Investor Presentation • Nov 9, 2022
Investor Presentation
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Source: Company Information and estimates as of 9M 2022. 1Backlog as of 9M 2022. 2Refers to order secured by tk nucera as of October-2022 that are contracted under the toll manufacturing agreement but not yet converted into an order for De Nora. 3 Roland Berger assuming 45-65% load factor
◼ Strong Revenue growth of +50.8% (+€118m) driven by volume (–60%) from new projects in both Chloralkali (specifically HCI) and Electrowinning business lines and price increase (–40%) for indexation to noble metals
© 2022 De Nora WE ARE DE NORA
◼ All-time high backlog as of 9M 2022 (€646.4m, +18.2% vs. Full Year 2021 results)
◼ Benefits from multi-year contracts and recurrent aftermarket
◼ Confirming further Backlog rampup
© 2022 De Nora WE ARE DE NORA
*Net of non recurring costs: 1)COGS: €0.3m in 9M2021; €0.1m in 9M2022; 2)SG&A: €2.6m in 9M2021; €0.4m in 9M2022; 3) Corporate: €0.5m in 9M2021; €23.3m in 9M2022 (o/w €19.4m Management Incentive Plan and €3.5m IPO costs)
Key highlights
Key highlights
◼ Surge in profitability driven by: (i) revenue growth exploiting operating leverage effect and (ii) continuous control of fixed costs
◼ Strong increase in profitability mainly driven by gross margin improvement and volume growth for Pools, partially offset by higher opex (labour costs, selling costs and G&A)
◼ Positive at Gross Margin Level Slightly Negative Ebitda mainly due to R&D costs (€ 6mn)
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1Includes Energy Transition for 9M 2021.
(€m)
| (€m) | 2021 | 9M 2022 |
|---|---|---|
| Inventories | 233.0 | 326.2 |
| Contract WIP | 12.4 | 25.7 |
| Trade Receivables | 140.0 | 136.2 |
| Trade Payables | (61.4) | (72.9) |
| Other current assets and liabilities | (69.6) | (89.3) |
| Net Working Capital | 254.3 | 325.9 |
| Inventories % of sales | 37.8% | 39.5% |
DSO 65.0 72.0
DPO 46.0 47.0
1Of which: (i) Income taxes paid of €28.5m; (ii) Net Interest and Net other financial expense paid of €4,4m; (iii) Net Other €4,7m
Net Financial Position Evolution
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▪ Strong operating performance offsetting increase in NWC and resulting in a stable net
financial position vs FY2021 ▪ Cash flow from operating
capex and dividends
activities fully financed NWC,
▪ IPO Capital Increase drives to cash neutrality
$\overline{11}$
© 2022 De Nora
$12$
WE ARE DE NORA
| (€m) | 9M 2021 | 9M 2022 | Q1 2021 | Q1 2022 | Q2 2021 | Q2 2022 | Q3 2021 | Q3 2022 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 406.1 | 616.6 | 111.3 | 200.1 | 142.4 | 210.4 | 152.4 | 206.2 |
| Change in inventory of finished goods and work in progress | 40.9 | 37.9 | 11.5 | 6.8 | 4.0 | 7.7 | 25.4 | 23.4 |
| Other income | 2.6 | 3.3 | 0.6 | 1.6 | 1.3 | 0.9 | 0.7 | 0.7 |
| Costs for raw materials, consumables, supplies and goods, excluding utilization of provision |
(200.6) | (298.7) | (52.7) | (89.5) | (64.0) | (100.5) | (83.9) | (108.8) |
| Personnel expenses, excluding utilization of provision | (85.6) | (118.2) | (26.7) | (31.2) | (28.1) | (52.3) | (30.8) | (34.7) |
| Costs for services, excluding utilization of provision | (79.2) | (111.9) | (22.6) | (31.5) | (28.9) | (38.1) | (27.6) | (42.3) |
| Other operating expenses, excluding utilization of provision | (6.4) | (7.0) | (1.7) | (2.3) | (3.4) | (2.5) | (1.3) | (2.3) |
| EBITDA | 77.9 | 121.9 | 19.8 | 54.0 | 23.2 | 25.6 | 34.9 | 42.3 |
| Margin (%) | 19% | 20% | 18% | 27% | 16% | 12% | 23% | 21% |
| Amortization and depreciation | (19.5) | (20.5) | (6.3) | (6.8) | (6.5) | (6.8) | (6.7) | (6.9) |
| Reinstatement (write down) of property, plant and equipment | 0.2 | (2.8) | 0.0 | (0.2) | 0.1 | (2.8) | 0.1 | 0.3 |
| Net provision for risk and charges¹ | (0.9) | (1.3) | (0.1) | (0.3) | (0.3) | 0.2 | (0.5) | (1.2) |
| EBIT | 57.6 | 97.3 | 13.3 | 46.7 | 16.5 | 16.1 | 27.8 | 34.5 |
| Margin (%) | 14% | 16% | 12% | 23% | 12% | 8% | 18% | 17% |
| Share of profit of equity-accounted investees² | 4.0 | (4.2) | 1.0 | (6.3) | 2.4 | 0.8 | 0.7 | 1.3 |
| Finance income | 8.9 | 30.6 | 5.2 | 7.4 | 1.7 | 14.1 | 2.1 | 9.1 |
| Finance expenses | (10.9) | (26.4) | (4.5) | (6.1) | (3.4) | (11.7) | (3.0) | (8.6) |
| Profit before tax | 59.7 | 97.3 | 14.9 | 41.7 | 17.1 | 19.2 | 27.6 | 36.3 |
| Income tax expense | (17.4) | (33.4) | (4.4) | (15.2) | (4.1) | (6.1) | (8.8) | (12.1) |
