CAREL: The Highest Revenue Increase In The Last 10 Years

Date: 10 May 2021
CAREL: The Highest Revenue Increase In The Last 10 Years
The CAREL Industries Board of Directors has approved the consolidated results as of 31 March 2021.

Financial Highlights

• Consolidated revenues of € 97.6 million, +24.0% compared to the first three months of 2020 (+26.9% at constant exchange rates). +21.9% on the first three months of 2019;
• Consolidated EBITDA of € 22.0 million (22.5% of revenues), +53.2% compared to the first three months of 2020;
• Consolidated net income of € 13.3 million, +75.6% compared to the first three months of 2020;
• Negative consolidated net financial position of € 44.9 million, compared to € 49.6 million reported on 31 December 2020.

CEO Statement

Francesco Nalini, Managing Director of the Group, commented: “The key event of the first quarter of the year was the launch of the global COVID-19 vaccine campaign, which restored optimism by enabling a strong economic recovery, particularly in certain regions including China (Q1 2021 GDP +18.3%) and the US (Q1 2021 GDP +6.4%). In this scenario, CAREL has managed to seize significant business opportunities thanks to the consistent and continuous implementation of its strategic mainstays: customer focus, production resiliency and constant innovation. This accelerated performance in the sectors that had already seen an improvement in the second half of 2020, together with a strong recovery in those that had suffered most during the pandemic: industrial air conditioning and food service refrigeration. This resulted in the highest revenue increase in the last 10 years amounting to +26.9% at constant exchange rates, which was then reflected in an increase in EBITDA of over 50% and in profit of over 75%. The extent of these results remains largely unchanged when compared to the 2019 numbers, which were not impacted by the pandemic. However, as is always the case with CAREL, these performances are not a point of arrival but of departure, and they give us even greater enthusiasm for tackling the challenges that 2021 will bring, not least the ongoing pandemic and the shortage of raw materials that is affecting the world economy.”


Consolidated revenues amount to Euro 97.6 million, compared to Euro 78.4 million as at 31 March 2020, an increase of 24.0%. Net of the negative impact of currency exchange rates, which weighed in at around Euro 2 million, mainly due to the weakness of the US and Brazilian currencies, the increase would be +26.9%. These results take on an even more positive connotation if one considers that growth remains well above 20% even when comparing them with the revenue level recorded in the first quarter of 2019, which does not include any pandemic impact.

The performance described above is based on two main elements: the first is a generalised optimism linked to the COVID-19 worldwide vaccination campaign that started in December and January: this, together with other elements, led to a strong rebound in the economy in some key geographical areas (China and the United States) and, therefore, a generalised increase in demand; the second is once again confirmation of the Group's ability to seize significant business opportunities in particularly difficult scenarios (as happened in the first part of 2020) as well as in strong expansion scenarios such as the current one. From this point of view, it is important to emphasise that the increase is more than 20% (at constant exchange rates) in all geographical areas and in the two macro sectors "HVAC" and "Refrigeration", testifying to the flexibility and resilience of CAREL's strategy, capable of adapting to the most diverse markets and locations.

The Group's largest region, EMEA (Europe, Middle East, Africa), which accounts for 73% of revenues, closed the first quarter of 2021 with a 22.1% increase on a constant currency basis, thanks to a general acceleration in demand, to the recovery of certain industrial sectors that had been significantly impacted by the pandemic in 2020 (e.g. automotive) and to particularly strong performances in the high-efficiency heat pump and data centre cooling sectors. There was also excellent progress in refrigeration applications: a new drive to invest in the food retail sector, also due to the European regulations on environmental sustainability, combined with a recovery in the food service sector. APAC (Asia-Pacific), which represents about 14% of the Group's revenues, shows an increase (at constant exchange rates) of 47.3% compared to the results recorded in the same period last year (and impacted by the closure of the Souzhou plant for a few million Euro). This performance is proof of the effectiveness of the strategy implemented by the Group in the region, based on a strong focus on the end customer and a broad and flexible production footprint (tripling the size of the Souzhou plant between 2018 and 2019), which has proved successful even at a time when demand is booming (Q1 2021 GDP in China +18.3%). North America, which represents approximately 11% of the Group's revenues, posted a 29.9% increase (net of foreign exchange impact). The turnaround from the 2020 poor results is due to the combination of improved execution and implementation of the Group's strategic and operational policies together with a strong upturn in the economic scenario. Finally, South America (which accounts for approximately 2% of the Group's total turnover), net of the negative currency exchange effects, recorded an increase of 62.0%, mainly due to the positive performance recorded in Brazil.

As far as the individual business areas are concerned, net of currency exchange effects, both registered increases of more than 25%. In fact, Refrigeration is up 28.4% (25.0% at actual exchange rates), benefiting from the recovery of the investment cycle in the food retail sector (supermarkets/hypermarkets/convenience stores), together with the constant increase of the global market share of Group. Positive results in the “Food service” from which some signs of recovery come. The HVAC sector also closed the first quarter of 2021 with strong positive results (+27.2% at constant exchange rates, +24.4% at current exchange rates): in addition to the acceleration of trends already seen in the second half of 2020 in certain applications (particularly high-efficiency heat pumps and data centres), there was also a recovery in the more cyclical production sectors, particularly industrial ones. On the other hand, demand in the Wellness sector is still sluggish.

Business Outlook

The first quarter of 2021 was first and foremost characterised by a general recovery in global demand due to the launch of the COVID-19 vaccine campaign, albeit with important differences depending on the geographical areas considered. However, significant uncertainties remain due to the recent evolution of infections in some countries (including Brazil and India) and the spread of multiple viral variants.

Part of the acceleration in global demand is the generalised shortage of raw materials, particularly electronics. The severity, duration and consequences of this shortage in the medium term are as yet unseen and unquantifiable, although there are obvious strains on the major commodity prices.

In any case, taking into account the excellent results achieved during the first quarter of the year and the current level of the order book, the Group believes it can close 2021 with double-digit percentage growth in consolidated revenue with a floor of +12%. This is in the absence of any significant deterioration in the current scenario, particularly in relation to the elements described above.

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