 | 3,843 | 3,939 |
| Other applications | 294 | 284 | 1,182 | 1,278 |
| Segment Marine net sales, external | 1,447 | 1,651 | 6,719 | 6,695 |
| Segment Global | ||||
| Food & Beverage | 830 | 1,125 | 5,837 | 6,009 |
| Climate | 1 | 1 | 5 | 4 |
| Power & Control | 0 | 0 | 1 | 3 |
| Other applications | 20 | 16 | 92 | 71 |
| Segment Global net sales, external | 851 | 1,142 | 5,934 | 6,086 |
| Net sales, external | ||||
| Food & Beverage | 1,762 | 2,201 | 10,642 | 11,509 |
| Climate | 1,717 | 1,805 | 8,237 | 8,732 |
| Power & Control | 1,179 | 1,493 | 5,846 | 6,331 |
| Other applications | 670 | 673 | 3,050 | 3,191 |
| Total net sales, external | 5,327 | 6,172 | 27,775 | 29,764 |
Inter-segment sales were as follows.
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Segment Americas | 47 | 39 | 213 | 170 |
| Segment EMEA | 51 | 58 | 236 | 340 |
| Segment APAC | 504 | 589 | 2,457 | 3,316 |
| Segment Marine | 6 | 9 | 31 | 49 |
| Segment Global | - | - | - | - |
| Eliminations | 608 | 696 | 2,937 | 3,875 |
NOTE 5 | NET SALES BY SALES CHANNEL
| Q4 | Q4 | Change (%) | FY | FY | Change (%) | |||
|---|---|---|---|---|---|---|---|---|
| SEK m | 2023 | 2022 | Reported | Organic⁽¹⁾ | 2023 | 2022 | Reported | Organic⁽¹⁾ |
| Net sales, external | ||||||||
| OEM | 2,581 | 2,997 | -14% | -14% | 11,859 | 13,034 | -9% | -14% |
| Distribution | 1,228 | 1,592 | -23% | -20% | 8,238 | 8,688 | -5% | -10% |
| Service & Aftermarket | 1,518 | 1,583 | -4% | -3% | 7,679 | 8,041 | -5% | -10% |
| Total net sales, external | 5,327 | 6,172 | -14% | -13% | 27,775 | 29,764 | -7% | -12% |
⁽¹⁾Net sales growth excluding acquisitions/divestments and currency translation effects.
NOTE 6 | ITEMS AFFECTING COMPARABILITY
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Global restructuring program | -68 | -20 | -142 | -499 |
| Other | -5 | -13 | -25 | -33 |
| Total | -73 | -32 | -167 | -532 |
The table below specifies items affecting comparability by function and other operating income and expenses.
| Global restructuring program | Q4 | Q4 | FY | FY |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Cost of goods sold | -45 | -5 | -107 | -476 |
| Sales expenses | -19 | - | -27 | -3 |
| Administrative expenses | -3 | -6 | -5 | -8 |
| Research and development expenses | -0 | -11 | -0 | -11 |
| Other operating income and expenses | -0 | 2 | -2 | -2 |
| Total | -68 | -20 | -142 | -499 |
| Other | Q4 | Q4 | FY | FY |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Cost of goods sold | -0 | - | -1 | - |
| Sales expenses | 1 | -3 | 3 | -21 |
| Administrative expenses | - | -1 | - | -1 |
| Research and development expenses | - | - | - | - |
| Other operating income and expenses | -6 | -9 | -28 | -11 |
| Total | -5 | -13 | -25 | -33 |
| Total | Q4 | Q4 | FY | FY |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Cost of goods sold | -45 | -5 | -108 | -476 |
| Sales expenses | -19 | -3 | -24 | -24 |
| Administrative expenses | -3 | -7 | -5 | -8 |
| Research and development expenses | -0 | -11 | -0 | -11 |
| Other operating income and expenses | -6 | -8 | -30 | -13 |
| Total | -73 | -32 | -167 | -532 |
NOTE 7 | AMORTIZATION OF ACQUISITION-RELATED INTANGIBLE ASSETS BY FUNCTION
The table below
| Amortization of | Amortization | ||||||
|---|---|---|---|---|---|---|---|
| Customer | of | ||||||
| Amortization | Relationship | Amortization | Intellectual | ||||
| SEK m | Trademarks | Assets | of Technology | Property | Total | ||
| Cost of goods sold | |||||||
| Q4 | 2023 | - | - | -18 | -1 | -19 | |
| Q4 | 2022 | - | - | -19 | -0 | -20 | |
| FY | 2023 | - | - | -73 | -3 | -77 | |
| FY | 2022 | - | - | -74 | -1 | -75 | |
| Sales expenses | |||||||
| Q4 | 2023 | -14 | -117 | - | - | -131 | |
| Q4 | 2022 | -24 | -118 | - | - | -142 | |
| FY | 2023 | -71 | -465 | - | - | -537 | |
| FY | 2022 | -91 | -444 | - | - | -535 | |
| Total Amortization of acquisition-related intangible assets | |||||||
| Q4 | 2023 | -14 | -117 | -18 | -1 | -150 | |
| Q4 | 2022 | -24 | -118 | -19 | -0 | -162 | |
| FY | 2023 | -71 | -465 | -73 | -3 | -613 | |
| FY | 2022 | -91 | -444 | -74 | -1 | -611 |
specifies amortization of acquisition-related intangible assets by function and other operating income and expenses.
