AI Terminal
Sabaf
Investor Presentation • Jan 22, 2025
4440_ip_2025-01-22_186df6b0-59f0-4d66-9419-fdf1381eafab.pdf
Investor Presentation
Open in ViewerOpens in native device viewer
FINANCIAL PRESENTATION
Sabaf | 23rd January 2025
9th Annual Polytems HIR Italian Day in Frankfurt
Table of contents
- I. COMPANY PROFILE
- II. LATEST STRATEGIC MOVES
- III. FINANCIAL PERFORMANCE
- IV. SUSTAINABILITY
COMPANY PROFILE
Sabaf Group: product range evolution in 4 Business Units
SINCE 2000, further expansion since 2019 SINCE 2022
HINGES
- Ovens
- Dishwashers
- Washing machines
- Refrigerators
- Special applications
- Small compartments
- Catering appliances
Sabaf Group: evolution
5 acquisitions in the last 8 years 3 greenfield plants in the last 3 years
Sabaf Group: leading producer of components for household appliances and company evolution in 4 Business Units
Sabaf Group: industrial footprint
- 2021: 10 production plants
- 2024: 15 production plants (6 in Italy and 9 abroad)
- 1,750 employees at 31 December 2024
OKIDA ELEKTRONIK Electronics for household appliances
SABAF APPLIANCE COMPONENTS (KUNSHAN) Wok burners
SABAF INDIA Valves and burners
Valves and thermostats Standard burners Special burners ARC S.R.L.
Professional burners
SABAF S.P.A.
FARINGOSI-HINGES S.R.L. Oven hinges Dishwasher hinges
CMI ITALY (2 PLANTS)
Oven hinges Dishwasher hinges
PGA
Electronics for household appliances
MANSFIELD
Oven hinges Washing machines hinges Refrigerators hinges
SABAF MEXICO Burners
CMI POLAND
Dishwasher hinges
Why investing in Sabaf
Strategy for value creation
Sabaf Group Main shareholders
Cinzia Saleri S.a.p.A. Quaestio SGR Paloma Rheem Investments Fintel S.r.l. Treasury Shares 9.73 % Montinvest S.r.l.
Pietro Iotti, Sabaf CEO, owns 2.22% of voting rights
LATEST STRATEGIC MOVES
Latest strategic moves
Sabaf India
| Sales start | 2Q 2023 |
|---|---|
| Investment | € 5.2 million in 3 years |
| Division | Gas: production of valves and burners for the domestic market |
| Production capacity | € 6 million (scalable) |
Market characterized by:
- strong growth
- customization
- competitive price requests
- 12M 2024: revenues € 2.3 million
- 2025: sales growth
Completion of the entire production process of valves by 1H 2025
Sabaf Mexico
| Sales start | 1H 2024 |
|---|---|
| Investment | € 12 million in 2021-2023 |
| Division | Gas: production of burners for NA market |
| Production capacity | € 9 million (scalable) |
May 2024: start of sales to Mabe July 2024: start of sales to Whirlpool
Fast poduction ramp-up, working on 3 shifts
12M 2024: revenues € 3 million
Budget 2025: revenues € 7 million
Sabaf Induction
| Project start | 2021 |
|---|---|
| Sales start | 1H 2024 |
| Investment | About €5 million in R&D in the period 2021 – 2023 |
Sabaf has developed its own project know-how (proprietary patents, software and hardware)
Creation of innovative products which better meet manufacturers' needs and new consumer trends. The project flexibility will enable Sabaf to offer customised products to its clients
The Group benefits from the expertise gained from the acquisitions of Okida and P.G.A. where part of the induction cooking components are produced
Team of more than 60 electronic engineers
Q2 2024: one of the major multinational groups started to produce under Sabaf license
Q3 2024: delivery of samples to 9 customers for testing
Q4 2024 and Q1 2025: expected start of sales to many customers
FINANCIAL PERFORMANCE
Context analysis
Customers
Greater penetration of Turkish and Chinese players in the European market
- Arcelik with WHP EMEA (now Beko Europe)
- Haier with Candy acquisition
- Hisense with Gorenje acquisition
- Midea with Teka acquisition
Weakening of the historical Western players
Reduction in end-users purchasing power
The Sabaf Group thanks to its • global footprint • strong relationships with key market players is able to take full advantage of such trends
Competitors
The last 2 years highlighted the difficulty with resilience of some competitors, which could open opportunities for M&A and/or market share increase
Market trends
18
Europe
• After several quarters characterized by market weakness, the first signs of recovery are emerging
North America
Quarterly industry shipments in U.S.