| Profit for the period | 42.3 | 63.9 | 10.5 | 26.5 | 13.0 | 13.2 | 18.8 | 24.2 |
Source: Company Information. 1This item includes the utilization of provisions on the following Income Statement line items: Costs for raw materials, Consumables, supplies and goods, Personnel expenses, Costs for services, Other operating expenses 2Negative €4.2 m in 9M 2022 is made up as follows: € (4.0) m refer to a late adjustment in the net profit of tk nucera as of December 2021 that was communicated to De Nora after the approval of its FY 2021 consolidated financials, € (2.3) m refer to the P&L impact of the Preferred dividends distributed in March 2022 by tk nucera to its other shareholder thyssenkrupp Projekt 1 GmbH and € 2.1 m is the share of profit for the period January-June 2022 since financials as of September of tk nucera are not yet available.
© 2022 De Nora WE ARE DE NORA
| (€m) | 9M 2021 | 9M 2022 |
|---|---|---|
| Sales | 406.1 | 616.6 |
| EBITDA | 77.9 | 121.9 |
| Margin (%) | 19.2% | 19.8% |
| Costs relative DND fire | 1.5 | 0.0 |
| Terminations costs (labor + legal expenses) | 0.3 | 0.4 |
| Costs relative to IPO process | 3.5 | |
| Costs relative to M&A, integration, and company reorganization | 0.4 | 0.2 |
| Costs relative to startup of De Nora Tech, LLC – US plant |
0.5 | 0.2 |
| Costs relative to Covid-19 | 0.4 | |
| Advisory costs for special projects | 0.3 | |
| Management Incentive Plan | 19.4 | |
| Other non recurring costs | 0.4 | 0.0 |
| Adj. EBITDA | 81.4 | 145.9 |
| Margin (%) | 20.0% | 23.7% |
| (€m) | 2021 | 9M 2022 | |
|---|---|---|---|
| Intangible assets | 132.8 | 145.9 | |
| Property, plant and equipment | 167.6 | 180.8 | |
| Equity -accounted investees |
121.8 | 120.2 | |
| Fixed asset | 422.2 | 446.8 | |
| Inventories | 233.0 | 326.2 | |
| Contract work in progress, net of advances from customers | 12.4 | 25.7 | |
| Trade receivables | 140.0 | 136.2 | |
| Trade payables | (61.4) | (72.9) | |
| Operating working capital | 323.9 | 415.1 | |
| Other current assets and liabilities | (69.6) | (89.3) | |
| Net working capital | 254.3 | 325.9 | |
| Deferred tax assets | 29.4 | 27.6 | |
| Trade receivables | - | - | |
| Other receivables and non -current financial assets |
15.7 | 16.1 | |
| Employee benefits | (26.0) | (21.5) | |
| Provisions for risks and charges | (21.1) | (21.4) | |
| Deferred tax liabiliites | (29.3) | (28.7) | |
| Trade payables | (0.2) | (0.1) | |
| Income tax payables | (0.1) | - | |
| Other payables | (2.2) | (2.1) | |
| Other net non current asset and liablities | (33.7) | (30.0) | |
| Net invested capital | 642.8 | 742.7 | |
| Net current financial indebtedness | (184.1) | 273.4 | |
| Non -current financial indebtedness |
(3.8) | (274.0) | |
| Net financial indebtedness – ESMA |
(187.9) | (0.6) | |
| Fair value of financial instruments | (0.9) | (1.1) | |
| Net financial indebtedness – De Nora |
(188.8) | (1.7) | |
| Total Equity | (454.0) | (741.0) | |
| Total sources | (642.8) | (742.7) |
| (€m) | 9M 2022 | 9M 2021 |
|---|---|---|
| EBITDA | 121.9 | 77.9 |
| Losses on the sale of property, plant and equipment and intangible assets | 0.2 | 0.8 |
| Other non-monetary items | 16.8 | 0.4 |
| Cash flows generated by operating activities before changes in net working capital | 138.9 | 79.1 |
| Change in inventory | (80.5) | (130.8) |
| Change in trade receivables and construction contracts | 1.1 | (6.2) |
| Change in trade payables | 9.3 | 11.8 |
| Change in other receivables / payables | 8.7 | 8.0 |
| Cash flows generated by changes in net working capital | (61.4) | (117.2) |
| Cash flows generated by operating activities | 77.5 | (38.1) |
| Net Interest and Net other financial expense paid | (4.4) | (3.4) |
| Income taxes paid | (28.5) | (14.4) |
| Net cash flows generated by operating activities | 44.6 | (55.9) |
| Sales of property, plant and equipment and intangible assets | 0.5 | 0.7 |
| Investments in tangible and intangible assets | (29.2) | (17.4) |
| Investments in Associated companies (TK nucera Management AG) |
(0.0) | - |
| Acquisitions (net of cash acquired) | - | (6.4) |
| Net cash flows used in investing activities | (28.7) | (23.0) |
| Share capital increase | 196.6 | 18.1 |
| New loans / (Repayment) of loans | 13.6 | 105.7 |
| Increase (decrease) in other financial liabilities | (1.5) | (1.1) |
| (Increase) decrease in financial assets | (1.4) | 2.1 |
| Dividends paid | (20.0) | (60.0) |
