2021 INTERIM RESULTS SEPTEMBER 2021
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
2021 INTERIM RESULTS SEPTEMBER 2021
H1 2021 HIGHLIGHTS • Record revenue, profits and operating cash flow • H1 ‘21 revenue grew 82% vs prior year led by unprecedented demand in US as well as solid growth in Europe & Australia and from new products • Introduced Somero SkyStrip® in June 2021 expanding portfolio to 18 products • Planning 50,000 sq. ft. expansion of Houghton, Michigan facility to expand operating capacity by 35% at an expected cost of US$ 9.5m • Board declared $0.09 interim dividend payable October 2021, 125% increase from prior year • Raising FY21 guidance – now prudently expect revenues of US$ 120.0m, EBITDA of US$ 42.0m, year-end net cash of US$ 36.0m 1 2021 Interim Results
2021 H1 RESULTS
FINANCIAL HIGHLIGHTS
US$ MILLIONS (EXCEPT PER SHARE DATA) H1 2021 H1 2020 CHANGE $ CHANGE %
Revenue $ 64.4 $ 35.3 29.1 82%
Adjusted EBITDA (1,2) 24.6 8.7 15.9 183%
Adjusted EBITDA margin (1,2) 38% 25% - 1,300bps
Profits before tax 23.5 7.5 16.0 213%
Adjusted net income (1,3) 18.2 5.8 12.4 214%
Diluted adjusted net income per share (1,3) $0.32 $0.10 $0.22 220%
Cash flow from operations 16.0 7.0 8.8 126%
Net cash (4) 32.8 28.9 3.9 13%
Interim dividend per share $0.090 $0.040 $0.050 125%
Notes:
(1) The Company uses non-US GAAP financial measures to provide supplemental information regarding the Company’s operating performance. See further
information regarding non-GAAP measures below.
(2) Adjusted EBITDA as used herein is a calculation of the Company’s net income plus tax provision, interest expense, interest income, foreign exchange loss, other
expense, depreciation, amortization, and stock-based compensation.
(3) Adjusted net income as used herein is a calculation of net income plus amortization of intangibles and excluding the tax impact of stock option and RSU
settlements and other special items.
(4) Net cash is defined as cash and cash equivalents less borrowings under bank obligations exclusive of deferred financing costs.
3 2021 Interim Results
SALES BY TERRITORY US$ MILLIONS H1 2021 H1 2020 CHANGE $ CHANGE % North America $ 50.9 $ 27.8 $ 23.1 83% Europe 6.4 4.1 2.3 56% China 1.7 1.8 (0.1) -6% Middle East 0.2 0.2 - - Latin America 0.8 0.2 0.6 300% Rest of World (1) 4.4 1.2 3.2 266% TOTAL $ 64.4 $ 35.3 $ 29.1 82% Notes: 1. ROW includes Australia, India, Southeast Asia, Korea & Russia 4 2021 Interim Results
SALES BY PRODUCT
US$ MILLIONS H1 2021 H1 2020 CHANGE $ CHANGE %
Boomed screeds(1) $ 32.1 $ 11.6 $ 20.5 177%
Ride-on screeds(2) 9.9 6.7 3.2 48%
Remanufactured machines 2.0 2.7 (0.7) -26%
3-D Profiler System® 4.6 3.5 1.1 31%
Somero Line Dragon® 2.3 1.7 0.6 35%
SkyScreed® 0.2 0.3 (0.1) -33%
Other(3) 13.3 8.8 4.5 51%
TOTAL $ 64.4 $ 35.3 $ 29.1 82%
Notes:
(1) Boomed Screeds include the S-22E, S-22EZ, S-15R, S-10A & SRS-4
(2) Ride-On Screeds include the S-940, S-485, & S-158C
(3) Other includes parts, accessories, services & freight, as well as other equipment consisting of the Broom+CureTM, STS-11M Topping Spreader,
CopperHead®, & Mini Screed® C
5 2021 Interim Results
OPERATING RESULTS
US$ MILLIONS H1 2021 H1 2020
Revenue $ 64.4 $ 35.3 Commentary:
Gross profit 37.7 19.3
• Gross margin of 58.6% up from
Operating expenses: 54.7% in H1 ‘20 due to efficiency
from higher volume, price
Selling, marketing & customer support 6.0 5.2 increases and favorable product
mix (lower % of remanufactured
Engineering & product development 1.1 1.0 machine sales)
General & administrative 7.4 5.6 • Operating expense increase in H1
‘21 reflects added personnel in
Total operating expenses 14.5 11.8 global sales and customer
support roles, in addition to higher
Operating income 23.2 7.5 compensation, benefits costs and
professional fees
Other income (expense) 0.3 -
• H1 ‘21 effective tax rate remained
Income before income taxes 23.5 7.5
comparable to prior year, in line
with go-forward expectations
Provision for income taxes 5.2 1.7
