COMING UP…
Key Financials for the H1 2020
Thursday, August 13, 2020
at 10:00 a.m. (CEST)
presented by
Dr Thomas Kneip, Member of the Board
CENTROTEC SE
H1 results 2020
13.08.2020
§ Market Overview & Key Financials
§ Operational Highlights§ Outlook
AGENDA
Source: BDH monthly statistics
MARKET DEVELOPMENT
German heating market demonstrates stable growth in the first half of the year, but growth slowed down in the second half
4
Quarterly market growth rate of oil and gas heat generating units in Germany [in percent compared to same quarter of previous year]
3
8
6
-5
3
0
0
3
6
2
Q2/19Q1/18 Q3/19Q4/18 Q1/19Q2/18 Q3/18 Q4/19 Q1/20 Q2/20
Annual growth rate
plus 3%
Annual growth rate
plus 2%
• Slight, but visible decline in market dynamics in Q2 in Germany, after strong startinto the year
• Heavy impact on salesmarkets in Southern and Western Europe, as well asChina
• First sights of projectdelays and more intensecompetition in the AHU market
Market Impact ofCorona Pandemia
+ Continued groupwide growth in Germany and NL + Climate Systems with positive development in the
heat pump, domestic heating and ventilation market+ Acquisition of German roof product specialist IVT in
2019 with contribution to Gas Flue Systems saleso CHP business stabilized, but on low levelo Gas Flue Systems with a weaker 2nd quarter after
good start- China with a very weak first quarter and slow
recovery due to corona issue- Impact of corona crisis in several markets
(Southern Europe, UK) since March
* Organic Growth Rate: H1: 6.6%; Q2: 1.2%
REVENUE DEVELOPMENT
Sales growth in all segments; Corona crisis with a limited and regional impact until now
5
207.1
27.2
69.565.7
26.8
YtD H1 19
225.6
Med. Tech. & Eng. Plastics
YtD H1 20
Gas Flue Systems
Climate Systems
299.7322.3
7.6%*
by Segmentin EUR million
+8.9%
+5.7%
+1.3%
Drivers of Regional Sales+ Good development in Germany, Netherlands
and Eastern Europe- Weak development in Spain, Italy, France, UK
and China
Drivers of Revenue Development
Q2 156.0152.5 +2.3%
EBIT DEVELOPMENT
Strong revenue growth in Climate Systems segment drives groupwide earnings growth in the first six month of 2020
6
Med. Tech. & Eng. Plastics
2.8
1.2
YtD H1 19
4.1
16.80.9
10.2
5.8
YtD H1 20
Gas Flue Systems
Climate Systems
8.1
by Segment[in EUR million]
Drivers of EBIT Development
+<100%
+40%
-28%Climate Systems+ Scale effects from sales growth+ Successful implementation of profitability improvement
project in Air Handling Units- Negative contribution from some foreign group
companies due to corona crisis
Gas Flue Systems+ Further sales growth in the first quarter+ Strong German market- Weaker development in many foreign companies since
March with a little recovery at the end of the 2nd quarter
Med. Tech. & Eng. Plastics+ Sales growth in medical technologies - Engineering Plastics business is impacted by economic
slow-down and Corona-crisisQ2 7.74.1 +92%
EAT TRANSITION H1 2019 VS. H1 2020
EAT of the first six months burdened by negative financial result of the first quarter
7
[in EUR million]
8.3
Δ EBITDA
EAT H1 2019
10.4
6.9
Δ Depreciation 1.8
0.9
Δ Financial Result
Δ Tax
EAT H1 2020 6.3
Comments
• Depreciations higher than last years due to high investment levels (various production buildings upgraded, etc.)
• After good performance of financial investments in H1/2019 (+3.9 Mio. EUR) negative result in H1/2020 (- 4.6 Mio. EUR); Q2 result similar to previous year
• Tax and tax rate increase caused by lower taxation of negative impact from financial investments
92
94
96
98
100
102
104
106
108
12.2
8.20
18
1.28
.201
9
2.28
.201
9
3.31
.201
9
4.30
.201
9
5.31
.201
9
6.30
.201
9
7.31
.201
9
8.31
.201
9
9.30
.201
9
10.3
1.20
19
11.3
0.20
19
12.3
1.20
19
1.31
.202
0
2.29
.202
0
3.31
.202
0
4.30
.202
0
5.31
.202
0
6.30
.202
0
7.31
.202
0
Withdrawal of14 Mio. EUR
Impact of Corona Crisis
TOTAL RETURN OF CENTROTEC FINANCIAL INVESTMENTS FUND
Impact of corona crisis after positive development during the last year
31.12.19
Withdrawal of20.7 Mio. EUR
Withdrawal of3 Mio. EUR
Withdrawal of2.5 Mio. EUR
Withdrawal of5 Mio. EUR
minus5.6 Mio. EUR in
Q1/2020
August 12, 2020
Withdrawal of9.6 Mio. EURplus
1.1 Mio. EUR in
Q2/2020
KEY BALANCE SHEET AND CASH FLOW RATIOS
Overall stable key balance sheet ratios; positive operating cash flow trend
9
4/17
-0.36
2/202/17 1/18 3/183/17 2/18 1/204/18 1/19
-0.03
2/19 3/19 4/19
-0.04
0.050.01
-0.09
-0.16
-0.29
-0.14
-0.38
-0.23
-0.28-0.32
Net Financial Position / Equity
1/18 2/192/183/17 1/19
75.4
2/17 3/184/17 4/18 3/19 4/19 1/20
70.3
81.9 79.587.285.3 85.2
95.8
70.1
87.893.1
81.2
95.4
2/20
Net Working Capital[EUR million]
2/184/172/17 3/181/18
48.5
3/17 4/18 1/19 2/19
40.5
3/19
36.1
4/19 1/20
39.942.241.7
44.4 43.939.3 38.8 39.1 39.0
2/20
37.1
Equity Ratio[percent]
1/193/18 2/202/17 3/17 1/204/17 1/18 2/18 4/18 2/19
38.2
3/19 4/19
-2.2-2.8
5.2
31.6
-2.7
11.7
-10.3-6.1
-1.1
