general meeting 2020 Utrecht, 25 June 2020
contents 1. Aalberts 2019 2. Aalberts trading update 2020 3. questions & answers Wim Pelsma (CEO) Arno Monincx (CFO)
“ you will find Aalberts where technology matters and real progress can be made” humanly, environmentally and financially
1. Aalberts 2019 Wim Pelsma - CEO
Aalberts highlights 2019 revenue +3% to EUR 2,841 million (organic +1.1%) o revenue added-value (in EUR million) (% of revenue) 2,841 62.8 operating profit (EBITA) EUR 362.6 million o with an EBITA-margin of 12.8% +3% 2018: 62.6 net profit before amortisation EUR 267.4 million; o EBITA EBITA % per share EUR 2.42 (-3%) (in EUR million) (% of revenue) 363 12.8 free cash flow EUR 312.1 million; o -1% 2018: 13.3 ROCE 15.1% (before IFRS 16) net profit earnings per share increased investments in organic growth o (in EUR million) (in EUR) 267 2.42 and innovation initiatives portfolio optimisation: acquired PPC and Applied, o -3% -3% annual revenue USD 62 million; divested STAG and HFI, capital expenditure ROCE annual revenue EUR 30 million (in EUR million) (in %) 148 14.1 updated strategy ‘focused acceleration’, o presented December 2019 +11% 2018: 16.6 solid and resilient performance in a more difficult market environment 25 June 2020 Aalberts | general meeting 2020 5
operational development organic revenue growth in three segments revenue per end market (in %) o installation, climate and industrial technology » 7 » driven by initiatives last years 16 organic revenue decline in material technology Europe o eco-friendly buildings 56% market uncertainty, postponements orders, inventory reduction » 24 industrial niches 21% 56 sustainable transportation 16% in automotive and several industrial niche end markets » semicon efficiency 7% initiated efficiency and restructuring actions; additional costs » North America and aerospace good growth and performance » revenue per region (in %) solid and resilient EBITA performance; mixed picture o » three business segments organic EBITA growth 6 11 » European surface technologies activity organic EBITA decline less incidental benefits compared to 2018 » Western Europe 58% 25 America 25% CAPEX increased to EUR 148 million o 58 Eastern Europe, Russia 11% facilitate organic growth and innovations » APAC, Middle East, Africa 6% more than 15 new product lines launched » solid and resilient performance in a more difficult market environment 25 June 2020 Aalberts | general meeting 2020 6
Aalberts integrated piping systems invented the Proflow PICV balancing valve, putting us ahead of all other valve manufacturers 25 June 2020 Aalberts | general meeting 2020 7
installation technology organic growth | innovation revenue (in EUR million) good organic growth; 1,124 » • Europe, America - commercial good level; UK, America - industrial challenging - » portfolio further optimised, improved quality of inventory » successful launch innovations press portfolio; new innovations to be launched coming year EBITA (in EUR million) gained several larger key accounts » 138 operational leverage | excellence +3% streamlined distribution setup America; reduction inventories and costs » EBITA % American organisation streamlined, overhead reduced; additional redundancy costs » (in % of revenue) 12.2 new European assembly and distribution centre; construction finished; 2H2020 operational » » efficiency improvements manufacturing, combined with capacity expansion 2018: 12.0 » initiatives UK streamline organisation, reduce costs capital expenditure capital allocation | portfolio (in EUR million) 46 increase capacity fast-growing product lines, combined with higher efficiency » European assembly and distribution centres » +23% operational excellence and innovation projects » huge potential in growth and operational leverage | excellence 25 June 2020 Aalberts | general meeting 2020 8
Aalberts surface technologies combines advanced heat and surface treatments, enabling automotive manufacturers to switch to 48V 25 June 2020 Aalberts | general meeting 2020 9