NOTE 8 | ADJUSTED EARNINGS PER SHARE
Specification of Adjusted earnings per share. Adjusted earnings per share excludes the impact from amortization of acquisition-related intangible assets and items affecting comparability.
| Q4 | Q4 | FY | FY | |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Profit before tax, reported | 83 | 70 | 1,883 | 2,438 |
| A) Adjustment for amortization of acquisition-related intangible assets | 150 | 162 | 613 | 611 |
| B) Adjustment for items affecting comparability | 73 | 32 | 167 | 532 |
| Profit before tax, adjusted | 306 | 264 | 2,663 | 3,581 |
| Taxes, reported | -31 | -43 | -551 | -654 |
| Taxes, adjustment for A) and B) | -61 | -49 | -218 | -270 |
| Profit for the period, adjusted | 214 | 172 | 1,895 | 2,658 |
| Average number of shares, million | 319.5 | 319.5 | 319.5 | 319.5 |
| Earnings per share, adjusted | 0.67 | 0.54 | 5.93 | 8.32 |
NOTE 9 | NET DEBT TO EBITDA LEVERAGE RATIO
Specification of Net debt to EBITDA leverage ratio.
| SEK m | Dec 31, 2023 | Sep 30, 2023 | Dec 31, 2022 |
|---|---|---|---|
| Liabilities to credit institutions, non-current | 16,335 | 17,066 | 15,304 |
| Liabilities to credit institutions, current | -0 | - | 3,339 |
| Add back capitalized transaction costs | 43 | 47 | 41 |
| Liabilities to credit institutions excluding capitalized transaction costs | 16,377 | 17,113 | 18,683 |
| Total cash and cash equivalents | -4,348 | -4,633 | -4,399 |
| Net Debt* | 12,029 | 12,480 | 14,284 |
| EBITDA before items affecting comparability (i.a.c) LTM | 4,374 | 4,335 | 4,797 |
| EBITDA Acquisitions proforma LTM | - | - | 10 |
| EBITDA before i.a.c. incl acquisitions proforma LTM | 4,374 | 4,335 | 4,807 |
| Net debt to EBITDA leverage ratio | 2.7x | 2.9x | 3.0x |
*Net debt excluding provision for pension and accrued interest
NOTE 10 | RIGHT-OF-USE ASSETS
Right-of-use assets information is specified below:
| Depreciation & amortization | Q4 | Q4 | FY | FY |
|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 |
| Depreciation and amortization | -393 | -401 | -1,525 | -1,477 |
| Add back depreciation related to right-of-use | ||||
| assets | 101 | 99 | 381 | 338 |
| Total | -292 | -302 | -1,143 | -1,138 |
| Dec | Dec | |||
| Right-of-use assets | 31, | 31, | ||
| SEK m | 2023 | 2022 | ||
| Buildings | 1,902 | 903 | ||
| Machinery, equipment and other technical installations | 53 | 68 | ||
| Total | 1,955 | 972 |
NOTE 11 | TRANSACTIONS WITH RELATED PARTIES
No transactions between Dometic and related parties that have significantly affected the company's position and earnings took place during 2023.
NOTE 12 | ACQUISITIONS AND DIVESTMENTS
2023
Dometic has not made any acquisitions or divestments during the year.
Effect on group cash flow
As from Q4 2022 the cash flow effect from paid deferred considerations is classified within Cash flow from investments on row "Acquisition of operations, net of cash acquired". Cash flow effects from paid deferred consideration on previous acquisitions amounts SEK -539 m for 2023 full year.