Net income $18.3 $5.8
6 2021 Interim Results
FINANCIAL POSITION
JUNE 30, DECEMBER
US$ MILLIONS 2021 31, 2020
Commentary:
Cash $ 32.8 $ 35.4 • Cash decreased US$ 2.6m
reflecting the US$ 17.4m April ‘21
Accounts receivable, net 9.4 6.4 dividend payment largely offset by
strong operating cash flows
Inventory 14.3 11.1
Prepaid & other 2.6 1.7 • Accounts receivable increased
US$ 3.0m with higher trading
Total current assets 59.1 54.6 volume and by comparison to an
historically low year-end balance
Other assets 25.6 24.2
Total assets $ 84.7 $ 78.8 • Inventory increased US$ 3.2m
with higher trading volume and
due to the addition of new
products and the management of
Current liabilities 16.1 12.3 stock levels to offset longer
supplier lead times
Other liabilities 4.0 3.0
Total liabilities 20.1 15.3 • Current liabilities increased US$
3.3m as operating expenses and
Stockholders’ equity 64.6 63.5 the volume of inventory
transactions increased in H2 ‘21
Total liabilities & equity $ 84.7 $ 78.8
7 2021 Interim Results
CASH FLOWS
US$ MILLIONS H1 2021 H1 2020 Commentary :
Net income $ 18.3 $ 5.8
• Operating cash flow increased
Adjustments to reconcile to cash provided by US$ 9.0m due to significantly
0.4 1.1 higher profit in the period, partially
operating activities
offset by net working capital
Working capital changes (2.7) 0.1 investment to support the higher
volume
Net cash provided by operating activities 16.0 7.0
• Cash used in investing activities
decreased US$ 0.9m with the H1
Net cash used in investing activities (0.6) (1.5) ‘20 completion of the 2019-20
Houghton expansion project
Payment of dividends (17.4) - • H1 ‘21 dividend payments were
comprised of a US$ 7.2m 2020
Borrowing (repayment) of debt and capital leases (0.1) (0.1) final ordinary dividend and a US$
10.2m 2020 supplemental
Share buy-back (0.1) - dividend
RSUs settled for cash (0.6) (0.2)
• H1 ‘21 share buybacks exhausted
Net cash used in financing activities (18.2) (0.3) the remaining 2020 US$ 1.0m
authorization, while the 2021 US$
1.0m authorization is unused as
of June 30, 2021 and targeted to
Effect of exchange rates on cash 0.2 (0.1)
be completed by year-end
Net increase (decrease) in cash $ (2.6) $ (5.1)
8 2021 Interim Results
STRATEGY UPDATE & OUTLOOK
GLOBAL GROWTH OPPORTUNITY
OUR VISION OUR MISSION
For our innovative technology to be used wherever To deliver world-class products and services because
horizontal concrete slabs are placed, a vast opportunity we’re passionate about our customers’ success and we
consisting of numerous unique applications strive to ensure our customers achieve their business
and profitability goals
GROWTH STRATEGY PROGRESS DURING THE YEAR
• Growing the structural high-rise product offering with the
PRODUCT INNOVATION launch of Somero SkyStrip®
• New products launched in 2020 contributed meaningfully to
H1 ‘21 revenue
Pushing the industry forward with innovative proprietary
designs that reduce manpower requirements, increase H1 2021 New Product Current Patents &
speed and safety while producing the highest quality Revenues Applications
concrete slabs for building owners
US$ 4.8m 91
• Promoting new products, such as SRS-4, in international
INTERNATIONAL MARKETS markets, and exploring the global SkyScreed® opportunity
• Added direct resources to Australian market
Deepening our global footprint by adding resources and
promoting adoption of wide-placement theory and % Non-Operational Staff Countries with Somero
quality concrete flooring standards Located Internationally Equipment
27% 93
10 2021 Interim ResultsRECENT NEW PRODUCTS
The Somero SkyStrip®, introduced in 2021, replaces manual
labor, reduces material damage and improves safety in the
process to strip plywood sheets used to shore concrete slabs
in structural high-rise buildings
The Somero Broom+CureTM, introduced in 2020, provides an
efficient alternative to manual application of curing agents and
texture to exterior concrete slabs to comply with American
