Slide 1: Helping to heat homes sustainably
Helping to heat homes sustainably Stelrad Group plc Results for the year ended 31 December 2021
Slide 2: Agenda
Results for the year Agenda • Overview • Financial review • Business review • Summary and outlook Trevor Harvey George Letham • Q&A Chief Executive Officer Chief Financial Officer Stelrad Group plc 2
Slide 3: Overview
Overview Trevor Harvey Chief Executive Officer
Slide 4: 2021 was a pivotal year for Stelrad
2021 results summary 2021 was a pivotal year for Stelrad Good progress across all territories during 2021 Total sales volume up 20% versus 2020 - 9% higher than in 2019 Successful production transfers to low-cost Turkish facility Improved mix of premium steel panel radiators Proactive pric
Slide 5: Financial review
Financial review George Letham Chief Financial Officer
Slide 6: Financial review highlights
Financial review highlights Strong results, ahead of expectations, following successful admission to the London Stock Exchange Revenue Adjusted operating profit Adjusted free cash flow Adjusted EPS £272.3m £33.2m £18.2m 16.92p 2021 272.3 2021 18.2 2021 16.92 2021 33.2 2020 196.6 2020 12.5 2020 4.44
Slide 7: 2021 results overview
2021 results overview 2021 2020 Movement Movement Income statement £m £m £m % Revenue 272.3 196.6 75.7 38.5 Adjusted operating profit* 33.2 15.6 17.6 112.3 Exceptional items (9.6) — (9.6) — Foreign exchange differences 3.0 3.9 (0.9) (23.6) Operating profit 26.6 19.5 7.1 36.0 Net finance costs (10.3)
Slide 8: Revenue
Revenue Substantial organic revenue growth in 2021, increasing by 38.5% to £272.3 million 2021 2020 Movement Movement Revenue by geographical market £m £m £m % UK & Ireland 130.4 89.4 41.0 45.8 Europe 118.1 90.6 27.5 30.4 Turkey & International 23.8 16.6 7.2 43.7 Total 272.3 196.6 75.7 38.5 UK & Ire
Slide 9: Strong growth in core panel and premium panel volumes
Financial review highlights Strong growth in core panel and premium panel volumes with contribution per radiator 4% higher Premium panel radiator Radiator volumes sold volumes sold Contribution per radiator 5,952k units 346k units £13.74 2021 5,952 2021 346 2021 13.74 2020 4,969 2020 300 2020 13.19
Slide 10: Operating profit
Operating profit Adjusted operating profit rose by 112.3% to £33.2 million, with good progress in all territories during 2021 2021 2020 Movement Movement Adjusted operating profit £m £m £m % UK & Ireland 21.6 8.6 13.0 150.5 Europe 12.9 9.8 3.1 31.6 Turkey & International 2.9 1.2 1.7 137.9 Central co
Slide 11: Cash flow
Cash flow Strong cash generation with adjusted free cash flow of £18.2 million 2021 2020 Movement £m £m £’m EBITDA 40.6 23.5 17.1 Gain on disposal of property plant and equipment (0.2) (0.1) (0.1) Working capital adjustments (8.7) 0.8 (9.5) Net capital expenditure (9.9) (9.9) — Adjusted cash flow fr
Slide 12: Capital expenditure
Capital expenditure A six-year, c£25 million programme of incremental investment into Stelrad’s three main operational facilities was completed Capital expenditure * Capital expenditure in the year £8.6m • Turkey: Additional hybrid production line and investment in robotic systems 2021 8.6 • UK: Pro
Slide 13: Net debt
Net debt During 2021, the Group replaced all legacy financing arrangements and shareholder loans, with a new three-year revolving credit facility of £80 million 2021 2020 • As part of the IPO process, the Group repaid all legacy financing arrangements including private equity shareholder loans. £m £
Slide 14: Outlook
Outlook Our outlook for the future Trading since the period end has remained broadly in line with management expectations with some reduction in overall volumes more than offset by increased revenues and improving margins Steel prices stabilised in Q4 2021 Additional selling price increases im
Slide 15: Business review
Business review Trevor Harvey Chief Executive Officer
Slide 16: Our purpose is helping to heat homes sustainably
Our purpose is helping to heat homes sustainably As countries look to decarbonise homes and meet long-term net zero carbon commitments, we have a significant opportunity to help heat homes sustainably and, in so doing, build a stronger business for all Stelrad stakeholders Stelrad Group plc 16
Slide 17: Our competitive advantages – a reminder
Business model Our competitive advantages – a reminder Brand strength Product availability Range innovation Standardised core Stelrad is the number one Stelrad has the largest Stelrad pioneered premium design steel panel radiator brand radiator distribution centres steel panel and vertical The Group
Slide 18: Four key strategic objectives
Strategic objectives Four key strategic objectives 1 Growing share market 2 Improving product mix 3 Optimising routes to market 4 Positioning effectively for decarbonisation • Strive for cost leadership • Accelerate upselling to • Adapt quickly to channel • Maximise sales of current premium steel pa
Slide 19: Our strategic objectives drive range innovation
Innovation Our strategic objectives drive range innovation New, re-engineered Hudevad ranges - Improving product mix • Combines classic Danish Hudevad design with Stelrad’s standardised core heat emitter • Stelrad Group’s premium brand, premium steel panel offer New K3 and vertical radiators - Posit
Slide 20: Decarbonisation
Decarbonisation A supportive regulatory backdrop continues to evolve but decarbonisation initiatives are already underway Delivering on the European Green Deal UK Government Heat and Buildings Strategy Reduce net greenhouse gas emissions by ≥ 55% by 2030 Reduce net greenhouse gas emissions by ≥ 78%
Slide 21: Sustainability
Sustainability Developing an ESG strategy based on four key pillars will enable us to fulfil our purpose over the long-term Supporting the future Minimising our Building an exceptional Maintaining high of home heating environmental impacts workplace standards of business We design home heating We re
Slide 22: Summary and Outlook
&Stelrad Group plc Summary and Outlook
Slide 23: Summary
Summary Strong results, ahead of expectations… • Delivery across all key metrics • Ongoing operational improvements provide a solid foundation for the future • IPO has enhanced our profile and provided platform for growth …combined with positive outlook… • Trading since the period end has remained b
Slide 24: Questions
&Stelrad Group plc Questions
Slide 25: Appendices
&Stelrad Group plc Appendices
Slide 26: Managing Steel Price Dynamics
Steel prices Managing Steel Price Dynamics Group - Steel price movements £14.00 • Steel is the key raw material for radiators and made up c.39% of the Group’s cost of £12.00 sales in the period 2015 to 2020 £10.00 • The Group has an excellent track record in consistently passing steel price increase