Dometic : Q42022 Report ENG

QUARTERLY REPORT

Q4 2022

Solna, January 27, 2023

STRONG OPERATING CASH FLOW

FOURTH QUARTER 2022

• Net sales were SEK 6,172 m (5,542); an increase of 11%, of which -11% was organic growth.
• Operating profit (EBITA1)) before items affecting comparability2) was SEK 430 m (632), corresponding to a margin of 7.0% (11.4%).
• Items affecting comparability were SEK -32 m (-37) and were mainly related to activities in the previously announced global restructuring programs.
• Profit for the quarter was SEK 27 m (197).
• Earnings per share were SEK 0.09 (0.62). Adjusted earnings per share3) were SEK 0.54 (0.98).
• Cash flow for the quarter was SEK 331 m (-5,593). Operating cash flow was SEK 1,117 m (546).
• Net debt to EBITDA leverage ratio at the end of the period was 3.0x (2.6x) and at the same level as at the end of the third quarter 2022.

FULL YEAR 2022

• Net sales were SEK 29,764 m (21,516); an increase of 38%, of which -3% was organic growth.
• Operating profit (EBITA1)) before items affecting comparability2) was SEK 3,931 m (3,348), corresponding to a margin of 13.2% (15.6%).
• Items affecting comparability were SEK -532 m (-123) and were mainly related to activities in the previously announced global restructuring programs.
• Profit for the period was SEK 1,784 m (1,726).
• Earnings per share were SEK 5.58 (5.58). Adjusted earnings per share3) were SEK 8.32 (6.75).
• Cash flow for the period was SEK -127 m (-3,579). Operating cash flow was SEK 2,268 m (1,749).
• The Board of Directors proposes a dividend of SEK 1.30 (2.45) per share for 2022.

FINANCIAL OVERVIEW

	Q4	Q4	FY	FY
SEK m	2022	2021	2022	2021
Net sales	6,172	5,542	29,764	21,516
Operating profit (EBITA¹⁾) before items affecting comparability²⁾	430	632	3,931	3,348
% of net sales	7.0%	11.4%	13.2%	15.6%
Operating profit (EBITA¹⁾)	398	595	3,399	3,224
% of net sales	6.4%	10.7%	11.4%	15.0%
Operating profit (EBIT)	236	470	2,789	2,855
% of net sales	3.8%	8.5%	9.4%	13.3%
Profit (loss) for the period	27	197	1,784	1,726
Earnings per share, SEK	0.09	0.62	5.58	5.58
Adjusted earnings per share, SEK³⁾	0.54	0.98	8.32	6.75
Cash flow for the period	331	-5,593	-127	-3,579
Operating cash flow	1,117	546	2,268	1,749
Net debt to EBITDA leverage ratio	3.0	2.6	3.0	2.6
RoOC	23.1%	36.9%	23.1%	36.9%

¹⁾Before Amortization of acquisition-related intangible assets ²⁾See Note 6 Items affecting comparability

³⁾Excludes the impact from Amortization of acquisition-related intangible assets and items affecting comparability

See definitions of measures and KPIs at the end of the report. See detailed reconciliation tables on www.dometicgroup.com/investors for reconciliation of non-IFRS measures to IFRS

DOMETIC Q4 REPORT ─ SOLNA, JANUARY 27, 2023 │ 1

CEO COMMENTS

In 2022 we continued to take significant steps forward on our transformational agenda. In an extremely challenging macroenvironment impacted by geopolitical uncertainty, high inflation, increasing interest rates and high retail inventories, we delivered record-high net sales of SEK

29.8 b (21.5) with an EBITA1) of SEK 3,9 b (3.3). We are continuing to transition into a more diversified and resilient company with greater exposure to low-ticket discretionary spend products. Our net sales have more than doubled compared to five years ago, and Distribution and Service & Aftermarket's share has grown to 56 percent (39).

In the fourth quarter of 2022 net sales growth was 11 percent and operating cash flow more than doubled to SEK 1,117 m (546). Organic net sales declined by -11 percent mainly due to reduced Service & Aftermarket sales as retailers globally are rebalancing their inventory levels. In addition, sales to Recreational Vehicle manufacturers (RV OEM) in the US declined as expected.