Concrete Institute standards
The SRS-4, introduced in 2020, is a light weight, remote
controlled, easy to transport boomed laser screed machine
that provides a solution for hard-to-reach job sites
The SkyScreed® 36, introduced in 2020, is the next generation
laser screed machine for structural high-rise applications,
providing the operator with reach to screed an additional 1,000
square feet per placement on deck compared to the SkyScreed ®
25
11 2021 Interim ResultsPRODUCTS & APPLICATIONS
RELEASE PRODUCT APPLICATIONS MARKETS
BOOMED SCREEDS: 25,000-50,000+ ft2
2014 S-22EZ placements
warehouses,
SLAB ON
2012 S-15R manufacturing
GRADE
assembly plants,
2015 S-10A agricultural buildings
2020 SRS-4 S-22EZ S-15R SRS-4
RIDE-ON SCREEDS: 5,000-30,000 ft2
placements SLAB ON
2016 S-940 schools, medical and GRADE
retail centers, multi-
2014 S-485 level commercial SLAB ON
S-940 S-485 construction, DECK
2018 S-158C agricultural buildings
WALK-BEHIND SCREEDS: Small commercial,
SLAB ON
GRADE
2009 Mini Screed™ residential and multi-
Mini ScreedTM CopperHead® level placements
SLAB ON
2002 CopperHead ® XD™ 3.0 DECK
MATERIAL APPLICATION: Projects involving
SLAB ON
concrete hose pumps,
2012 STS-11M GRADE
projects requiring dry
shake-on hardener,
2017 Somero Line Dragon SLAB ON
applying curing agents
DECK
Somero Broom+CureTM and texture to exterior
2020 Somero Broom+CureTM Somero Line Dragon® STS-11M
concrete slabs
GRADING / EXTERIOR PAVING: Exterior concrete
paving and parking
SLAB ON
2004 SiteShape® System structures, exterior sub-
GRADE
grade
2000 3-D Profiler System® SiteShape® System 3-D Profiler System®
SKYLINE: SkyScreed® 36 Allows screeding on
structural high-rise and
2019 SkyScreed® 25 slab-on grade
HIGH-RISE
applications
2020 SkyScreed® 36 STRUCTURAL
Stripping of plywood
2021 SkyStrip
SkyStrip® sheets used in shoring
SkyScreed® 25
12 2021 Interim ResultsINTERNATIONAL GROWTH
In October 2020, Somero
established a Melbourne-based
sales and support team to cover
Australia/New Zealand
The team grew H1 ‘21 sales to
US$ 2.7m (H1 ‘20: US$ 0.9m)
with a focus on introducing and
promoting new products to the
region
Somero is exploring the international
opportunity for the SkyScreed – starting in
Europe with Australia to follow
Heightened focus on penetrating the
European market with recently launched
new products and growing the European
customer base in sub-markets of the region
where Somero’s value proposition is
strongest
13 2021 Interim ResultsESG – THE SUSTAINIBILITY JOURNEY
OUR GOAL OUR APPROACH
Ensuring sustainability by striking the right balance Developing a comprehensive ESG strategy that
between shareholder expectations and the needs includes regular engagement with stakeholders on
and concerns of our employees and customers, the material topics
communities we live in, and the environment
STAKEHOLDERS:
Community &
Customers Employees Investors
Environment
Material Topics: Material Topics: Material Topics: Material Topics:
- New product development - Working environment - Financial performance - Environmental goals
- High-quality products - Competitive compensation - Business strategy - Support of local charities
- Training & education - Career development - Market conditions
- Job-site safety - Risk management
- Return of capital
- Governance
2021 Engagement: 2021 Engagement: 2021 Engagement: 2021 Engagement:
- Direct sales/support - Training programs - Virtual roadshows - Addition of energy efficient
- Customer led product - Investing in remote working - Recorded presentations lighting
development tools - Trading updates - Exploring CO2 study
- Trade shows - Performance management - Commitment to add 4th - Supporting and donating to
- Virtual information sessions independent director local charities
- Utilizing 3rd party advisor to
enhance ESG reporting
14 2020 Interim Results2021 OUTLOOK
• Confident in active US non-residential construction
market & momentum carried into H2 ‘21
