Arbonia with very positive annual results again for 2021

• Revenue growth of 11.6% when adjusted for currency and acquisition effects
• EBITDA without one-time effects: +17.4% from CHF 114.5 million to CHF 134.3 million¹
• EBIT without one-time effects: +28.6% from CHF 52.1 million to CHF 67.0 million¹
• Group result from continuing operations without one-time effects: +46.2% from CHF 28.1 million to CHF 41.1 million¹
• Group result: +208.9% from CHF 44.9 million to CHF 138.7 million
• Net cash position von CHF 93.2 million (previous year: net debt of CHF -140.6 million)
• Increase in the equity ratio to 64.3% (previous year: 59.0%), shareholders' equity >1 billion.
• Proposal of a dividend payment of CHF 0.30 (+20%) for the 2021 financial year

Arbon, 1 March 2022 - A revenue growth of 11.6% when adjusted for currency and acquisition effects, or an increase of 14.2% in Swiss francs from CHF 1038.4 million to CHF 1186.2 million, resulted for the financial year 2021. Without one-time effects, Arbonia increased its EBITDA by 17.4% from CHF 114.5 million to CHF 134.3 million and thereby succeeded in increasing their EBITDA margin to 11.3% in a demanding environment. Arbonia increased EBIT without one-time effects by 28.6% from CHF 52.1 million to CHF 67.0 million. Arbonia was able to increase its Group result from continuing operations without one-time effects by 46.2% to CHF 41.1 million (previous year: CHF 28.1 million). 

¹One-time effects
In the 2021 financial year, one-time effects in the amount of CHF 13.4 million accrued, the majority of which is due to the planned relocation and closure of the radiator production plant in Tubbergen, Netherlands. With one-time effects, EBITDA of the Group was CHF 124.7 million (previous: CHF 116.3 million), EBIT was CHF 53.3 million (previous year: CHF 53.9 million), and capital gains were CHF 138.7 million (previous year: CHF 44.9 million). The reported Group result, which includes the continuing and discontinued operations, amounted to CHF 138.7 million (previous year: CHF 44.9 million) especially thanks to the revenue from the sale of the Windows Division.

¹ Explanations, definitions, and reconciliations for the Alternative Performance Measures are found in the annual report 2021 on pages 227 - 232.
Detailed information on the figures with one-time effects can be found in the lead

The free cash flow was CHF 252.7 million in the reporting year (previous year: CHF 52.5 million). The positive development resulted from the cash inflow from the sale of the Windows Division and despite outflows of liquidity of around CHF 130 million from acquisitions through the accelerated investment programme, balance sheet optimisations (discontinuation of factoring and purchase of the Garant production site), as well as the increase in net current assets. 

As of 31 December 2021, the total assets of Arbonia increased compared to the previous year by around CHF 108 million to CHF 1623.3 million (previous year: CHF 1515.2 million). The increase came about from the cash inflow from the sale of the Windows Division, the increase in inventory, the trade accounts receivable, as well as the increase in non-current assets (investments and acquisitions).

The net debt of CHF -140.6 million at the end of the financial year 2020 developed into a net cash position of CHF 93.2 million due to the cash inflow and the decline in liabilities from the sale of the Windows Division, despite considerable investments in non-current assets, acquisitions, and other cost-optimising measures.

The shareholders' equity increased by around CHF 150 million to now CHF 1044 million, which corresponds to an increase in the equity ratio from 59.0% to 64.3% as of the end of 2021. This increase is mostly due to the Group result of CHF 138.7 million, which consists of the capital gains of the Windows Division and the net profit of the continuing operations.

The strong balance sheet also makes it possible to distribute a 20% higher dividend of CHF 0.30 per registered share (CHF 0.25 for the 2020 financial year) to the shareholders for the 2021 financial year, for the fourth year in a row since the start of dividend payments. For this reason, the Board of Directors will propose to the General Meeting on 22 April 2022 to distribute a cash dividend of CHF 0.30 per registered share for the 2021 financial year, half from retained earnings and, tax-neutral for Swiss shareholders, half from capital contribution reserves.

Strategy and development of the Arbonia Group
Following the sale of the Windows Division and the integration of the Sanitary Equipment Division in the Doors Division, Arbonia focused on the two divisions Heating, Ventilation, and Air Conditioning (HVAC) and Doors in the reporting year 2021. These divisions are independently continuing their strategic development and are essentially focused on the megatrends of energy efficiency, urbanisation, digitisation, as well as automation.

The HVAC Division achieved revenue of CHF 630.5 million in 2021, which represents a significant increase of 19.2% compared to the previous year (CHF 529.1 million). Even when adjusted for currency and acquisition effects, the revenue closed 16.1% above the previous year, with growth in almost all product groups. At CHF 70.6 million, EBITDA without one-time effects was well above the previous year's level of CHF 59.6 million (+18.4%). This was due not only to an encouraging increase in productivity but also to new products, cost discipline, and efficiency gains in many areas. Part of the revenue growth was due to price increases, which were necessary to compensate for the considerably higher material prices. EBIT without one-time effects was CHF 38.2 million, 27.2% over the figure for the previous year of CHF 30.0 million. 

