Aalberts Industries NV: Aalberts N.V., - Aalberts realises EUR 1.51 billion revenue with an EBITA margin of 14.9%

highlights

• revenue EUR 1,511 million
• organic revenue growth +20.1%
• orderbook +59%
• EBITA EUR 226 million; EBITA margin 14.9%
• net profit before amortisation EUR 169 million; per share EUR 1.52 (+97%)
• increasing capital expenditure for this year and coming years
• acquisitions Sentinel and Premier Thermal, divestments Adex and Lasco

CEO statement

"In the first six months of the year we delivered a strong performance.

Our revenue reached a level of EUR 1,511 million with an organic revenue growth of 20.1%. We realised an EBITA of EUR 226 million with an EBITA margin of 14.9%. Our net profit before amortisation increased with 97% to EUR 169 million, per share EUR 1.52.

Many business development projects are in process to drive our organic growth further. To facilitate the expansion plans, innovation roadmaps and to drive operational excellence further, we are increasing our capital expenditure for this year and the coming years. Our portfolio is optimised with two acquisitions and two divestments.

In December 2021 we will give an update of our strategy 'focused acceleration' during a capital markets day, combined with an innovation experience.

We thank our Aalberts people continuing our operations in a safe way, serving our customers worldwide, delivering a strong performance, executing the strategic restructuring programme and driving our strategy forward."

key figures

in EUR million	1H2021	1H2020	delta
revenue	1,511	1,287	17%
added-value as a % of revenue	61.8	62.3
EBITA	226	122	86%
EBITA as a % of revenue	14.9	9.5
net profit before amortisation	169	86	97%
earnings per share before amortisation (in EUR)	1.52	0.77	97%
net debt	658	807	(18%)
net debt (before IFRS 16)	465	648	(28%)
leverage ratio: net debt / EBITDA (before IFRS 16)	1.0	1.6
cash flow from operations	153	68	125%
capital expenditure	58	54	8%
net working capital	516	598	(14%)
return on capital employed (before IFRS 16)	15.9	11.7

outlook

We continue our business development and innovation initiatives, driving our sustainable profitable growth.

We started the second half of the year with a good orderbook. Our capital expenditure in organic growth, innovations and operational excellence will be increased.

We continue to optimise our portfolio and strengthen our market positions with bolt-on acquisitions.

mission critical technologies

financial development

Revenue increased in 1H2021 by EUR 223.7 million to EUR 1,510.8 million. The 2021 acquisition (Sentinel) caused a positive revenue effect of EUR 6.2 million. Divestments in 2020 caused a negative revenue effect of EUR 1.4 million.

Currency translation | FX impact amounted to EUR 33.4 million negative, mainly US Dollar. Overall, we faced an organic revenue growth of EUR 252.3 million or 20.1%.

Operating profit (EBITA) increased in 1H2021 by EUR 104.1 million to EUR 225.8 million or 14.9% of the revenue. There was a positive effect of EUR 1.4 million from the 2021 acquisition. Divestments in 2020 caused a negative EBITA effect of EUR 0.1 million. Currency translation | FX impact amounted to EUR 2.6 million negative, resulting into an organic EBITA growth of EUR 105.4 million. Holding/eliminations is reported EUR 3.2 million negative against EUR 7.2 million negative last year, where last year was including EUR 4.5 million strategic restructuring costs.

Net profit before amortisation increased by EUR 83.0 million to EUR 168.6 million, per share to EUR 1.52 (1H2020: EUR 0.77). The effective tax rate was 23.5% against 24.8% last year.

Working capital decreased to EUR 516 million or 68 days (1H2020: EUR 598 million and 80 days), including an 'assets held for sale' reclass of EUR 15.8 million for Lasco. Inventories finished at EUR 639 million (1H2020: EUR 625 million), including an 'assets held for sale' reclass of EUR 12.0 million for Lasco. Cash flow from operations increased with EUR 85 million, CAPEX cash out decreased with EUR 9 million, resulting in a EUR 94 million higher free cash flow than last year.

ROCE (before IFRS 16) increased from 11.7% to 15.9%. Our capital employed reduced with EUR 37 million to EUR 2.642 million. Equity increased to 53.2% of the balance sheet total (1H2020: 51.8%). Net debt amounted to EUR 658 million (1H2020: EUR 807 million), net debt (before IFRS 16) decreased with EUR 183 million or 28% to EUR 465 million. The leverage ratio before IFRS 16 improved to 1.0 (1H2020: 1.6), well below the bank covenant of < 3.5.

revenue bridge

EBITA bridge

mission critical technologies

operational development

In the first six months we realised an organic revenue growth of 20.1% compared to last year and 6.4% compared to 2019. Our orderbook end of June is 59% higher than last year and 66% higher compared to 2019.