EBITA1) was SEK 430 m (632), corresponding to a margin of 7.0 percent (11.4). The decline was mainly attributable to the EMEA and Americas segments, while the Marine segment continued to deliver strong results, with 11 percent organic net sales growth and improved EBITA1) margins of 25.5 percent (22.9). The sales mix, with lower share of Service & Aftermarket net sales, as well as currency movements had negative effects on the margin for the EMEA segment. In addition, the EMEA result was impacted by extraordinary logistics- related costs and by inefficiencies in manufacturing, which are expected to gradually decline in 2023. The margin for the Americas segment was negatively impacted by significantly lower net sales in both RV OEM and Service & Aftermarket. The global restructuring programs are running at high pace, and our workforce has declined by more than 1,600 resources compared to a year ago (pro forma2)). We are taking further measures to address the situation in EMEA and Americas and we expect to see gradual improvements during 2023.

In its seasonally weakest quarter, the Igloo business delivered a result in line with last year with a mid single-digit negative EBITA margin. The Igloo business has shown significant improvement in 2022 and the synergy activities are progressing as planned. Full-year 2022 organic net sales growth for Igloo was 16 percent, and the EBITA margin was significantly above that of last year. ACON, the seller of Igloo, has filed a lawsuit against Dometic making certain claims related to the Stock Purchase Agreement ("SPA"). We are confident that the lawsuit lacks any merit, are vehemently contesting this lawsuit and have filed a motion to dismiss the case. With respect to the class action complaint against Dometic, pending from 2016, a federal court in Florida has dismissed the case in its entirety. The case has been closed with no liability for Dometic.

The innovation index was 17 percent (26) and improved compared to the third quarter. Semiconductor supply constraints have impacted product launches in 2022, but our pipeline of new products is strong and we are confident on achieving our target of 25 percent.

Operating cash flow improved and our inventory levels declined as expected in the quarter. The net debt to EBITDA leverage ratio remained as in the third quarter at 3.0x. The focus on cash flow across the Group is strong and we are committed to achieving our net debt to EBITDA leverage ratio target of around 2.5x.

We are very proud of the results that the entire organization has achieved in an extremely challenging 2022. Thanks to our dedicated and highly professional employees, we have taken several important steps on our strategic journey, while at the same time taking necessary short-term cost reduction actions to protect margin and cash flow.

We are optimistic about the long-term trends in the Mobile Living industry, however it is difficult to predict how the current macroeconomic situation will impact the business in the short term. We anticipate a gradual recovery in demand in Service & Aftermarket over the coming quarters, and continued stable development in Distribution. In OEM we foresee persistently weakened demand over the coming quarters. In this environment we will continue to drive our strategic agenda to deliver on our targets, while at the same time remaining agile to quickly respond to the short-term market trends.

Given the current uncertain market conditions and the last two years' extensive M&A activities, the Board of Directors proposes a dividend for 2022 of SEK 1.30 (2.45).

Net Sales, SEK m

Q							LTM
8,000							40,000
6,000							30,000
4,000							20,000
2,000							10,000
0							0
Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
	2021			2022
	Quarterly			Last 12 months (LTM)

Op. profit (EBITA) before i.a.c., SEK m

Q							LTM
1,600							5,000
1,200							4,000
800							3,000
						2,000
400							1,000
0							0
Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
	2021			2022

QuarterlyLast 12 months (LTM)

	Operating cash flow, SEK m
Q	LTM
1,500	3,000

1,000	2,000
500	1,000
0	0

	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
-500		2021				2022	-1,000
		Quarterly			Last 12 months (LTM)

Juan Vargues, President and CEO

1) before items affecting comparability 2) Pro forma including acquisitions

DOMETIC Q4 REPORT ─ SOLNA, JANUARY 27, 2023 │ 2

FINANCIAL SUMMARY - FOURTH QUARTER 2022

Net sales were SEK 6,172 m (5,542), an increase of 11% compared with the same quarter last year. This comprised -11% organic growth, 15% currency translation and 8% M&A.

