Arbon, 26 October 2021 - At the Capital Markets Day 2021, which takes place today in Platting (D), Arbonia will present indications on the financial target setting for the next five years (until 2026) as well as an update on the strategy of its two divisions HVAC and Doors.
 
In addition to the financial outlook and strategic orientation, the focus of the Capital Markets Day will be on the HVAC Division's Research & Development. This department is responsible for a variety of product innovations such as the new energy storage system, the new generation of heat pumps with higher efficiency, and the electrostatic filter technology. Additionally, the participants will be given an insight into the highly automated production at the Platting site (D)

Arbonia remains focused on profitable growth. For the years 2021 to 2026, it expects average annual organic revenue growth (CAGR) at Group level of > 5% (before currency and acquisition effects). It furthermore expects EBITDA after holding costs for the 2026 financial year to be around CHF 200 million. These financial targets assume a stable market environment, steady procurement markets, stable exchange rates and do not take into account any acquisitions. 

Due to the ongoing comprehensive capex program - in particular for the final stage of the capacity expansion of door production at the Prüm site (D) - maintenance and growth investments will be significantly and gradually reduced from 2023 onwards and will be within the target range of 4-5% of revenues as of 2025. Due to the decline in investment activity, the free cash flow will develop positively from 2023 and lead to the cash conversion ratio (FCF in % of net profit) being sustainably above 100% from the 2024 financial year. 

On the basis of these key figures, Arbonia aims to maintain a continuous, ordinary dividend policy with an annual increase of 15% (previously 10%) from the 2022 financial year onwards, which means that Arbonia will still show a net cash position at the end of the planning period (2026; before any acquisitions). 

Arbonia's business continued to develop positively in the third quarter, not least due to the price increases implemented. However, selective supply bottlenecks and high material prices continue to present a challenging environment.

HVAC Division
The focus of the HVAC Division can be summarised by the term "comfortable and healthy indoor climate". The division offers a comprehensive product portfolio and integrated system solutions for residential and commercial areas - from heat/cold generation, energy storage, and heat/cold distribution up to ventilation and air filtration. The division thereby provides the answer to the question of how to live and work in a climate-friendly way in the future. This system, consisting of energy-efficient products, forms the basis for opening up new markets and gaining additional market shares. In 2015, around 75% of the division's revenue came from conventional products such as flat panel radiators and only 25% was from growth products such as ventilation units, heat pumps, underfloor heating and fan coils. Today, the revenues are split roughly equally between the two product areas, and by 2026 the division expects the share of growth products to increase to over 60% of its revenues.

Based on its strategy, the division aims to achieve net revenues of around CHF 800 million in 2026. It expects that the corresponding EBITDA margin will reach > 12.5%.

The construction of the new heat pump production plant in the Czech Republic that is to significantly expand capacities from currently around 3'000 units per year for the rapidly growing market fuelled by climate targets began in the first half-year of 2021. The start of production is scheduled for mid-2022. By 2024, the production plant will reach its targeted production capacity of up to 20'000 heat pumps per year. 

Doors Division
The Doors Division continues to work towards the goal of expanding its leading position as a Central European supplier of doors and glass solutions. Through investments into increasing capacity and productivity already made and to be made in the coming year, as well as by increasing market shares in its home and target markets, the division aims to achieve net revenues of around CHF 725 million and a corresponding EBITDA margin of > 15.0% by 2026. 

The capacity expansion of the Doors Division is happening faster than originally planned. Since 2017, the capacity has already been increased by around 25% from around 2.1 million doors and frames respectively to currently 2.6 million per year. Once the majority of the growth investments have been completed in 2023 with the commissioning of the new plant for door frames in Weinsheim (D), the division will be able to produce around 3.4 million doors and frames each per year with the same number of employees. The capacity increase of over 60% since 2017 will allow the division to discontinue the expensive shifts currently required due to the high demand and order volume, which will have an additional positive effect on margins. 

Sustainability
Arbonia, with its divisions and as a group, is dedicated to a consistent and comprehensive commitment to sustainability. In the current year, it has further intensified its activities in this area after publishing an ESG report for the 2020 financial year in accordance with GRI standards for the first time. When the 2021 annual results are published in March 2022, Arbonia will increase its transparency in this regard and present specific quantitative and qualitative targets. Among other things, it will define a path for reducing CO2 emissions from its own operations (Scope 1 and 2) for the coming years based on the Science-Based Targets initiative.

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