material technology organic growth | innovation revenue (in EUR million) European business deteriorated gradually in course of year; automotive and industrial niches 772 » last months order intake and inventories reduction stabilised; overall organic decline » +3% » revenue partly compensated by good performance North America, aerospace » many new developments; surface treatment, electrification of vehicles, precision extrusion EBITA (in EUR million) good progress business integration previous acquisitions; PPC and Applied acquired » 97 Eastern Europe performed well, expanded capacity » -5% operational leverage | excellence EBITA % actions taken to reduce costs service locations EU; less volume can only be compensated partly » (in % of revenue) 12.6 additional actions to restructure | streamline overhead, group structure » capital allocation | portfolio 2018: 13.7 » growth initiatives Eastern Europe and America capital expenditure (in EUR million) » new post-processing technology additive manufacturing 67 maintenance | efficiency improvement existing facilities » service network footprint further evaluated, based on Capital Markets Day » +14% solid performance despite lower order level Europe 25 June 2020 Aalberts | general meeting 2020 10
Aalberts hydronic flow control invented the Flexcon Premium, world's most sustainable expansion vessel 25 June 2020 Aalberts | general meeting 2020 11
climate technology organic growth | innovation revenue (in EUR million) good level in all regions 552 » many new product lines » +1% • still minor sales impact • manufacturing and service issues; solved towards end of the year EBITA (in EUR million) connected products, gaining data, new digital business models » 67 operational leverage | excellence +3% additional costs in sales, marketing, manufacturing and supply chain » EBITA % manufacturing footprint and supply chain will be streamlined » (in % of revenue) 12.2 capital allocation | portfolio 2018: 12.0 started construction new facility Almere, the Netherlands » » facilitate growth several product lines capital expenditure (in EUR million) » portfolio optimised, divestment STAG; 10 further portfolio optimisation needed » +7% good organic growth, many new product lines, further portfolio optimisation 25 June 2020 Aalberts | general meeting 2020 12
Aalberts advanced mechatronics developed an integrated test and qualification tool, significantly reducing lead time, failure rate and total costs 25 June 2020 Aalberts | general meeting 2020 13
industrial technology organic growth | innovation revenue (in EUR million) semicon efficiency solid organic growth 433 » • lower level; ready for next strong ramp up; new co-development projects +6% » fluid control • market uncertainty; postponement orders and inventory reductions EBITA (in EUR million) • last months inventory reductions and order intake stabilised 72 • several new innovations sustainable transportation, industrial niche end markets +13% operational leverage | excellence EBITA % manufacturing, supply chain, organisation improvements advanced mechatronics » (in % of revenue) 16.7 fluid control aligned cost structure and organisation; full year sales effect VAF acquisition » capital allocation | portfolio 2018: 15.7 » innovations, related manufacturing and assembly equipment; operational excellence initiatives capital expenditure (in EUR million) » new R&D centre, expanded manufacturing Graz, Austria 24 further capacity expansion semicon efficiency » portfolio optimised, divestment HFI, the Netherlands » -4% innovation is driving growth, advantage of earlier investments 25 June 2020 Aalberts | general meeting 2020 14
our strategy & objectives 2018-2022 strategy ‘focused acceleration' non-financial objectives financial objectives (before IFRS 16) remain improve worldwide leading niche average organic focused technology positions revenue growth > 3% technology positions EBITA margin > 14% creating sustainable profitable growth ROCE > 18% free cash flow generating high conversion ratio > 70% added-value margins leverage ratio < 2.5 converting strong improve profitability use Aalberts operational execution continuously strengths solvability > 40% into free cash flow driven by entrepreneurship and a relentless pursuit of excellence 25 June 2020 Aalberts | general meeting 2020 15
megatrends shaping our future rapid climate change the internet urbanisation resource scarcity of things globalisation & co-development connectivity & integration hydronic flow control eco-friendly buildings piping systems industrial niches niche selective surface technologies technologies end markets sustainable transportation fluid control semicon efficiency advanced mechatronics achieving unique market positions with sustainable impact 25 June 2020 Aalberts | general meeting 2020 16
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