• Pleased with health of European non-residential
construction market supported by reported customer
backlogs, and the opportunity from new products
• Encouraged by traction gained in Australia with shift
to go-direct model and the opportunity from new
products
• Multiple factors impacting near-term prospects in
China while long-term growth hinges on demand for
quality
• Expect to see opportunities for growth from other
regions that includes new products
• Raising FY21 guidance, with prudent consideration of
risks that may impact H2 ‘21 trading - now expect:
- FY21 revenues of US$ 120m (previous US$ 110m),
- EBITDA of US$ 42m (previous US$ 35m),
- December 31 net cash of US$ 36m (previous US$
33m) with consideration to anticipated spend on
planned facility expansion
15 2021 Results PresentationBUSINESS MODEL
OUR
MISSION
WHY? HOW? WHAT?
It all starts with “Why?” For every How we pursue our mission makes us We provide equipment with unsurpassed
Somero® employee the answer is clear. unique. quality and performance supported by
We work hard to deliver world-class unparalleled global service, technical
Somero’s business is far more than
products and services because we’re support, training and education.
simply selling equipment. Providing
passionate about our customers’ success customers access to unparalleled Somero offers a wide portfolio
and strive to ensure our customers industry expertise, training and support is of products that cover concrete slab
achieve their business and profitability core to our success as an educator and placements in all types of construction
goals. innovator in the concrete industry. projects.
Our customers see this passion day-in Somero also sells parts and accessories
and day-out and as a result, we earn and provides service and training to
their loyalty and retain them as a customers to keep their machines up
customer for life. and running and operating optimally.
17 2021 Interim ResultsOUR
MODEL
WHAT WE DO WHAT MAKES US DIFFERENT
Somero’s laser-guided technology and wide-placement INNOVATIVE PRODUCT INDUSTRY EXPERTISE,
methods have been specified for use in a wide range LEADERSHIP TRAINING AND SUPPORT
of construction projects. • Pioneered Laser • Proven commitment to exceptional
• Screed® machine market in 1986 classroom/ job-site training
• Product portfolio grown to 18 • 24/7 direct global support (in
products 10 mins, all major languages)
• Overnight spare parts delivery,
• Designs protected by 91
next day world travel
patents/applications
• Somero Concrete College &
• Product development fueled by Institute
Warehousing Assembly Commercial customer engagement
plants construction
OUR BENEFICIARIES
KEY BENEFITS TO OUR CUSTOMERS KEY BENEFITS TO OUR EMPLOYEES
Exterior Parking Retail
• Increases quality • Challenging and rewarding work
paving structures centers • Productivity environment full of opportunity
• Profit • Investment in training to help each
employee reach their full potential
WHO WE WORK WITH • Direct access to Somero expertise,
training & support
Somero operates in markets across the globe, selling KEY BENEFITS TO OUR INVESTORS
products in 90+ countries with minimal direct competition. KEY OUTCOMES FOR BUILDING • Strong, consistent financial
We work with small, medium and large concrete OWNERS AND END-USERS performance
contractors and self-performing general contractors. • Operational efficiency • Significant growth opportunity in
Our equipment has been used in construction projects • Improved physical appearance new and existing markets
for a wide array of the world’s largest organizations. • Lower floor maintenance cost • Strong, unleveraged financial
position
• Lower forklift repair cost
• Disciplined return of cash to
18 2021 Interim Results shareholdersTHE TRAINING & EXPERTISE ADVANTAGE
Somero does more than sell equipment – Somero provides access to world class training &
expertise that helps customers build more profitable businesses.
