FLUIDRA, S.A. 
Q3 2023 RESULTS
October 26th 2023
Disclaimer
This document is for information purposes only and does not constitute an offer to sell, exchange or buy, or an invitation to make offers to buy, securities issued by any of the companies mentioned. This financial information has been prepared in accordance with international financial reporting standards (IFRS). However, as it has not been audited, the information is not definitive and may be modified in the future.
The assumptions, information and forecasts contained herein do not guarantee future results and are exposed to risks and uncertainties; actual results may differ significantly from those used in the assumptions and forecasts for various reasons.
The information contained in this document may contain statements regarding future intentions, expectations or projections. All statements, other than those based on historical facts, are forward-looking statements, including, without limitation, those regarding our financial position, business strategy, management plans and objectives for future operations. Such forward-looking statements are affected, as such, by risks and uncertainties, which could mean that what actually happens does not correspond to them. These risks include, amongst others, seasonal fluctuations that may change demand, industry competition, economic and legal conditions, restrictions on free trade and/or political instability in the markets where the Fluidra group operates or in those countries where the group's products are manufactured or distributed, and those that may arise from potential COVID-19-related contingencies. The Fluidra group makes no commitment to issue updates or revisions concerning the forward-looking statements included in this financial information or concerning the expectations, events, conditions or circumstances on which these forward-looking statements are based.
In any event, the Fluidra group provides information on these and other factors that may affect the company's forward-looking statements, business and financial results in documents filed with the Spanish national securities market commission. We invite all interested persons or entities to consult these documents.
Alternative Performance Measures (APMs)
This document and any related conference call or webcast (including a Q&A session) contain, in addition to the financial information prepared in accordance with IFRS, alternative performance measures ('APMs') as defined in the Guidelines issued by the European Securities and Markets Authority ('ESMA') on October 5, 2015.
APMs are used by Fluidra's management to evaluate the group's financial performance, cash flows or financial position in making operational and strategic decisions for the group and therefore are useful information for investors and other stakeholders. Certain key APMs form part of executive directors, management and employees' remuneration targets.
APMs are prepared on a consistent basis for the periods presented in this document. They should be considered in addition to IFRS measurements, may differ to definitions given by regulatory bodies relevant to the group and to similarly titled measures presented by other companies. They have not been audited, reviewed or verified by the external auditor of the Fluidra group. For further details on the definition of APMs, please see the appendix of this presentation.
2
Today's speakers
Eloi Planes | Bruce Brooks | Xavier Tintoré |
Executive Chairman | CEO | CFTO |
3
Key messages
- Good performance in Q3, within expectations in a challenging trading environment
- Correction of inventory in the channel during the quarter as expected and broadly behind us
- Resilient aftermarket demand
- Higher underlying gross margin YTD, with Q3 geographic and mix effects
- Continued focus on cost control and inventory management - Fluidra's NWC normalizing
- Strong cash generation in the quarter, with net debt reduction having completed the acquisition of Meranus and payment of relevant portion of ordinary dividend
- Strengthening the business for the long-term
- Customer centricity: received 'Vendor of the Year' awards for the third time in a row (US)
- Simplification Program on track to bring 2023 and future margin enhancement
- Maintaining 2023 guidance
- Confident in our future
4
Quarter performance within expectations
YTD financial highlights €M | 2022 | 2023 | Evol. 23/22 |
Sales | 1,967 | 1,623 | (17.5%) |
EBITDA | 456 | 366 | (19.7%) |
EBITA | 395 | 299 | (24.3%) |
Cash EPS | 1.33 | 0.94 | (29.6%) |
Operating net working capital | 649 | 490 | (24.5%) |
Net debt | 1,325 | 1,230 | (7.1%) |
Net debt / LTM EBITDA | 2.4x | 2.9x | 0.5x |
Const. FX & Perimeter
(16.2%)
(18.0%)
(22.9%)
(21.6%)
(3.2%)
- Saleswithin expectations, with lower volumes and unfavorable FX more than offsetting higher prices
- EBITDAand EBITAreflect lower sales, but also 120 bps higher gross margin year-on- year and the benefits of the Simplification Program
- Cash EPSlower due to operating performance
- Good progress in reducing operating net working capital. As % of LTM sales, operating NWC improved 250 bps vs prior year and 660 bps vs June 2023
- Net debtreduced by €70 million in the quarter