2022
Acquisitions during the year
The purchase price allocation of Cadac International, NDS Energy and Treeline Capital are considered to be final.
| Date of | Included and | Previous year | Number of | ||
|---|---|---|---|---|---|
| Acquisition | announcement | controlled from Segment | net sales⁽¹⁾ | employees⁽¹⁾ | |
| Cadac International 16 Sept, 2021 4 Jan, 2022 | EMEA | 17 MEUR | 40 | ||
| NDS Energy | 11 Nov, 2021 1 Feb, 2022 | EMEA | 11 MUSD | 25 | |
| Treeline Capital LLC 2 Mar, 2022 | 2 Mar, 2022 | Marine 16 MUSD | 70 |
⁽¹⁾Årlig nettoomsättning och antal anställda enligt pressrelease vid tillkännagivandet.
Effect on group cash flow Effect on group cash flow amounted to SEK -653 m for 2022.
See the Annual and Sustainability Report 2022 note 29 for details on acquisitions completed in 2022.
NOTE 13 | SIGNIFICANT EVENTS AFTER THE PERIOD
Todd Seyfert joined Dometic on January 9, 2024 as new President for segment Americas.
Dometic is planning to have a new segment reporting structure with six reporting segments starting from the first quarter 2024 reporting:
-The Igloo business and other Dometic branded Mobile cooling and drinkware businesses will be consolidated into a new segment named Mobile Cooling Solutions.
-Segment Global is renamed to segment Global Ventures. Other Global Verticals remains as a subsegment. Dometics offering of Mobile Power Solutions will be consolidated globally and will be a new subsegment in segment Global Ventures.
-The product solutions for the RV and CPV industries will be consolidated in the three land vehicle segments of Americas, APAC and EMEA. This includes both the OEM and the Service & Aftermarket business, as well as other Outdoor standalone products for land based outdoor activities. The Mobile Power Solutions businesses in the three land vehicle segments will be reported in segment Global Ventures.
-Segment Marine remain as a separate segment. The Mobile Power Solutions business in segment Marine will be reported in segment Global Ventures.
There have been no other significant events that have impacted the financial reporting after the balance sheet date.
RECONCILIATION OF NON-IFRS MEASURES TO IFRS (ALTERNATIVE PERFORMANCE MEASURES)
Dometic presents some financial measures in this interim report, which are not defined by IFRS. Dometic believes that these measures provide valuable additional information to investors and management for evaluating the Group's financial performance, financial position and trends in the operations. It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies. These non-IFRS measures should not be considered as substitutes for financial reporting measures prepared in accordance with IFRS. See Dometic's website www.dometicgroup.com for the detailed reconciliation.
| Adjusted earnings per share |
Net profit for the period, excluding the impact from amortization of acquisition-related intangible assets and items affecting comparability, divided by average number of shares. See note 8. |
|---|---|
| Core working capital | Consists of inventories and trade receivables less trade payables. |
| EBITDA and EBITDA margin Operating profit (EBIT) before Depreciation and Amortization. Depreciation also includes depreciation of right-of use assets in accordance with IFRS 16 Leases. Divided by net sales gives corresponding margin |
|
| EBITA and EBITA margin | Operating profit (EBIT) before Amortization of acquisition-related intangible assets. Divided by net sales gives corresponding margin. |
| EBITA bef i.a.c. and EBITA bef i.a.c. margin |
Operating profit (EBIT) before Amortization of acquisition-related intangible assets and items affecting comparability. Divided by net sales gives corresponding margin |
| Net debt | Total borrowings including provisions for pensions, accrued interest and capitalized transaction costs, less cash and cash equivalents. |
| Net debt to EBITDA leverage ratio |
Net debt excluding provisions for pensions, accrued interest and capitalized transaction costs in relation to last twelve months EBITDA before items affecting comparability and including acquisitions proforma. Any cash deposits with tax authorities are treated as cash in the leverage calculation. See note 9. |
| Operating cash flow | Cash flow from operations after investments in fixed assets excluding income tax paid. Paid interest/received interest is part of net cash flow from financing. |
| Organic growth | Net sales growth excluding acquisitions/divestments and currency translation effects. Quarters are calculated at comparable currency, applying the latest period average rate. |
| RoOC – Return on Operating Capital |
Operating profit (EBIT) for the four previous quarters, divided by the average operating capital for the previous four quarters, excluding goodwill and trademarks. |
DEFINITIONS AND KEY RATIOS
| Capital expenditure | Expenses related to the purchase of tangible and intangible assets. | |
|---|---|---|
| CO2 ton / net sales SEK m | CO2 emissions from own operations (scope 1 and 2) divided by currency adjusted net sales. Rolling 12 months with one month delay in reporting. Scope 1 = energy from fuel combustion used at operation sites (factories, warehouses, distribution centers), Scope 2 = electricity and district heating used at operation sites. Excludes acquisitions made in 2021 and 2022. |