In-Person. The Somero On-demand. Somero’s Virtual. Somero’s virtual
Concrete Institute in Fort Learning Management platform enables a trainer to
Myers, FL has a 48-person System provides a broad interact with trainees in a live
multi-media classroom and a catalogue of training materials format regardless of
10,000 ft2 concrete placing enabling a trainee to learn in geographic or time zone
center - a controlled venue to the absence of a physical constraints.
place, screed, finish, test, and trainer in over 12 languages.
tear out concrete slabs on a
daily basis.
19 2021 Interim ResultsAPPENDIX
HISTORICAL RESULTS
YEARS ENDED DECEMBER 31,
US$ Millions
(except per share data) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Revenue 66.4 51.9 24.2 21.0 21.9 32.2 45.1 59.3 70.2 79.4 85.6 94.0 89.3 88.6
Revenue growth 19% -22% -53% -13% 4% 47% 40% 32% 18% 13% 8% 10% -5% -1%
Cost of sales 28.8 23.1 12.5 11.2 11.7 16.5 21.6 27.3 31.0 34.3 36.9 40.4 38.6 39.8
Gross Profit 37.6 28.8 11.7 9.8 10.2 15.7 23.5 32.0 39.2 45.1 48.8 53.6 50.7 48.8
Gross profit % 57% 55% 48% 47% 47% 49% 52% 54% 56% 57% 57% 57% 57% 55%
SG&A 24.3 26.0 27.4 11.5 12.0 14.3 17.1 19.4 21.6 23.9 23.3 24.5 24.1 24.9
Operating income/(loss) 13.3 2.8 -15.7 -1.7 -1.8 1.4 6.4 12.6 17.6 21.2 25.4 29.2 26.6 23.9
Interest expense -1.5 -0.8 -1.0 -0.5 -0.4 -0.3 -0.2 -0.1 -0.2 -0.1 -0.1 -0.1 - -
Other income -1.1 0.2 0.1 -0.2 -0.1 0.1 0.3 -0.1 - 0.2 0.4 - 0.4 0.7
Income before tax 10.7 2.2 -16.6 -2.4 -2.3 1.2 6.5 12.4 17.4 21.3 25.7 29.1 27.0 24.6
Tax 3.8 0.5 -1.2 -0.2 - 0.2 1.1 -2.1 5.8 7.0 7.3 7.5 5.9 5.8
Net income 6.9 1.7 -15.4 -2.2 -2.3 1.0 5.4 14.5 11.6 14.3 18.4 21.5 21.1 18.8
Other data:
Adjusted EBITDA(1) 16.5 6.0 0.8 1.0 0.9 4.2 9.0 15.0 20.0 24.6 28.0 30.8 28.7 26.1
Adjusted EBITDA margin 25% 12% 3% 5% 4% 13% 20% 25% 29% 31% 33% 33% 32% 29%
Depreciation &
2.8 2.7 2.7 2.6 2.6 2.6 2.4 2.0 2.3 2.7 2.1 1.2 1.1 1.1
amortization
Capital expenditures 0.5 0.6 - - 0.1 0.6 0.8 1.2 4.2 4.4 2.2 0.8 3.0 3.7
21 2021 Interim ResultsTHANK YOU
You can also read
