FLUIDRA, S.A. 2023
INTEGRATED ANNUAL REPORT
Reshaping the future of the pool
Integrated Annual Report 2023
STRUCTURE OF THE REPORT
CONSOLIDATED | ||
ANNUAL | ||
ACCOUNTS |
Annual | |||
Corporate | Annual Report on | ||
Sustainability | Governance | Compensation of | |
Report | Report | Directors |
1. Fluidra today | 2. Leading the pool |
and wellness | |
business |
1. We create the perfect pool & wellness experience in a responsible way
2. Contributing to | 3. Advancing our | 4. We improve | 5. Committed to | 6. Appendices |
sustainable | vision of a positive | people's well-being | best governance | |
development | pool | practices |
Integrated Annual Report 2023 | 2 |
CONSOLIDATED MANAGEMENT REPORT 2023
This document is the Consolidated Management Report of Fluidra S.A. and its subsidiaries (listed in Appendix I of the Consolidated Financial Statements) for business year 2023, between January 1, 2023 and December 31, 2023.
CONSOLIDATED MANAGEMENT REPORT
Letter from the Executive Chairman
Message from Bruce Brooks, CEO
- Fluidra today
- Fluidra at a glance Fluidra in the world Main milestones in 2023
- One Fluidra, one culture
- Integrated business model Products and solutions Our value chain Business lines
- Leading the Pool and Wellness business
-
Financial results
Overcoming a year of division and uncertainty Overall financial results
Simplification Program Results by geographic area - Analysis of the financial position Financial position Investments
-
Shareholding structure and shareholder returns Shareholding structure and shareholders agreements Stock market information
Investor and shareholder relations - Alternative Performance Metrics
Sustainability report
- We create the perfect pool and wellness experience responsibly
- Fluidra's Commitment to Sustainability
-
Responsibility Blueprint: our roadmap
Main metrics and objectives linked to the Responsibility Blueprint
Our commitment to the Sustainable Development Goals Raising awareness on our commitments - Relationship with stakeholders
- Sustainability indexes and recognitions
-
Partnerships
Membership of organizations Sports sponsorships
Other partnerships
- Contributing to sustainable development
Key figures
Environmental Management
Environmental Management System
Raw materials and waste management
Biodiversity
2.2. Climate Change Governance
Climate Change Strategy Climate risk management Metrics and targets
2.3. Water
Integrated Annual Report 2023 | 4 |
Consolidated Management Report
- Advancing our vision of a positive pool
- Defining the Positive Pool Inclusive access and use Safety and health Environmental sustainability
-
Promoting sustainable products Life Cycle Assessment (LCA)
Product development and sustainable production Efficiency in Pool Use and Maintenance Phase Circularity of products and materials used - Product Innovation
- Connected Pool
- Quality management
- Product compliance and safety Product compliance Product safety
- We improve people's well-being
Key figures
- We stand up for Human Rights Our commitment to Human Rights Ensuring Due Diligence Grievance mechanisms
- Keeping the best team You make us grow Generating quality employment Diversity, Equity and Inclusion Talent and Development Compensation and benefits
-
Health, Safety and Well-being Health & Safety Management System Risk identification and assessment Workforce engagement
Training and awareness-raising Incidents and absenteeism - Committed to the Community Social action at Fluidra Fluidra Foundation
Integrated Annual Report 2023
5. Committed to the best governance practices Key figures
5.1. Governing bodies
General Shareholders' Meeting
Board of Directors
Board Committees
Executive Committee (MAC)
Remuneration Policy for Governing Bodies
- Risk and Opportunity Management Corporate risk map
- Ethics and integrity
We promote an ethical behaviour
Criminal risk prevention and control model
-
Responsible Supply Chain Management Juggling geopolitical upheavals
Key figures in our supply chain Advancing shared values
Working on continuous improvement - A customer-centric model
Distribution network Voice of the Customer
5.6. Tax
Tax strategy Tax contribution Grants received
- Information Security and Cybersecurity Cybersecurity
Personal data protection
6. Appendices
- About this report
- Materiality assessment
- Data tables
- Table of contents according to sustainability reporting standards
- Table of contents of Act 11/2018
- Table of contents according to TCFD
- EU Sustainable Finance Taxonomy
- Compliance with corporate loan objectives
- External assurance report
Annual Corporate Governance Report Annual Report on Compensation of Directors
5
Consolidated Management Report Letter from the Executive Chairman
Letter from the Executive Chairman
GRI 2-22
Dear Fluidra friends,
If I were to encapsulate our 2023 in one word, it would be "transformation". Externally, there's no denying that geopolitical and economic uncertainty has had a significant impact on a global scale and at every level. Internally, we've diligently strived to overcome challenges and glean lessons from them to come out stronger on the other side.
Using a weather analogy, we encountered gusty winds and intermittent fog that made it tough to see as we embarked on our 2023 journey. However, thanks to intense efforts to bolster our foundations, the clouds cleared and we reached the end of the year stronger, more resilient and with clear skies ahead.