Activities in the eco-friendlybuildings end market did very well in all regions. Many growth drivers are contributing to this good performance. First, the market recovery and the restocking of the distribution channels after the COVID-19 impact last year. Secondly, end users are investing more in renovation and upgrading of residential housing. Thirdly, our innovations launched the last years are driving our growth, such as the expansion of our offering of connection and valve technology and our hydronic flow control solutions in combination with digital services. This is accelerated by governmental support programmes stimulating building efficiency and the transition towards sustainable heating and cooling systems.

Our operational excellence initiatives and the consolidation of our distribution footprint are making good progress. Investment plans to expand our manufacturing and assembly capacity in fast-growing product lines in Europe and North America are accelerated.

In the semicon efficiency end market we again realised a strong growth and performance. Long-term growth drivers are strong microchip demand for computer logic and storage, e-mobility developments, connectivity and IoT, investments in new fabs and 5G roll-out. These growth drivers are accelerating our business even faster than expected. Besides, microchip manufacturers are expanding their regional capacity to secure their own technology know-how and supply chain. This is accelerating additional investments in the most efficient microchip manufacturing equipment in all regions.

Based on these growth drivers, additional customer investments, the record orderbook and conversations with our key accounts we expect a strong growth for this year and the years ahead. We are in the process of preparing capacity expansions and efficiency improvements in all our locations.

In parallel, we are working on new product introductions with our key accounts to co-develop, assemble and manufacture integrated modules. We are further strengthening our organisation, recruiting additional engineers and preparing additional expansion plans.

Activities in the sustainable transportation end market showed a strong recovery driven by more customer demand, restocking of the supply chain and new developments for surface technologies in combination with precision manufactured parts for the electrification of vehicles. First, the need for lightweight materials is leading to an increase of aluminium parts and combinations of metal and composite. Secondly, connectors are growing fast with high-specified precision stamping parts in combination with metal strip coatings. Thirdly, many new passenger car and light truck models generate new business for Aalberts.

Our sustainable fluid control solutions for climate systems in passenger cars showed a strong growth and we are in the process of developing new applications for electrical vehicles. We are co-developing new regulators and valves for hydrogen and gas applications in passenger cars and heavy duty trucks. Within marine we are upgrading our innovation roadmap with fuel reduction systems, sensors, valves and regulators. Aerospace is recovering with an increased order intake.

In the industrial niches end market our orderbook increased the last quarter and we expect a further increase in the second half of the year in Europe and North America. Our investments in specialised surface technologies are getting traction. We installed additional equipment in Eastern Europe and North America and gained many new customers. Additional investments are in process and we will further expand these technologies to other regions, utilising our service network.

In the first six months of the year our business teams were able to manage the disruptions in our supply chain and raw material shortages locally in a challenging environment. We faced no severe issues till now.

We evaluated the business development and innovation roadmaps with our business teams. Based on these evaluations and the market trends we will increase our capital expenditure for this year and the coming years, driving our strategy forward.

The implementation of the strategic restructuring programme, inventory reduction projects and divestment programme made good progress and are on track. Our goal is to evolve faster into an even stronger and better Aalberts, realising our strategic objectives.

mission critical technologies

acquisitions and divestments

Aalberts acquired Sentinel in the United Kingdom, generating an annual revenue of approximately GBP 20 million.

Aalberts acquired Premier Thermal in Michigan, USA, generating an annual revenue of approximately USD 60 million.

Aalberts divested Adex in the Netherlands, generating an annual revenue of approximately EUR 10 million.

Aalberts divested Lasco in Tennessee, USA, generating an annual revenue of approximately USD 150 million.

webcast

An audio webcast will take place on 22 July 2021, starting at 9:00 am CEST. The live audio webcast and presentation can be accessed via aalberts.com/webcast1H2021.

capital markets day

On Thursday 2 December 2021 Aalberts will give an update of the Aalberts strategy 'focused acceleration' during a capital markets day, combined with an innovation experience and factory tour. This will take place in our new facility of Aalberts hydronic flow control in Almere (the Netherlands).

contact

+31 (0)30 3079 301 (from 8:00 am CEST) investors@aalberts.com

financial calendar 2021-2022

date	event
22	July 2021	webcast interim results (9:00 am CEST)
2 December 2021	capital markets day
24	February 2022	publication full year results (before start of trading)
24	February 2022	webcast full year results (9:00 am CET)
7 April 2022	publication annual report
19	May 2022	general meeting

regulated information

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