| Net cash flows generated by financing activities | 187.3 | 64.8 |
| Net increase (decrease) in cash and cash equivalents | 203.2 | (14.1) |
| Opening cash and cash equivalents | 73.8 | 75.7 |
| Exchange rate gains / (losses) | 3.6 | 1.2 |
| Closing cash and cash equivalents | 280.6 | 62.8 |
The content of this presentation has a merely informative and provisional nature and does not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision in relation thereto.
The information contained in this presentation does not purport to be comprehensive and has not been independently verified by any independent third party.
Statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Past performance of De Nora Group cannot be relied on as a guide to future performance. Industrie De Nora makes no representation or warranty, whether expressed or implied, and no reliance should be placed on the fairness, accuracy, completeness, correctness or reliability of the information contained herein and/or discussed verbally.
This presentation contains forward-looking statements regarding future events and the future results of Industrie De Nora that are based on current expectations, estimates, forecasts, and projections about the industries in which Industrie De Nora operates and the beliefs and assumptions of the management of Industrie De Nora. In particular, among other statements, certain statements with regard to management objectives, trends in results of operations, margins, costs, return on equity, risk management are forward-looking in nature. Words such as 'expects', 'aims', 'forecasts', 'anticipates', 'targets', 'goals', 'projects', 'intends', 'plans', 'believes', 'seeks', 'estimates', variations of such words, and similar expressions (or their negative) are intended to identify such forwardlooking statements.
These forward-looking statements are subject to known and unknown risks, uncertainties, and assumptions that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. Many of these risks and uncertainties relate to factors that are beyond the company's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of regulators and other factors. Therefore, Industrie De Nora's actual results may differ materially and adversely from those expressed or implied in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, economic conditions globally, social, political, economic and regulatory developments or changes in economic or technological trends or conditions in Italy and internationally. Consequently, Industrie De Nora makes no representation, whether expressed or implied, as to the conformity of the actual results with those projected in the forward-looking statements. Any forward-looking statements made by or on behalf of Industrie De Nora speak only as of the date they are made. Industrie De Nora does not undertake to update forward-looking statements to reflect any changes in Industrie De Nora's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any further disclosures Industrie De Nora may make in documents it files with the Italian Securities and Exchange Commission and with the Italian Stock Exchange.
This presentation contains alternative performance indicators that are not recognized by IFRS. Different companies and analysts may calculate these non-IFRS measures differently, so making comparisons among companies on this basis should be done very carefully. These non-IFRS measures have limitations as analytical tools, are not measures of performance or financial condition under IFRS and should not be considered in isolation or construed as substitutes for operating profit or net profit as an indicator of our operations in accordance with IFRS.
Matteo Lodrini, in his position as manager responsible for the preparation of financial reports, certifies pursuant to paragraph 2, article 154-bis of the Legislative Decree n. 58/1998, that data and accounting information disclosures herewith set forth correspond to the company's results documented in the books, accounting and other records.
This presentation has to be accompanied by a verbal explanation. A simple reading of this presentation without the appropriate verbal explanation could give rise to a partial or incorrect understanding. By attending this presentation or otherwise accessing these materials, you agree to be bound by the foregoing limitations.
© 2022 De Nora
$|8$ WE ARE DE NORA
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