- Leverage ratio higher YoY, due to lower LTM EBITDA, but below June 2023
5
Simplification Program to enhance margins on track
Gross margin improvement | Fixed cost savings |
Redesigning product offering and | Streamlining operations and reducing |
globalizing procurement model | structure overlaps |
Simplification tracker
Initiatives implemented / being implemented
Annual run rate by the end of 2025 of initiatives being implemented (€M)
% of full program's target
2023 impact of initiatives being implemented (€M)
>350
c.65
65%
c.31
Full program to generate €100 million of savings, a third annually in 2023-2025
Related restructuring and other costs slightly below 1x for the three year period | 6 |
Innovation leader, ongoing enhancing our offering
Jandy's Infinite WaterColors
Nicheless LED lights
- First-in-industryfeatures: infinite color options with custom palette
- Digital control via app and option to integrate with smart home devices via Alexa
- Sustainability - LED lights consume 87% less energy vs comparable incandescent/halogen lights
Fluidra Pool new app
- Launch of new app in EMEA, Fluidra Pool: better functionality more intuitive interface for an enhanced customer experience
- Umbrella app replacing iAqualink+ connecting the brand Fluidra directly with end-consumer
IQBridges and smart plugs
- Innovative IoT devices that help the end-userconnect pool equipment
- Cost effective and easy to install, plug & play solutions+9%
- Enables anytime, anywhere user control via new Fluidra Pool app
Enabling the Smart Pool experience
7
Higher prices partly offsetting lower volumes and FX
YoY growth (%) | Const. FX & Perimeter | |||||||
Sales by geography | Q3 2023 | YTD 2023 | ||||||
Southern Europe | (5.9%) | (12.4%) | ||||||
Rest of Europe | (10.7%) | (28.2%) | ||||||
North America | (18.4%) | (19.6%) | ||||||
Rest of the World | (0.4%) | (0.4%) | ||||||
Total | (11.2%) | (16.2%) | (2%) | 1% | 5% | (20%) | (18%) | |
Volumes reflect channel de-stocking and weaker demand
8
EBITDA margin resilience despite top line decline
YTD results €M | 2022 | % Sales | 2023 | % Sales | Evol. | • | Sales driven by lower volumes, with | |
23/22 | channel inventory correction and softer | |||||||
new build demand coupled with | ||||||||
Sales | 1,967 | 100% | 1,623 | 100% | (17.5%) | |||
unfavorable FX in Q3 | ||||||||
Gross margin | 1,007 | 51.2% | 851 | 52.4% | (15.5%) | • | ||
Gross margin higher YTD despite cost | ||||||||
Opex | 551 | 28.0% | 485 | 29.9% | (12.0%) | |||
inflation in semi-manufactured goods | ||||||||
EBITDA | 456 | 23.2% | 366 | 22.5% | (19.7%) | • | Operating expenses reflect inflation in | |
labor and general costs, mitigated by cost | ||||||||
D&A (non-PPA related) | 60 | 3.1% | 66 | 4.1% | 9.9% | |||
control initiatives | ||||||||
EBITA | 395 | 20.1% | 299 | 18.4% | (24.3%) | • | ||
Restructuring, M&A and integration | ||||||||
Amortization (PPA related) | 55 | 2.8% | 50 | 3.1% | (8.0%) | |||
expenses mainly driven by Simplification | ||||||||
Restructuring, M&A, integration expenses | 18 | 0.9% | 38 | 2.3% | 106.0% | Program | ||
and SBC | • | |||||||
Higher cash interest expense. However, | ||||||||
Net financial result | 71 | 3.6% | 60 | 3.7% | (15.9%) | |||
net financial result lower with prior year | ||||||||
Tax expense | 67 | 3.4% | 41 | 2.5% | (39.1%) | affected by non-cash fee write-off from | ||
refinancing process in 2022 | ||||||||
NCI | 4 | 0.2% | 3 | 0.2% | (39.2%) | • | ||
Cash net profit lower on the back of | ||||||||
Net profit | 179 | 9.1% | 108 | 6.6% | (40.0%) | |||
operating performance | ||||||||
Cash net profit | 260 | 13.2% | 180 | 11.1% | (30.8%) | |||
Notes: SBC = Stock based compensation
9
Good cash flow generation
Cash flow (abridged) and net debt YTD €M | 2022 | 2023 | € Evol. 23/22 |
Reported EBITDA | 437 | 328 | (109) |
Net interest expense paid | (38) | (52) | (15) |
Corporate income tax paid | (74) | (28) | 46 |
Operating working capital | (276) | 59 | 334 |
Other operating cash flow | 13 | (30)(1) | (43) |
Operating cash flow | 63 | 276 | 213 |
Capex | (53) | (40) | 13 |
Acquisitions / divestments | (27) | (34) | (8) |
Other investment cash flow | 7 | 0 | (7) |
Net investment cash flow | (72) | (74) | (2) |
Lease liability payments | (23) | (30) | (7) |
Treasury stock | (60) | 0 | 60 |
Dividends and others | (83) | (67) | 16 |
Financing cash flow | (166) | (97) | 69 |
Free cash flow | (175) | 105 | 280 |
Prior period net debt | 1,067 | 1,319 | 252 |
FX & lease changes | 83 | 16 | (67) |
Free cash flow | 175 | (105) | (280) |
Net debt | 1,325 | 1,230 | (95) |
Net leases | (199) | (203) | (3) |
Net financial debt | 1,126 | 1,028 | (98) |
- Operating cash flow improved year- on-year due to reduction of operating working capital levels, which more than offset lower EBITDA
- Investment cash flow reflects acquisition of Meranus in July 2023
- Financing cash flow improved YoY, with the prior year reflecting small buy-back program
- Net debt reduced by €70 million in the quarter and €95 million compared to
September 2022
(1) Includes payments related to the long-term incentive plan (2018-2022) | 10 |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Fluidra SA published this content on 26 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2023 06:22:43 UTC.