• 2Q and 3Q 2024 industry shipments were positive (+5%). Market was driven by solid replacement demand, partially offset by weak discretionary purchases. Price/mix is negative.
- Strong growth in Latin America
- Asia is recovering compared to 2023
- Middle East and Africa performed well, but still affected by the geopolitical picture
9 MONTHS 2024 | Sabaf Group highlights
In this context Sabaf reported strong results
- Direct presence in emerging countries
- Product range expansion
- Product innovation allow the Group to gain market share and outperform the market
Thanks to its global industrial footprint and available production capacity, Sabaf is ready to respond to the expected recovery after a period of market weakness
| 9M 2024 | |
|---|---|
| REVENUE adj | +20.4% |
| (on like for like basis) a - - |
+12.7% |
| EBITDA adj | +31.9% |
| (on like for like basis) a - - |
+25.3% |
| EBITDA MARGIN adj | 15.1% |
| (on like for like basis) a - - |
15.4% |
Quarterly adjusted1 revenues comparison y-o-y
Yearly adjusted1 revenues and EBITDA
Adjusted income statement1 - 9 months 2024
| € x 000 |
9M | 2024 | 2023 | % Δ 9M 24 - 9M 23 |
MONTHS 12 |
2023 | ||
|---|---|---|---|---|---|---|---|---|
| Revenue | 212 312 , |
100% | 176 271 , |
100% | +20.4% | 239 086 , |
100% | |
| Other income |
7 653 , |
3.6% | 6 174 , |
3.5% | 9 036 , |
3.8% | ||
| Total operating and income revenue |
219 965 , |
182 445 , |
248 122 , |
|||||
| Consumption | (99 076) , |
(46.7%) | (86 777) , |
(49.2%) | (116 008) , |
(48.5%) | ||
| Personnel costs |
(51 364) , |
(24.2%) | (41 674) , |
(23.6%) | (57 809) , |
(24.2%) | ||
| Other operating costs |
(37 380) , |
(17.6%) | (29 627) , |
(16.8%) | (41 258) , |
(17.3%) | ||
| EBITDA | 32 145 , |
15.1% | 24 367 , |
13.8% | +31.9% | 33 047 , |
13.8% | |
| Depreciation | (14 273) , |
(6.7%) | (12 722) , |
(7.2%) | (17 071) , |
(7.1%) | ||
| Gain/losses on fixed assets |
9 0 |
0.0% | 1 488 , |
0.8% | 1 520 , |
0.6% | ||
| Write-downs/write-backs of non-current assets |
(8) | (0.0%) | - | 0.0% | - | 0.0% | ||
| EBIT | 17 954 , |
8.5% | 13 133 , |
7.5% | +36.7% | 17 496 , |
7.3% | |
| financial Non expense |
(1 294) , |
(0.6%) | (1 707) , |
(1.0%) | (3 334) , |
(1.4%) | ||
| Exchange and losses gains rate |
584 | 0.3% | (1 292) , |
(0.7%) | (2 169) , |
(0.9%) | ||
| EBT | 17 244 , |
8.1% | 10 134 , |
5.7% | +70.2% | 11 993 , |
5.0% | |
| Income taxes |
(3 960) , |
(1.9%) | (1 399) , |
(0.8%) | 2 438 , |
1.0% | ||
| PROFIT FOR PERIOD NET THE |
13 284 , |
6.3% | 8 735 , |
5.0% | +52.1% | 14 431 , |
6.0% | |
| Minority interests |
727 | 0.3% | 336 | 0.2% | 277 | 0.1% | ||
| PROFIT ATTRIBUTABLE TO THE GROUP |
12 557 , |
5.9% | 8 399 , |
4.8% | +49.5% | 14 154 , |
5.9% |
Income statement1 - 9 months 2024
| € x 000 |
MONTHS 9 |
2024 | MONTHS 9 |
2023 | % Δ 9M24 - 9M23 |