The results of our journey have been truly encouraging. Despite experiencing a decrease in demand for new pool construction and inventory adjustments in the channel this past year, we've hit €2,051 million in sales and €445 million in EBITDA, improving our margins. We also have two new acquisitions (Meranus and Kerex) and a strong product portfolio. On the back of this performance, the Board of Directors is pleased to recommend, subject to shareholder approval, a dividend of €0.55 per share, payable in the second half of 2024.
I know for a fact that all of this has been made possible thanks to the efforts of every single one of our professionals at Fluidra.
Together, we've worked tirelessly and with a shared purpose: to maintain our position as leaders in the pool and wellness market, a feat we've once again achieved this year, which is why I'd like to extend my heartfelt thanks to our suppliers, customers, investors, users, and, of course, our entire workforce. I take immense pride in being part of such a skilled and committed professional family.
Continuing to reshape the future of the pool
Our focus on innovation and transformation has been pivotal throughout the year. We've strived to become a more efficient organization economically-our Simplification Plan alone has resulted in savings exceeding 30 million euros-and we've continued our efforts in sustainability, advancing our positive pool concept.
We have our eyes set on reshaping the future of pools, beyond their core social function as community and health centres, positioning us as key players in preserving water as a fundamental human resource, not only in regions like ours, which are particularly susceptible to climate change, but everywhere we operate. We want Fluidra pools to serve as tools for sustainability, and we're actively laying the groundwork for this vision.
Integrated Annual Report 2023 | 7 |
On this journey, we strive every day to take fresh steps toward the smart pool concept, one that's increasingly more environmentally responsible. This involves identifying technologies and product features that align with our commitment to environmental sustainability. It is no small wonder that we find ourselves in the era of technological transformation, and Fluidra is embracing this reality. We're determined to stay at the forefront of innovation by embracing new challenges that make it possible. We can see that connectivity, digitalization and artificial intelligence holds the potential to deliver a host of benefits, like helping us predict trends, implement best practices, respond to demand fluctuations, identify customer needs, make informed decisions, optimize our production processes, and reduce resource consumption.
Moving forward on our sustainability commitments
In 2023, our Sustainability Policy, underpinned by our Responsibility Blueprint, continued to reach new heights. This year, we successfully decreased the carbon footprint of our operations by 43%, while sales of sustainable products accounted for 51% of our total sales.
On the social front, in 2023 we continued to improve people's well-being across a number of areas. Aligned with our commitment to achieving gender wage parity by 2024, we made significant progress this year by narrowing the gap to just 1.7%. And one more milestone. As part of our Diversity, Equity, and Inclusion policy, in the last 4 years, we have proposed appointing 4 new female board members, until reaching 28.6% of women on the board.
Through Fundació Fluidra, a cornerstone of our social initiatives, we achieved a remarkable feat: bringing a mobile pool, constructed from a recycled container, all the way from South Africa to the Pool & Wellness Fair celebrated in Barcelona in November. Beyond the buzz it generated at the fair, this innovative project, spearheaded by the National Sea Rescue Institute (NSRI) in collaboration with Fluidra, seeks to extend the benefits of pools and swimming to the most vulnerable communities, with the ultimate goal of preventing drowning incidents. We take immense pride in this achievement.
Moving into 2024 with ethics and transparency
The groundwork laid in 2023 instils us with the confidence that we're prepared and ready for the future. Our business continues to grow and we trust that we have the ability to sustain growth while continuing to responsibly design the ultimate pool and wellness experience.
Looking ahead, we can highlight three key areas of opportunity: sustainability, technological transformation, and continuous improvement.
Sustainability. Beyond our positive pool concept and our full dedication to our Fluidra family, sustainability extends to due diligence in the supply chain. To that end, our aim is to establish and enhance ethical and transparent practices to meet society's growing demand for products sourced from responsible supply chains.
Technological transformation obviously represents a major opportunity that we intend to seize. The evolution towards connected, smarter, more intelligent, automated, and efficient pool and data management is a hallmark of our identity and one we will continue to explore as we move forward into 2024. Innovation stands as one of our most cherished corporate values.
Continuous improvement. We are a global company, the only one in our industry, which is both complex and challenging. Our integrated business model, coupled with our extensive experience, gives us the know-how and expertise to continuously improve processes and operations for the benefit of all our stakeholders. Our simplification program remains pivotal in driving us towards becoming a stronger, more agile, digital, and sustainable company.
In closing, I want to say that despite the ongoing uncertainties in the macroeconomic landscape, we are entering this new year with confidence. Over the past four years, our estimates show that the global pool installed base has grown by more than two million new residential in-ground pools. We firmly believe that the need to maintain this installed base will support increased and more stable demand for our products. This growth outlook positions us to take on 2024 with our characteristic humility, expertise, and hard work.
Once again, both in my capacity as chairman and on a personal level, I sincerely thank the entire Fluidra family for their efforts. I call on each of you to join us in 2024 as we continue to shape the future of the pool industry.
