This summer Fluidra celebrated the fifth anniversary of its largest acquisition, that of the American company Zodiac, which opened the door to the Ibex, but the company has made further acquisitions between 2020 and 2022, with more than a dozen between 2020 and 2022, to maintain its leadership position to consolidate internationally in the pool business and plans to continue to do so in order to continue to grow once the market normalizes following the impact of the pandemic and the war in Ukraine.
How did the summer season work?
The season is now starting in the southern hemisphere, but in the north it has been in line with the expectations we share with the market. It is a year of strong growth and Covid momentum due to increasing demand and shortages of components and products, as in many industries, which led to the channel accumulating inventory to be able to offer services. In addition, the rise in interest rates for new construction has influenced demand. That’s why in July we announced an adjustment to the forecasts for this year at the lower end of the range.
How does climate change affect us?
The bathroom continues to be a climatic refuge. With longer summers and more intense heat waves, the pool almost plays a role in physical and mental health. It is also true that water consumption due to droughts needs to be monitored. The pool is a very visual element that gives the impression of wasting water, but if you look at the numbers it’s not that much because it is a closed circuit that only loses water through evaporation and cleaning the filters, and There are technologies that can reduce 80% of these losses. For example, in France, which has banned swimming pools, the consumption of all French swimming pools does not reach 0.15% of the country’s total consumption. In addition, the pool can also play a role in energy conversion and self-consumption by reusing rainwater and gray water from the house if well regulated. Later, even the pool can play a reserve role. Consumption is efficient and you can do more.
What role can you play as a reserve?
It may not be used for oral use but can be used for other household purposes and in extreme cases can cover a family’s consumption for months, but that is the future. I can’t imagine being without swimming pools this summer. And the alternative is even worse from an efficiency perspective: much more water is used when bathtubs and showers are repeatedly filled. Over the years we have experienced droughts in many places, with short-term measures taken by public administrations, but in very few places long-term measures are taken because when it rains everyone forgets. We have an opportunity to address this problem, and there are technologies that can deliver transformation with impact.
What are the prospects for the second half of 2023 and 2024?
We don’t know any timelines, but it is a healthy sector and after inventory adjustments and new construction resumes, it will grow again at 3-4%. The momentum of the commercial pool is good as tourism has been reactivated while new construction is still suffering, but it is driving forward positively that the pool park has grown and requires maintenance.
What relevant investments do you have underway?
Now we have a lot in logistics, with the new warehouse in Sant Feliu de Buixalleu (Girona), a new logistics center in France with GXO, improvements in the support warehouse in Northern Europe and also in Maçanet (Girona). And after the growth of the last few years, we are also investing time and money in increasing efficiency.
The markets have appreciated that the margin improved despite falling profits in the first half of the year…
You have seen the results of the efficiency plan and the possibility of passing inflation onto the final price. And the bottom of the adjustment is already visible after the post-pandemic growth.
Is the Russian divestment still pending?
Like many companies, we made the decision to leave the country a long time ago, at the start of the war, but we are trapped in the system. We agreed to sell the subsidiary to the local team who would focus on the sales side as we did not have an industrial business. The number of employees is around 50 and the business volume is only 0.5% of the group’s total turnover.
And when will the new strategic plan come?
However, once inflation is under control, the strategic lines do not change, with two major opportunities: sustainability and digitalization, to achieve the Smart Pool, a pool that is always prepared and with low electricity and water consumption. Another part of the plan is to further increase efficiency and increase market penetration.
Will shopping continue?
Acquisitions are part of our strategy, although we are now more focused on cash generation. We have debt ratios that we think are high because we like to be between 2 and 2.5 times EBITDA, but we have very well-structured debt and we are bringing it down. Although this multiplier has not yet shone this year, we reduced debt by 180 million in the last quarter, and the trend is good. We are focused on balancing the balance sheet but continue to work on the acquisition pipeline.
In what and where?
There are opportunities in digital and sustainability issues, in public swimming pools, in Central and Northern Europe, the USA and also in South America and Australia. We will continue to strengthen ourselves.