|---|---|---|---|---|---|
| Revenue | 213 875 , |
0% 100 |
176 906 , |
0% 100 |
9% +20 |
| Start sales -up |
- | (15) | |||
| Hyperinflation - Turkey |
(1 563) , |
(620) | |||
| Adjusted revenue |
212 312 , |
0% 100 |
176 271 , |
0% 100 |
4% +20 |
| EBITDA | 32 901 , |
4% 15 |
22 146 , |
5% 12 |
6% +48 |
| Start costs -up |
- | 1 905 , |
|||
| Hyperinflation - Turkey |
(756) | 316 | |||
| Adjusted EBITDA |
32 145 , |
1% 15 |
24 367 , |
8% 13 |
9% +31 |
| EBIT | 16 118 , |
5% 7 |
8 786 , |
0% 5 |
+83 5% |
| Start costs -up |
- | 2 523 , |
|||
| Hyperinflation - Turkey |
1 836 , |
1 824 , |
|||
| Adjusted EBIT |
17 954 , |
5% 8 |
13 133 , |
5% 7 |
7% +36 |
| result Net |
9 560 , |
5% 4 |
1 365 , |
8% 0 |
n.a. |
| Start costs -up |
- | 2 395 , |
|||
| Hyperinflation - Turkey |
2 997 , |
4 639 , |
|||
| Adjusted result Net |
12 557 , |
9% 5 |
8 399 , |
8% 4 |
5% +49 |
Adjusted sales by market
€ x 000
| MONTHS 9 2024 |
MONTHS 9 2023 |
∆ | |
|---|---|---|---|
| (excluding | 60 | 55 | 3% |
| Turkey) | 489 | 346 | +9 |
| Europe | , | , | |
| Turkey | 024 | 45 | +20 |
| 55 | 578 | 7% | |
| , | , | ||
| North America |
45 414 , |
33 953 , |
8% +33 |
| South America |
27 316 , |
21 051 , |
8% +29 |
| Africa and Middle East |
12 037 , |
13 751 , |
-12 5% |
| Asia | 12 | 6 | 5% |
| and | 032 | 592 | +82 |
| Oceania | , | , | |
| Total | 212 | 176 | 4% |
| 312 | 271 | +20 | |
| , | , |
Adjusted sales by product
€ x 000
| MONTHS 9 2024 |
MONTHS 9 2023 |
∆ | |
|---|---|---|---|
| Gas | 126 | 106 | 0% |
| 107 | 907 | +18 | |
| , | , | ||
| Hinges | 65 | 50 | 5% |
| 467 | 180 | +30 | |
| , | , | ||
| Electronics | 20 | 19 | 0% |
| 338 | 184 | +6 | |
| , | , | ||
| Induction | 400 | n.a. | |
| Total | 212 | 176 | 4% |
| 312 | 271 | +20 | |
| , | , |
Balance Sheet - Reported
| € x 000 | 30/09/2024 | 31/12/2023 | 30/09/2023 |
|---|---|---|---|
| Fixed assets | 177,042 | 181,167 | 180,274 |
| Inventories | 65 023 , |
61 985 , |
67 394 , |
| Trade receivables |
69 674 , |
55 826 , |
63 814 , |
| Tax receivables |
8 689 , |
11 722 , |
9 459 , |
| Other receivables current |
3 920 , |
3 868 , |
3 631 , |
| Trade payables |
(46 382) , |
(42 521) , |
(40 257) , |
| Tax payables |
(4 390) , |
(3 025) , |
(3 690) , |
| Other payables |
(17 578) , |
(16 007) , |
(14 794) , |
| Net working capital | 78,956 | 71,848 | 85,557 |
| Provisions for risks and severance indemnity |
(8 918) , |
(9 477) , |
(9 612) , |
| Capital Employed | 247,080 | 243,538 | 256,219 |
| Equity Net debt |
170,092 76,988 |
170,388 73,150 |
172,548 83,671 |
| Sources of finance | 247,080 | 243,538 | 256,219 |
At 30 September 2024, the impact of the net working capital on revenue was 27.7% compared to 36.3% at 30 September 2023 and 30.2% at the end of 2023
Net financial debt at 30 September 24