Gross profit was SEK 1,448 m (1,444) corresponding to 23.4% (26.1%) of net sales. A majority of the margin decline is due to an expected dilutive effect from the Igloo business that was consolidated from November, 2021.

Sales and administrative expenses totaled SEK -849m (-759)corresponding to 13.8% (13.7%) of net sales. The increase is mainly related to acquired companies.

Research and development expenses were SEK -126m (-110).In addition, Research and development expenses of SEK -23m (-3)were capitalized in the quarter. In total, this corresponds to 2.4% (2.0%) of net sales.

Other operating income and expenses were SEK -43m (57) negatively impacted by currency revaluation effects and currency hedge effects. The currency hedge effects were partly offset by currency transaction effects mainly impacting gross profit.

Operating profit (EBITA) before amortization of acquisition- related intangible assets and items affecting comparability was SEK 430 m (632). The corresponding margin was 7.0% (11.4%). The decline was mainly attributable to segments EMEA and Americas. The EBITA for segment EMEA was negatively impacted by the sales mix with a lower share of Service & Aftermarket net sales, currency effects, extraordinary logistics- related costs and inefficiencies in manufacturing. Segment Americas EBITA was negatively impacted by significantly lower net sales in both RV OEM and Service & Aftermarket. In addition, the acquired Igloo business had as expected a dilutive effect on the Group margin. Currency revaluation and currency hedge effects had also a negative impact on the margin. The gross impact from tariffs was SEK -32m (-39).

Amortization of acquisition-related intangible assets were SEK -162m (-125).

Items affecting comparability totaled SEK -32m (-37)and were mainly related to activities in the previously announced global restructuring programs.

Operating profit (EBIT) was SEK 236 m (470). The corresponding EBIT margin was 3.8% (8.5%). The margin was negatively impacted by a lower EBITA1) margin and by increased amortization of acquisition-related intangible assets.

Financial items totaled a net amount of SEK -166 m (-187), including SEK -161 m (-104) in interest on external bank loans. Other FX revaluations and other items amounted to SEK -25 m (-84) and financial income amounted to SEK 20 m (1).

Taxes totaled SEK -43 m (-86), corresponding to 61% (30%) of profit before tax. Paid tax was SEK -415 m (-132) and impacted by deferred tax payments related to previous years.

Profit (loss) for the period was SEK 27 m (197).

Earnings per share were SEK 0.09 (0.62). Adjusted earnings per share were SEK 0.54 (0.98).

Operating cash flow was SEK 1,117 m (546).

Cash flow was SEK 331 m (-5,593). Net cash flow from investments was SEK -410 m (-6,015). Net cash flow from financing was SEK -183 m (-146).

Global restructuring programs. Dometic has two programs running. The first program was initiated 2019 targeting an annual saving of SEK 400 m to be fully realized by mid 2023 with a total cost estimated to SEK 750 m. An additional program was announced in the second quarter 2022, targeting an annual

saving of SEK 200 m to be fully realized by the end of 2023 with a total cost estimated to SEK 200 m. During the quarter total costs related to the two programs amounted to SEK -20 m (-36).

Other significant events in the quarter. A federal court in Florida has dismissed an alleged class action complaint against Dometic with prejudice. The case had been pending since 2016. Dometic always remained firm in its position that the allegations were without merit. The case is now closed, with no liability for Dometic.

ACON, the seller of Igloo, has filed a lawsuit against Dometic making certain claims related to the Stock Purchase Agreement ("SPA"). Dometic is confident that the lawsuit lacks any merit, is vehemently contesting this lawsuit and has filed a motion to dismiss the case.

Significant events after the quarter. Brian Garofalow, Dometic CMO, left the Company on January 6, 2023 for another external assignment. An interim CMO has been appointed and the recruitment process for a permanent CMO has started.

There have been no other significant events that have impacted the financial reporting after the balance sheet date.

FINANCIAL SUMMARY - FULL YEAR 2022

Net sales were SEK 29,764 m (21,516), an increase of 38% compared with full year 2021. This comprised -3% organic growth, 11% currency translation and 30% M&A.