10.1
42.0
20.5
Operating Cash Flow (YTD)[EUR million]
INVESTMENTS BY SEGMENT
Key Investments temporarily under observation due to actual general economic situation
10YtD H1 19
6.6
23.3
YtD H1 20
3.0
13.711.6
1.5
8.9
Med. Tech. & Eng. Plastics
Gas Flue Systems
Climate Systems
22.0
-5%
-15%
+36%
-51%
Key Investments
Climate Systems:• Upgrade of two production halls at Wolf in Mainburg• IT infrastructure investments• Various product developments
Gas Flue Systems (including Holding):• Building of production plant in China; to be largely
completed in Q3• Introduction of HR IT solution for the group
Med. Tech. & Eng. Plastics• New production hall prepared for Moeller Medical in
Fulda
Investments (excl. M&A)[in EUR]
§ Market Overview & Key Financials
§ Operational Highlights
§ Outlook
AGENDA
NEW PRODUCTS
The new Heat Pump line has had an extraordinary good start – and new productshave been lined up
12
TGB-2 MULTI AIR SUPPLYCHA-MONOBLOCK HEAT PUMP
JIAXING FACTORY
The new CENTROTEC factory in Jiaxing has been almost completed
13
IMPLICATIONS OF CORONA PANDEMIA
The Corona crisis has had less impact than expected until now
14
Q1
•Hardly any impact until Mid March, except China
•Planned building projects were completed
•At the start of the quarter, spill-over effects from previous year, as subsidy scheme in Germany has been finalized
•Some inventory build-up at customers towards the end of the quarter
Q2
•Almost complete shut-down of markets in France, Spain, Italy and UK
•Stabilization in the German core market at good levels
•Break-down in public and commercial building activity will impact order intake more than revenues
H2 - insights
•Renovation business will remain on stable levels, but:
•New building activities (public, commercial and residential) is reduced
•Significantly positive impact from cost reductions of the due to cancelled trade fairs, business trips, marketing etc. impact will be much smaller in the second half of 2020
2021 - expectations
•Building activities, especially in commercial business will be reduced in the coming 12-18 months
•A second shut-down would hit the marketsvery hard
Corona impact on Earnings
Interruption of Supply
Chain
Interruption of Business Processes
State-ordered
productionstop
Interruption of Demand
IMPLICATIONS OF CORONA PANDEMIA ON CENTROTEC OUTLOOKSome of the risks from Corona have been mitigated, while others still prevail
15
Demand has not really recovered well in FR, ES, IT, UK, US yet. Other markets see less impact. In the long run, the dramatic drop in real estate investments will impact the AHU business towards the end of the year and in 2021.
Key components have been stocked up; currently no immediate risk
The risk of business interruption due to high infection rates has been mitigated through the implementation of a group wide hygiene and safety concept.
Unless there is a significant upsurge in infection rates, this risk is currently seen less likely to affect our business
UPDATE
Trend Indicator
§ Market Overview & Key Financials§ Operational Highlights
§ Outlook
AGENDA
EBIT [in million EUR]
OUTLOOK
Corona impact for the rest of the year remains difficult to predict. However, guidance seems well reachable by now
17
Revenue [in million EUR]
Med. Tech. & Eng. Plastics
457.4
54.0139.6
Gas Flue Systems
651.0
Climate Systems
670 to 690
3.233.1
Climate Systems
Med. Tech. & Eng. Plastics
10.1
19.8
Gas Flue Systems
2019
34 to 36
+ Strong H1 provides some buffer for potentially weaker development in the rest of the year
+ Careful cost management enhances earnings performance
o Stable market development in Germany may compensate for some of the heavily affected smaller markets in Europe & UK
- Public and commercial building activities are likely to significantly decline in H2 and 2021: This will affect our AHU business
Guidance should be achieved or slightly exceeded
Current Assessment
August 13 Publication of Q2/2020 / Half year
November 13 Publication of Q3/2020
November 16 - 18 Deutsches Eigenkapitalforum 2020 cancelled
FINANCIAL CALENDAR 2020
The Annual Shareholders‘ Meeting will be held online
18
CENTROTEC SE
Am Patbergschen Dorn 959929 Brilon/Germanywww.centrotec.de
Tel: +49 2961 96631-0Fax: +49 2961 [email protected]
WKN 540750ISIN DE 000 54 07506
Thank you!
This presentation contains forward-looking statements based on currentexpectations, assumptions and forecasts of the executive board and on currentlyavailable information. Various known and unknown risks, unpredictabledevelopments, changes in the economic and political environment and otherpresently not yet identifiable effects could result in the fact that the actual futureresults, financial situation or the outlook for the company differ from the estimatesgiven here. We are not obligated to update the forward-looking statements madein this presentation unless there is a legal obligation.