€77 million (€73.2 million at 31 December 2023) includes €10.8 million related to the recognition of the put option granted to MEC minorities
Cash flow statement
| € x 000 |
MONTHS 9 2024 |
MONTHS 12 2023 |
MONTHS 9 2023 |
|---|---|---|---|
| Cash the beginning of the period at |
36 353 , |
20 923 , |
20 923 , |
| profit Net Depreciation Other income adjustments statement |
10 287 , 16 817 , 5 324 , |
3 380 , 20 066 , 5 229 , |
1 701 , 14 847 , 5 532 , |
| Change working capital in net - Change in inventories - Change in receivables - Change in payables |
(5 842) , (15 046) , 4 332 , (16 556) , |
4 079 , 7 375 , 2 438 , 13 892 , |
1 720 , 107 (16) 1 811 , |
| Other changes in operating items |
359 | (2 715) , |
(1 986) , |
| Operating cash flow |
16 231 , |
39 852 , |
21 905 , |
| of disposals Investments , net Free Cash Flow |
(9 512) , 6 719 , |
(16 942) , 22 910 , |
(13 064) , 8 841 , |
| Cash flow from financial activity Own shares buyback Dividends Share capital increase Mansfield aquisition PGA acquisition Forex |
(5 442) , - (8 089) , - - - (1 268) , |
(14 208) , (462) - 17 312 , (8 325) , (783) (1 014) , |
(12 452) , (462) - 17 312 , (8 324) , (783) 521 |
| financial flow Net |
(8 080) , |
15 430 , |
4 653 , |
| Cash the end of the period at |
28 273 , |
36 353 , |
25 576 , |
Dividends: on 28 May 2024 distribution of a gross ordinary dividend of €0.54 per share
Outlook
Record revenues in 2024
- Sabaf closed 2024 with normalised preliminary consolidated revenues of €277 million
- +15.9% compared to 2023 (+10.2% on a like-for-like basis, excluding, for the first half of 2024 only, the contribution from MEC, a US company based in Mansfield - Ohio - in which Sabaf acquired a 51% stake in July 2023).
- This amount represents the highest revenue ever achieved by the Group in its history, a result that is particularly significant in light of the ongoing weakness in the home appliance market.
Positive Outlook for 2025
- The order intake in the first weeks of the year shows a double-digit growth compared to 2024 and anticipates an excellent first quarter
- In the coming months, potential more expansionary monetary policies could support the recovery of the housing sector in Europe and in the United States and thus the recovery of the market for household appliances.
Sabaf will continue to implement its Business Plan, which aims to increase and consolidate its global market shares, through
- the increasingly widespread presence of the Group at a global level
- the diversification of product offering
- the enhancement of the synergies with acquired companies
- the growth through acquisitions.
Notably, an increasing contribution is expected from the Gas division, thanks also to the new plants in Mexico and India, from the Induction division and from the direct presence in the United States (thanks to the recent acquisition of MEC).