Operating profit (EBITA) before amortization of acquisition- related intangible assets and items affecting comparability was SEK 3,931 m (3,348). The corresponding margin was 13.2% (15.6%). The acquired Igloo business had as expected a dilutive effect on Group margin. In addition, the margin was negatively impacted by the sales mix, with a lower share of Service & Aftermarket net sales. Furthermore the margin was negatively impacted by extraordinary logistic related costs in EMEA. Currency effects had a positive impact on the margin. The gross impact from tariffs was SEK -163m (-189).

Items affecting comparability totaled SEK -532m (-123)and were mainly related to activities in the previously announced global restructuring programs.

Operating profit (EBIT) was SEK 2,789 m (2,855). The corresponding EBIT margin was 9.4% (13.3%). The margin was negatively impacted by a lower EBITA1) margin, by increased items affecting comparability and by increased amortization of acquisition-related intangible assets.

Financial items totaled a net amount of SEK -351 m (-499), including SEK -531 m (-374) in interest on external bank loans. Other FX revaluations and other items amounted to SEK 135 m (-138) and financial income amounted to SEK 45 m (13).

Taxes totaled SEK -654 m (-630), corresponding to 27% (27%) of profit before tax. Current tax amounted to SEK -723 m (-715) and deferred tax to SEK 70 m (84). Paid tax was SEK -991 m (-1,009), correspondinga to a paid tax rate of 41% (43%). Paid tax was impacted by deferred tax payments related to previous years.

Profit (loss) for the period was SEK 1,784 m (1,726).

Earnings per share were SEK 5.58 (5.58). Adjusted earnings per share were SEK 8.32 (6.75).

Operating cash flow was SEK 2,268 m (1,749).

Cash flow was SEK -127 m (-3,579). Net cash flow from investments was SEK -1,426 m (-8,760), of which acquisitions were SEK -847 m (-8,555) and investments in fixed assets were SEK -593 m (-413). Net cash flow from financing was SEK -570 m (4,028).

DOMETIC Q4 REPORT ─ SOLNA, JANUARY 27, 2023 │ 3

Financial position. Net debt to EBITDA leverage ratio was 3.0x (2.6x) at the end of the period. During the fourth quarter the annual impairment test of all Cash Generating Units (CGU), which is required under IFRS, was performed. None of the CGU's tested were impaired as carrying amount exceeded the recoverable amount. Consequently, no impairment losses have been recognized in 2022.

Return on Operating Capital (RoOC) was 23.1% (36.9%).

Global restructuring programs. During the period total costs amounted to SEK -499m (-86).Two additional sites and more than 900 additional employees were affected. Since the start, 24 sites and more than 1,700 employees have been affected with a total cost of SEK -817m.

Employees. Number of employees in terms of headcount was 8,487 (9,095) at the end of the period.

1. before items affecting comparability

FINANCIAL PERFORMANCE BY SEGMENT

	Q4	Q4	Change (%)	FY	FY	Change (%)
SEK m	2022	2021	Reported	Organic⁽¹⁾	2022	2021	Reported Organic⁽¹⁾
Americas	1,192	1,516	-21%	-41%	6,780	5,970	14%		-15%
EMEA	1,602	1,520	5%	-6%	7,970	6,981	14%		-2%
APAC	586	546	6%	-2%	2,231	1,961	13%		-4%
Marine	1,651	1,272	30%	11%	6,695	5,404	24%		8%
Global	1,142	688	66%	-3%	6,086	1,201	407%		4%
Net sales	6,172	5,542	11%	-11%	29,764	21,516	38%		-3%
Americas	-60	72			330	398
EMEA	-62	93			838	948
APAC	129	149			555	525
Marine	422	292			1,743	1,375
Global	1	25			464	102
Operating profit (EBITA⁽²⁾) before i.a.c.⁽³⁾	430	632			3,931	3,348
Americas	-5.1%	4.7%			4.9%	6.7%
EMEA	-3.8%	6.1%			10.5%	13.6%
APAC	22.0%	27.3%			24.9%	26.8%
Marine	25.5%	22.9%			26.0%	25.4%
Global	0.1%	3.6%			7.6%	8.5%
Operating profit (EBITA) before i.a.c. %	7.0%	11.4%			13.2%	15.6%

⁽¹⁾Net sales growth excluding acquisitions/divestments and currency translation effects. ⁽²⁾Before Amortization of acquisition-related intangible assets.