Eloy Planes
Executive Chairman
Integrated Annual Report 2023 | 8 |
Well, 2023 was quite a year, with a difficult macroeconomic environment and geopolitical tensions; as well as more specifically in your sector, de-stocking in the channel. How was it from your perspective?
Answer: There's no doubt 2023 had immense challenges, but I could not be prouder of what we accomplished. The entire Fluidra team stepped up, and because of their extraordinary resilience and drive to succeed, we came through 2023 as a much stronger team and a stronger business. I can not thank the team more for their efforts.
Indeed, the surplus of inventory in the channel made it difficult to navigate in 2023; this was not unique to our industry. In looking at our performance, sales reached €2,051 million-which was down on the prior year-but EBITDA was €445 million; a 21.7% margin compared to 21.4% in the prior year. The fact we were able to expand our EBITDA margin amid lower sales demonstrates the strength of our business model. Our focus on serving customers, the actions we took on price to recover costs, and the successful execution of our Simplification Program were all key components in our performance. The aftermarket, which represents the majority of our demand, proved to be resilient.
Furthermore, we reduced both working capital and net debt levels. Operating net working capital as a percentage of sales was 18.2%, an improvement of 560 basis points compared to the end of December 2022. Our leverage ratio stood at 2.6x, having completed two acquisitions and distributed €134 million in ordinary dividends. The acquisition of Meranus enhances our leading position in the German market (the 3rd largest in Europe) to offer a more comprehensive product portfolio to a wider customer base.
We also made strides on the sustainability front. Sales of sustainable products represented 51% of sales, above the objective we had set for the year, and we reached our 2023 target to source more than 86% of electricity from renewable sources- substantially reducing our carbon footprint.
Our commitment to equality has achieved similar success. We believe in equal pay for equal work between men and women and we made tremendous progress in 2023 to reduce the gender wage gap. We continue to foster a culture where our employees are highly engaged and actively contributing to our success. It's no doubt they are a competitive advantage- enabling us to tackle the biggest challenges of today and capture
Integrated Annual Report 2023 | 9 |
the best opportunities of tomorrow. These efforts have been recognized by ESG rating agencies with CDP upgrading us to A-, and, leading the pool sector, we have been included for a second year in the S&P Sustainability Yearbook, which distinguishes the best sustainability performers in their sectors.
For me, 2023 was a foundational year for a stronger future.
What stands out for you as a key to your performance in 2023?
A. First, to put it simply, it all comes down to our customers. When we focus on what our customers need, everything follows: high-quality products, exceptional service, and reliable availability. Our teams work hard to deliver what our clients expect from us. We are a reliable business partner, even in tough environments, and they recognize that, so much so, we managed to take market share during the year.
As a testament to this customer-centric approach, we have been awarded "Vendor of the Year" by the three largest distributors in North America for the three consecutive years-a first in our industry. We were awarded POOLCORP's first-ever "Innovative Vendor of the Year Award" for our groundbreaking innovations in pool cleaning and lighting with our first-ever cordless robotic pool cleaner, the Polaris® FREEDOM™, and our all-new Jandy® Infinite WaterColors Pool Lights.
Secondly, the Simplification Program was also key. It is more than a cost-cutting exercise, it really drives our transformation and has allowed us to build a platform that will take the company to the next level. We've already begun to reap the rewards of these efforts. We are strengthening the business for the long term. And the best is yet to come!
2023 was a foundational year for a stronger future
How do you see the future of Fluidra?
A. Let me first put 2023 performance into perspective: we are a stronger business today compared to 2019. Our sales are 50% higher while our EBITDA margin has expanded 200 basis points. Thanks to our strong cash generation profile, we have reinvested in the business to reinforce our global leadership position.
We closed 2023 within our expectations. While the macroeconomic environment remains uncertain, we expect our industry will continue its path towards more normalized patterns in 2024, now that the inventory correction is behind us.
Our future is exciting. The ever-growing residential installed base has reached 19 million pools worldwide, which will all inevitably need some recurring maintenance and equipment upgrades. We have the broadest geographic footprint, where we have access to all markets for growth and diversification. We are leaders in innovation, driving our industry to meet the ever-growing demands of its customers. We've strategically balanced our cost- restructuring initiatives with a focused R&D approach to enhance our product offering and expand our portfolio. We will continue to focus on growing our strong platform over the mid- term for further value creation.
As technology advances, the connected pool will continue to outpace the market and we will be right there with solutions to satisfy the increasing expectations of pool professionals and owners alike. We look to simplify pool management and improve business efficiency for the pool professional while, at the same time, create an easier and more enjoyable pool experience for the end users.
All-in-all, we are well-positioned to continue leading the market with our broad product portfolio, our customer-centric focus and our commitment to providing the highest quality equipment and services. We will lead the way in creating the connected experience while creating more sustainable pools. And finally, our Simplification Program to transform Fluidra will further enhance our margins, making us a more efficient organization.
We are reshaping the future of the pool.
Integrated Annual Report 2023 | 10 |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Fluidra SA published this content on 20 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 March 2024 10:06:10 UTC.