SUSTAINABILITY
Sabaf: a sustainable business
Sustainability in the Business plan 2024 - 2026
Sabaf's strategy and governance model are aimed towards ensuring long-term sustainable growth. For Sabaf, sustainability is primarily based on sharing values with its stakeholders; compliance with common values increases mutual trust and encourages knowledge development " "
ESG Performance - Corporate Governance Remuneration policy
31
31
Environmental impact of different cooking fuels 1/3
About 30% of people on our planet, i.e. 2.5 billion people, are still relies on solid biomass fuels for cooking (wood, charcoal, animal dung, crop residues)
This population is mainly concentrated in Sub-Saharan Africa, where the unavailability of clean fuels affects 82% of the population, but significant percentages characterize also Central Asia, India, China, South-East Asia and Latin America
In addition to being harmful to the environment, the pollution produced by traditional fuels has important consequences on the health of users and families
5.5 billion people use fossil fuels (mainly natural gas and LPG) or electricity for cooking
Environmental impact of different cooking fuels 2/3
Environmental impact of different cooking fuels1
The environmental impact was measured using a scientific standard method (the ReCiPE 2016), which is based on 3 impact categories:
- damage to human health
- damage to ecosystem quality
- damage to resource availability
The environmental impact was highest in the case of coal cooking appliances (112) and lowest for LPG and methane cooking appliances (5 and 5.2 respectively).
Electric cooking appliances, with an impact of 9, highlighted an environmental impact equal to 180% of that deriving from gas hobs
Cooking through a gas hob instead of using firewood as cooking fuel, reduces the environmental impact by 80%
1 https://www.itjfs.com/index.php/ijfs/article/view/2170
Italian Journal of Food Science, 2022 – Environmental impact of the main household cooking systems – A survey, 2022 Alessio Cimini and Mauro Moresi, Università della Tuscia
Environmental impact of different cooking fuels 3/3
From the perspective of sustainable development, the reduction of the environmental impact resulting from cooking food will necessarily have to go through a dual strategy
Promote access to energy sources with lower impact for the population that still uses solid fuels
Favor electric cooking only where and when the energy production mix is characterized by a predominant component of green energy
An induction hob causes lower CO2 emissions than a gas hob only if the electricity is produced with a % of renewable sources (and/or nuclear energy) higher than 70%
The Sabaf Group pursue a business development path consistent with the ecological transition plans:
- Sabaf is investing to promote diffusion of gas cooking appliances in emerging countries, replacing traditional cooking methods with much higher environmental impact
- At the same time, Sabaf is investing to enter the sector of induction cooking, the most efficient form of electric cooking, which is constantly growing in the European market, although such trend has slowed down in the last 3 years
A possible revolution - Hydrogen burners
The Sabaf Group actively takes part in research projects aimed at evaluating the feasibility of replacing natural gas (methane) with hydrogen as a source for gas cooking appliances
Burners operating with 100% hydrogen: laboratory tests and prototypes have confirmed the technical feasibility of these products
The possibility to use hydrogen on a large scale as a fuel has still to overcome important technological challenges, both in terms of its production and distribution
A possible solution in a relatively short time is the use of a mix of methane and hydrogen, through the existing distribution network
Hy4Heat project, promoted by the British government, concluded in 2022 with positive results
Pilot project in collaboration with the Colombian client Industrias Haceb → European Union Sustainability certification LCBA (Low Carbon and Circular Economy Business Action)
DISCLAIMER
Certain information included in this document is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially.
The Company's business is in the domestic appliance industry and its outlook is predominantly based on its interpretation of what it considers to be the key economic factors affecting this business. Forward-looking statements with regard to the Group's business involve a number of important factors that are subject to change, including: the many interrelated factors that affect consumer confidence and worldwide demand for durable goods; general economic conditions in the Group's markets; actions of competitors; commodity prices; interest rates and currency exchange rates; political and civil unrest; and other risks and uncertainties.
Pursuant to Article 154/2, paragraph 2 of the Italian Consolidated Finance Act (Testo Unico della Finanza), the company's Financial Reporting Officer Gianluca Beschi declares that the financial disclosure contained in this financial presentation corresponds to the company's records, books and accounting entries.
For further information, please contact
Gianluca Beschi [email protected] Elena Gironi [email protected]