Aalberts : N.V., Halfjaarlijkse financiële verslaggeving

highlights

• organic revenue growth 5.6%
• EBITA EUR 264 million; EBITA margin 15.4%
• earnings per share before amortisation EUR 1.71 (+2%)
• cash flow from operations EUR 221 million (+146%)

CEO statement

"In the first six months of the year we delivered a strong performance with a record revenue, EBITA and cash flow from operations. Our customer service improved due to fewer supply chain issues.

The pricing initiatives started in the second half of last year led to a good added-value margin. We continued the initiatives in the first half of this year, compensating for high raw material costs and inflation.

In eco-friendly buildings we faced a volume decline due to ongoing inventory reductions of our customers. On top we reduced our own inventories, resulting in lower volumes in our factories. To compensate these effects we started additional cost reduction and purchase saving actions. Besides, we initiated sales actions to gain market share. This resulted in a resilient EBITA margin.

In sustainable transportation and industrial niches we performed very well, due to good volumes in our locations and operational excellence projects executed the last years. This resulted in an excellent operational leverage and EBITA margin. Our semicon efficiency activities performed well. Efficiency, service and cash flow improved strongly.

Overall, we continued our business development projects, driving organic growth, innovation and operational excellence, leading to an increase of capital expenditure. The inventory reduction resulted in a strong cash flow."

key figures

outlook

In the second half of 2023, we will continue our many business development projects driving organic growth, innovation and operational excellence. Capital expenditure to facilitate these plans will increase and the inventories will be further reduced.

We are relentlessly executing our strategy Aalberts 'accelerates unique positioning', realising our objectives.

mission critical technologies

financial development

Revenue increased by EUR 102.5 million to EUR 1,717.2 million. Acquisitions in 2022 (ISEL, UWS and KML) caused a positive revenue effect of EUR 30.9 million. Divestments in 2022 (ETI and VTI) caused a negative revenue effect of EUR 13.5 million. Currency translation impact amounted to EUR 2.9 million negative, mainly by USD (positive) and GBP (negative). Overall, we realised an organic revenue growth of EUR 88.0 million or 5.6%.

EBITA increased by EUR 14.0 million to EUR 264.2 million or 15.4% of revenue. There was a positive effect of EUR 6.3 million from the 2022 acquisitions. Divestments in 2022 caused a negative effect of EUR 2.2 million. Currency translation impact amounted to EUR 0.8 million negative (1H2022: EUR 4.0 million positive), resulting in an organic EBITA growth of EUR 10.7 million. Holding/eliminations is reported EUR 3.8 million negative, versus EUR 4.4 million negative in 2022.

Net profit before amortisation increased by EUR 2.4 million to EUR 188.7 million, per share to EUR 1.71 (1H2022: EUR 1.68). Net finance costs increased with EUR 12.2 million to EUR 20.2 million. The effective tax rate was 24.5% against 24.2% last year.

Our inventory reduction plans resulted in a decrease of EUR 30 million during 1H2023, against an increase of EUR 168 million during 1H2022. Inventories finished end of June at EUR 881 million (1H2022: EUR 856 million). Cash flow from operations was EUR 220.5 million against EUR 90.1 million last year, for EUR 117 million driven by improved working capital movement during 1H2023. CAPEX cash out finished at EUR 124.7 million (1H2022: EUR 87.1 million), leading to a positive free cash flow of EUR 110 million (1H2022: EUR 4 million).

Return on capital employed decreased from 15.9% to 15.8%. Our capital employed increased with EUR 226 million to EUR 3,275 million. Equity increased to 55.5% of the balance sheet total (1H2022: 51.6%). During 1H2023 net debt decreased with EUR 21 million to EUR 773 million (during 1H2022 increase of EUR 160 million). Our leverage ratio slightly increased from 1.1 to 1.2.

revenue bridge

EBITA bridge

mission critical technologies

operational development

Aalberts realised 5.6% organic revenue growth in the first six months of the year. The orderbook end of June was at a comparable high level as last year and 37% higher than end of June 2021. We were able to deliver a good added value margin of 62.3% due to further and on-time pricing initiatives, despite higher raw material and energy costs.

Customer service improved due to fewer supply chain issues and during 1H2023 we reduced our inventories, despite lower sales volumes in eco-friendly buildings. The results of our inventory reduction plans become visible in a strong cash flow from operations. We continued our business development projects to drive organic growth and innovation. Operational excellence projects continued to improve our service, efficiency, optimise our footprint and realise purchase savings. Capital expenditure further increased (+38%) to facilitate organic growth, innovation and operational excellence plans.

Regional manufacturing becomes favourable to improve service, protect supply chains and reduce transport and energy use. We invested in several projects with our customers enabling their regional assembly and manufacturing.

Activities in eco-friendlybuildings faced a volume decline, due to continued inventory reduction of mainly our wholesale customers. The underlaying demand of our installer end users is on a good level. Renovation of heating and cooling systems is continuing, with energy efficiency as a strong growth driver. In new build we see postponement of projects. Our pricing initiatives continued. We successfully implemented additional sales initiatives to gain market share. Our new factories in fast-growing product lines are making good progress and are ramping up fast to achieve organic growth. Action plans to further reduce costs, realise purchase savings and reduce inventories continued.

In semicon efficiency the strong growth continued and we realised a good performance. Our orderbook is on a very good level. The customer service improved due to better efficiency, strengthened management teams and fewer supply chain issues. Cash flow from operations improved strongly. In parallel, capacity expansions and efficiency improvements continued, enabling the

growth of our customers. Several new development projects were gained. We started with building preparations of our new factory for ultra-precision frames in the Netherlands. ISEL and KML performed well and we are ramping up manufacturing in the second half of the year to facilitate growth. We are investing in additional equipment and manufacturing space.

In sustainable transportation the order intake continued on a good level and we realised a strong performance. We were able to realise good added value margins. Supply chain disruptions at the facilities of our customers reduced. The demand for precision manufactured parts and specialised surface technologies continued, accelerated by new developments in e-mobility, lightweight materials, sustainability and reshoring. We gained several new and larger projects in Europe and North America. To realise these projects we are investing in building expansions and additional equipment this year and next year.

The requests for sustainable electronic pressure regulator and safety valve applications for hydrogen and sustainable cooling fluids increased strongly. Several projects are in development and we are ramping up manufacturing. In aerospace and marine we made an excellent performance, accelerated by sustainable system innovations.

In industrial niches the order intake continued on a high level and our activities performed very well. The demand for precision extrusion parts and specialised surface technologies continued on a high level during the first half of the year. We were able to realise good added value margins. Supply chain disruptions at the facilities of our customers reduced strongly, leading to higher shipments.

Our industrial valves business in Europe and North America made a good performance. Also here we faced inventory reductions the last months, where our customers optimised their working capital. Several initiatives were taken to gain market share the coming periods.

We are relentlessly executing our strategy Aalberts 'accelerates unique positioning', realising our objectives.

mission critical technologies

webcast

An audio webcast will take place on 27 July 2023, starting at 9:00 am CEST. The audio webcast and presentation can be accessed via aalberts.com/webcast1H2023

contact

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

financial calendar 2023-2024

regulated information

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