|
| CPV | Commercial and Passenger Vehicles. | |
| EPS – Earnings per share | Net profit for the period divided by average number of shares. | |
| FY 2022 and 2023 | Full Year. January to December 2022 and 2023 for Income statement. | |
| i.a.c. – items affecting comparability |
Items affecting comparability are events or transactions with significant financial effects, which are relevant for understanding the financial performance when comparing profit for the current period with previous periods. Items included are for example restructuring programs, expenses related to major revaluations, gains and losses from acquisitions or disposals of subsidiaries, or transaction costs related to major mergers and acquisitions. |
|
| Interest-bearing debt | Liabilities to credit institutions plus liabilities to related parties plus provisions for pensions. | |
| LTIFR | Lost Time Injury Frequency Rate. Work related accidents with lost time >=1 day per million working hours. Rolling twelve months with 1 months delay in reporting. Excludes acquisitions made in 2021 and 2022. |
|
| LTM | Last twelve months. | |
| Net profit | Profit (loss) for the period. | |
| OCI | Other Comprehensive Income. | |
| OEM | Original Equipment Manufacturers. | |
| Operating capital excluding goodwill and trademarks |
Interest-bearing debt plus equity less cash and cash equivalents, excluding goodwill and trademarks. | |
| Operating profit (EBIT) and corresponding margin |
Operating profit (EBIT) before financial items and taxes. Divided by net sales gives corresponding margin. | |
| Q4 2023 and Q4 2022 | October to December 2023 and 2022 for Income Statement. | |
| RV | Recreational Vehicles. | |
| Share of female managers | Percentage of female managers in the company at the end of each period. Excludes acquisitions made in 2021 and 2022. During 2022 there was a delay of one quarter in the reporting of actual results, this has been adjusted. |
|
| Share of new suppliers being ESG audited |
Percentage of new significant direct material suppliers that have been ESG audited (on-site, remote or 3rd party audits), with one month delay in reporting. Measuring period to be included as a new supplier is January 1, 2022 until end of 2024. Excludes acquisitions made in 2021 and 2022. |
|
| Working capital | Core working capital plus other current assets less other current liabilities and provisions relating to operations. | |
| YTD 2023 and 2022 | January-December 2023 and 2022 for Income Statement |
PRESENTATION OF THE REPORT
Analysts and media are invited to participate in a telephone conference at 10.00 (CET), January 31 , 2024, during which President and CEO, Juan Vargues and CFO, Stefan Fristedt, will present the report and answer questions. To participate in the webcast/telephone conference, please dial in five minutes prior to the start of the conference call. The webcast URL and presentation are available at www.dometicgroup.com.
Webcast link:
https://dometic.videosync.fi/2024-01-31-q4-2023/register
To participate in conference call to ask questions
Those who wish to participate in the conference call to ask questions in connection with the webcast are welcome to register on the link below. After the registration you will be provided phone numbers and a conference ID to access the conference. Registration link:
https://events.inderes.se/teleconference/?id=100391
FOR FURTHER INFORMATION, PLEASE CONTACT
Rikard Tunedal Head of Investor Relations Phone: +46 730 56 97 35 E-mail: [email protected]
Dometic Group AB (publ)
Hemvärnsgatan 15 SE-171 54 Solna, Sweden Phone: +46 8 501 025 00 www.dometic.com Corporate registration number 556829-4390
This information is information that Dometic Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CET on January 31, 2024.
This document is a translation of the Swedish version of the interim report. In the event of any discrepancy, the Swedish wording shall prevail.
ABOUT DOMETIC
Dometic is a global market leader in the mobile living industry. Millions of people around the world use Dometic products in Outdoor, Residential, and Professional applications. Our motivation is to create smart, sustainable, and reliable products with outstanding design for an outdoor and mobile lifestyle in the areas of Food & Beverage, Climate, Power & Control, and Other Applications. Dometic employs approximately 8,000 people worldwide, had net sales of SEK 27.8 billion in 2023 and is headquartered in Solna, Sweden.
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 of business and operating initiatives, (c) changes in the regulatory environment and other government actions, (d) fluctuations in exchange rates and (e) business risk management.
FINANCIAL CALENDAR
| April 11, 2024 | Annual General Meeting. The 2023 Annual and Sustainability |
|---|---|
| report will be published week 12, 2024 | |
| April 19, 2024 | Interim report for the first quarter 2024 |
| July 18, 2024 | Interim report for the second quarter 2024 |
| October 23, 2024 | Interim report for the third quarter 2024 |