In the HVAC Division, one-time effects of around CHF 12.8 million accrued in the reporting year in connection with the planned relocation and closure of the Vasco production plant at the Tubbergen (NL) site, whereby CHF 8.8 million in costs accrued at the EBITDA level and around CHF 4.0 million impairments at the EBIT level. Consequently, EBITDA with one-time effects of CHF 61.9 million was 4.6% higher than the previous year (CHF 59.2 million) and EBIT with one-time effects was CHF 25.5 million (previous year: CHF 29.6 million).

The strategy of the HVAC Division clearly reflects the important megatrends of «CO₂ reduction» as well as «healthy and sustainable indoor climate». The recently adopted comprehensive climate protection package of the EU Commission, corresponding to those of the member states, which has climate targets of 55% greenhouse gas savings by 2030 and climate neutrality by 2050, confirms the long-term strategic orientation that has been adopted. For several years now, as in the reporting year, the division has consistently pursued a strategy of being an innovative provider of sustainable heating systems and their components: from modern heat generation and optimum heat exchange to energy storage for all types of buildings and scopes of application, both for new construction and renovation markets. 

The expansion of the strong market position in the established product groups continues to be the basis for the business model, however. In the reporting year, targeted investments and acquisitions were made to underpin the product and production strategy based on the following four pillars:
-    «Best in class» production for radiators
-    Use of renewable energies with heat pump and battery storage products
-    Radiant heating and cooling for modern buildings
-    Ventilation and indoor air quality

The Doors Division achieved a revenue growth of 8.3% in the reporting year, from CHF 509.4 million in the previous year to CHF 551.8 million. When adjusted for currency and acquisition effects, the revenue increased by 6.9%. EBITDA without one-time effects grew from CHF 66.1 million in the previous year to CHF 76.3 million. (+15.3%). EBIT without one-time effects amounted to CHF 43.3 million, compared to CHF 35.1 million in the previous year (+23.1%). All figures for the previous year refer to the former Doors Division including the former Sanitary Equipment Division. In the Doors Division, there were no significant one-time effects in the reporting year. 

In the middle of the reporting year, the Sanitary Equipment Division with its shower doors and partitions was integrated into the Doors Division as the Glass Solutions Business Unit. The strategic logic of the integration is, on the one hand, the better use of synergies in joint market development for contract sales and in procurement, on the other hand. In addition, the product range of the Wood Solutions Business Unit with functional and interior doors will be expanded to include shower doors, and in the medium term the glass doors and glass partitions area can be expanded for interiors. 

The focus of the Wood Solutions Business Unit continues to be on the strategic, multi-year investment programme for increasing productivity and expanding capacity with the goal of improving delivery performance and the market position.

Detailed reporting on the divisions can be found in the printed annual report 2021 on page 10 onwards and in the online report www.arbonia.com/report2021.

Intensification of sustainability
Highlights in 2021
To achieve the "1.5 °C" scenario of the Paris Climate Accords, companies are required to reduce their emissions from their own operations (Scope 1 and Scope 2) by more than 4% and reduce indirect emissions (Scope 3) by over 2.5% per year (in relation to the reference year) annually. Arbonia is committed to this. It has set itself the goal of reducing the intensity of its Scope 1-3 emissions on the basis of the Science Based Targets Initiative by 2035 so much that it will contribute to the global climate target despite further organic growth.

In the two divisions HVAC and Doors, Arbonia is not limited the vision of a zero emissions policy. Over the course of the reporting year, it also defined further ambitious medium-term goals for responsible handling and use of resources. In the year 2021, the company started the process of joining the UN Global Compact and thus commits itself to observing and promoting the ten universal principles. Since the beginning of the year, the Arbonia Group has officially been a member of the UN Global Compact.

Detailed information on the sustainability of the divisions can be found in the sustainability report, that can also be found within the annual report from page 26 onwards.

Guidance
With its focus on highly automated and efficient production sites as well as a future-oriented product portfolio that is the basis for the cost and market leadership in its target markets, Arbonia is optimally positioned to benefit from the sustainable drivers in the construction industry, despite ongoing challenges such as high raw material prices. 

Assuming intact sales and procurement markets as well as stable exchange rates, Arbonia therefore expects an increase in revenue of >5% when adjusted for currency and acquisition effects and EBITDA without one-time effects in the
range of CHF 145 million - CHF 150 million for the 2022 financial year. Due to the comfortable liquidity situation after the sale of the Windows Division and in line with the strategic orientation, individual investment projects will be moved up or expanded so that the investment rate for the year 2022 will end up in the order of ~10% revenue. 

The detailed reporting can be found in the annual report 2021 in the chapters «Letter to the shareholders» and «Divisions»; see www.arbonia.com/report2021. 

Contact
Fabienne Zürcher
Head Corporate Communications & Investor Relations
T +41 71 447 45 54
fabienne.zuercher@arbonia.com