⁽³⁾See note 4 for Operating profit (EBIT) by segment and note 6 for details on i.a.c. (items affecting comparabilty).

Previous periods have been restated according to the new segment reporting structure, see note 4 for further details on the financial performance by segment and the 2021 Annual and Sustainability Report note 5.

SEGMENT AMERICAS

FOURTH QUARTER 2022 NET SALES AND OPERATING PROFIT

Segment Americas reported net sales of SEK 1,192 m (1,516), representing 19% (27%) of Group net sales. Total growth was -21%, of which -41% was organic growth, 20% currency translation and 0% M&A. Net sales declined in all application areas. The organic net sales decline was due to significantly lower RV OEM and Service & Aftermarket net sales. This was partly offset by stronger CPV (Commercial and passenger vehicles) OEM net sales.

Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK -60 m (72), corresponding to a margin of -5.1% (4.7%). The decline was driven by the significant net sales reduction. Items affecting comparability totaled SEK -5 m (-30). Amortization of acquisition-related intangible assets totaled SEK -31 m (-27). Operating profit (EBIT) was SEK -97 m (15), corresponding to a margin of -8.1% (1.0%).

FULL YEAR 2022 NET SALES AND OPERATING PROFIT

Segment Americas reported net sales of SEK 6,780 m (5,970), representing 23% (28%) of Group net sales. Total growth was 14%, of which -15% was organic growth, 17% currency translation and 12% M&A. Net sales growth in application areas Climate, Power & Control and Other applications was partly offset by decline in application area Food & Beverage. The organic net sales decline was driven by lower Service & Aftermarket net sales.

Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 330 m (398), corresponding to a margin of 4.9% (6.7%). The sales mix, with a lower share of Service & Aftermarket, had a negative impact on the margin. This was partly offset by currency effects. Items affecting comparability totaled SEK -151 m (-55) and were mainly related to activities in the global restructuring programs. Amortization of acquisition-related intangible assets totaled SEK -118 m (-97). Operating profit (EBIT) was SEK 61 m (246), corresponding to a margin of 0.9% (4.1%).

SEGMENT EMEA

FOURTH QUARTER 2022 NET SALES AND OPERATING PROFIT

Segment EMEA reported net sales of SEK 1,602 m (1,520), representing 26% (27%) of Group net sales. Total growth was 5%, of which -6% was organic growth, 8% currency translation and 3% M&A. Net sales growth was driven by application areas Power & Control and Food & Beverage. The organic net sales decline was driven by lower Service & Aftermarket net sales.

DOMETIC Q4 REPORT ─ SOLNA, JANUARY 27, 2023 │ 4

Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK -62 m (93), corresponding to a margin of -3.8% (6.1%). The margin was negatively impacted by the sales mix with a lower share of Service & Aftermarket net sales. In addition, inefficiencies in manufacturing and currency effects had a negative impact. Furthermore, extraordinary logistics-related costs, as a consequence of the congestions and leadtimes in the supply chain combined with a decline in market demand, had a negative impact on the margin. Items affecting comparability totaled SEK -24 m (-6). Amortization of acquisition-related intangible assets totaled SEK -19 m (-16). Operating profit (EBIT) was SEK -105 m (72), corresponding to a margin of -6.6% (4.7%).

FULL YEAR 2022 NET SALES AND OPERATING PROFIT

Segment EMEA reported net sales of SEK 7,970 m (6,981), representing 27% (32%) of Group net sales. Total growth was 14%, of which -2% was organic growth, 5% currency translation and 11% M&A. Net sales growth was driven by application areas Food & Beverage, Climate and Power & Control. The organic net sales decline was driven by lower Service & Aftermarket net sales.

Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 838 m (948), corresponding to a margin of 10.5% (13.6%). The margin was negatively impacted by the sales mix with a lower share of Service & Aftermarket net sales and by inefficiencies in manufacturing. In addition extraordinary logistics-related costs, as a consequence of the congestions and leadtimes in the supply chain combined with a decline in market demand, had a negative impact on the margin. Items affecting comparability totaled SEK -370 m (-28) and were mainly related to activities in the global restructuring programs. Amortization of acquisition-related intangible assets totaled SEK -74 m (-46). Operating profit (EBIT) was SEK 394 m (874), corresponding to a margin of 4.9% (12.5%).

SEGMENT APAC

FOURTH QUARTER 2022 NET SALES AND OPERATING PROFIT

Segment APAC reported net sales of SEK 586 m (546), representing 9% (10%) of Group net sales. Total growth was 6%, of which -2% was organic growth, 8% currency translation and 0% M&A. Net sales growth was driven by application areas Food & Beverage, Climate and Power & Control. The organic net sales decline was due to lower Distribution and Service & Aftermarket net sales.

Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 129 m (149), corresponding to a margin of 22.0% (27.3%). The margin was negatively impacted by currency effects, increased logistic costs and the sales mix with a lower share of Distribution and Service & Aftermarket net sales. Items affecting comparability totaled SEK 0 m (-). Amortization of acquisition-related intangible assets totaled SEK -5 m (-5). Operating profit (EBIT) was SEK 124 m (144), corresponding to a margin of 21.1% (26.3%).

FULL YEAR 2022 NET SALES AND OPERATING PROFIT

Segment APAC reported net sales of SEK 2,231 m (1,961), representing 7% (9%) of Group net sales. Total growth was 13%, of which -4% was organic growth, 9% currency translation and 8% M&A. Net sales growth was driven by application area Power & Control, however all application areas showed net sales growth. The organic net sales decline was mainly due to lower Distribution net sales.

Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 555 m (525), corresponding to a margin of 24.9% (26.8%). EBITA in 2021 was positively impacted by a gain from sale of fixed assets of SEK 21 m. Currency effects had a positive impact on the margin. Items affecting comparability totaled SEK -4 m (-).

Amortization of acquisition-related intangible assets totaled SEK -21 m (-15). Operating profit (EBIT) was SEK 531 m (510), corresponding to a margin of 23.8% (26.0%).

SEGMENT MARINE

FOURTH QUARTER 2022 NET SALES AND OPERATING PROFIT

Segment Marine reported net sales of SEK 1,651 m (1,272), representing 27% (23%) of Group net sales. Total growth was 30%, of which 11% was organic growth, 15% currency translation and 4% M&A. Net sales growth was driven by application areas Power & Control and Climate, however all application areas showed net sales growth. The organic net sales growth was driven by strong development in the OEM sales channel. This was partly offset by lower Service & Aftermarket net sales.

Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 422 m (292), corresponding to a margin of 25.5% (22.9%). The improvement was supported by net sales growth, partly offset by the sales mix with a lower share of Service & Aftermarket net sales. Items affecting comparability totaled SEK 0 m (-1). Amortization of acquisition-related intangible assets totaled SEK -54 m (-44). Operating profit (EBIT) was SEK 368 m (247), corresponding to a margin of 22.3% (19.4%).

FULL YEAR 2022 NET SALES AND OPERATING PROFIT

Segment Marine reported net sales of SEK 6,695 m (5,404), representing 22% (25%) of Group net sales. Total growth was 24%, of which 8% was organic growth, 13% currency translation and 3% M&A. Net sales growth was driven by application area Power & Control. The organic net sales growth was driven by strong development in the OEM sales channel. This was partly offset by lower Service & Aftermarket net sales.

Operating profit (EBITA) before amortization of acquisition-related intangible assets and items affecting comparability was SEK 1,743 m (1,375), corresponding to a margin of 26.0% (25.4%). The improvement was supported by net sales growth and currency effects, partly offset by the sales mix with a lower share of Service & Aftermarket net sales. Items affecting comparability totaled SEK -1 m (-33). Amortization of acquisition-related intangible assets totaled SEK -202 m (-171). Operating profit (EBIT) was SEK 1,541 m (1,171), corresponding to a margin of 23.0% (21.7%).

DOMETIC Q4 REPORT ─ SOLNA, JANUARY 27, 2023 │ 5