Slide 1: Strategy continuing to deliver with outlook for the full year unchanged
Strategy continuing to deliver with outlook for the full year unchanged Stelrad Group plc Results for the six months ended 30 June 2023
Slide 2: Agenda
RESULTS FOR THE PERIOD Agenda • Overview • Financial review • Business review • Summary and outlook • Q&A Trevor Harvey George Letham Chief Executive Officer Chief Financial Officer Stelrad Group plc 2
Slide 3: Overview
Overview Trevor Harvey Chief Executive Officer
Slide 4: Robust performance in the face of challenging market conditions
2023 INTERIM RESULTS SUMMARY Robust performance in the face of challenging market conditions • Record first half revenue helped by contribution from DL Radiators acquisition • Anticipated fall in like-for-like revenues against strong first half 2022 comparatives • Increased contribution per radiator
Slide 5: Financial review
Financial review George Letham Chief Financial Officer
Slide 6: Delivering results in line with expectations
FINANCIAL REVIEW HIGHLIGHTS Delivering results in line with expectations • Sales and adjusted operating profit in line with expectations Revenue (pre-IAS 29): £157.0m (2022: £147.8m) • Revenue (pre-IAS 29 in 2022) grew by 6.2% (12.7% decline on a like-for-like basis) • Contribution per radiator (pre
Slide 7: Strong growth in contribution per radiator helps to offset impact of lower sales volume
FINANCIAL REVIEW HIGHLIGHTS Strong growth in contribution per radiator helps to offset impact of lower sales volume Radiator volumes sold Premium panel radiator volumes sold Contribution per radiator (pre-IAS 29) 2,622k units 154k units £17.66 HY23 2,622 HY23 154 HY23 17.66 HY22 2,710 HY22 155 HY22
Slide 8: Revenue growth despite challenging market conditions supported by the acquisition of DL Radiators
REVENUE Revenue growth despite challenging market conditions supported by the acquisition of DL Radiators H1 2023 H1 2023 H1 2022 Movement Movement Revenue (pre-IAS 29) by geographical market £m % of total £m £m % UK & Ireland 70.1 44.7 70.6 (0.5) (0.7) Europe 76.5 48.7 63.6 12.9 20.3 Turkey & Inter
Slide 9: Adjusted operating profit remains in line with expectations
OPERATING PROFIT Adjusted operating profit remains in line with expectations H1 2023 H1 2022 Movement Movement Adjusted operating profit by geographical market £m £m £m % UK & Ireland 11.5 12.3 (0.8) (6.5) Europe 4.9 7.5 (2.6) (34.7) Turkey & International 0.7 2.0 (1.3) (65.0) Central costs (3.1) (2
Slide 10: Improvement in free cash flow generation due to proactive working capital management
CASH FLOW Improvement in free cash flow generation due to proactive working capital management H1 2023 H1 2022 Movement £m £m £m EBITDA (1) 19.7 22.5 (2.8) Exceptional items (0.1) - (0.1) Gain on disposal of property, plant and equipment - (0.2) 0.2 Share-based payment charge 0.3 0.1 0.2 Working cap
Slide 11: The Group's net debt has remained stable despite seasonal working capital demands
NET DEBT The Group’s net debt has remained stable despite seasonal working capital demands 30 June 2023 31 December 2022 £m £m Revolving credit facility - GBP 56.4 55.3 Revolving credit facility - Euro 10.3 10.6 Term loan 24.3 25.1 Cash (20.6) (22.6) Net debt before lease liabilities 70.4 68.4 Lease
Slide 12: Continuing to trade in line with expectations
TECHNICAL GUIDANCE Continuing to trade in line with expectations • Sales volumes anticipated to remain subdued in the remainder of 2023 • Contribution per radiator in H2 2023 expected to benefit from lower steel and energy costs • Leverage expected to reduce to below 1.5x EBITDA by year end after se
Slide 13: Business review
Business review Trevor Harvey Chief Executive Officer
Slide 14: Stelrad's four key strategic objectives are underpinning our progress
STRATEGIC OBJECTIVES Stelrad’s four key strategic objectives are underpinning our progress Growing market share 1 Improving product mix 2 Optimising routes 3 Positioning effectively 4 to market for decarbonisation • Strive for cost leadership • Accelerate upselling to • Adapt quickly to channel • Ma
Slide 15: We are now the European market leader in steel panel radiators for the first time
GROWING MARKET SHARE 1 We are now the European market leader in steel panel radiators for the first time • Between 2020 and 2022, Stelrad share increased by 2.2 ppts, from 16.3% to 18.5% • Stelrad Group now leads the European steel panel radiator market • Our traditional Western European competitors
Slide 16: Beyond traditional core markets, Stelrad continues to gain traction
GROWING MARKET SHARE 1 OPTIMISING ROUTES TO MARKET 3 Beyond traditional core markets, Stelrad continues to gain traction • In Germany, Stelrad moved from #5 to #3 with the acquisition of DL Radiators, 4.1 ppts gain in 2022 #3 • In Sweden, Stelrad consolidated its #2 position with 2.7 ppts organic sh
Slide 17: Stelrad improved product mix HY 2023 despite the challenging economic climate
IMPROVING PRODUCT MIX 2 OPTIMISING ROUTES TO MARKET 3 Stelrad improved product mix HY 2023 despite the challenging economic climate • All product mix indicators show year-on-year progress since 2021 • HY 2023 premium steel panel radiator mix of total volume grew by 0.4 ppts to 5.9% • Premium steel p
Slide 18: Leading product availability and customer service drive Stelrad's competitive advantage
OPTIMISING ROUTES TO MARKET 3 Leading product availability and customer service drive Stelrad’s competitive advantage • In the UK, On Time In Full (OTIF) delivery is currently c 98% • Stelrad now offers 48-hour availability for premium steel panel and design radiators • Stelrad has the largest radia
Slide 19: Stelrad is innovating to meet growing demand for low and zero carbon heating
POSITIONING EFFECTIVELY FOR DECARBONISATION 4 Stelrad is innovating to meet growing demand for low and zero carbon heating • We continue to develop and expand our portfolio, working with specifiers to support transition to low temperature systems • K3 • Triple panel, triple convector radiators • Ver
Slide 20: H2 2023, Stelrad will launch its first UK range of electrical radiators
POSITIONING EFFECTIVELY FOR DECARBONISATION 4 OPTIMISING ROUTES TO MARKET 3 H2 2023, Stelrad will launch its first UK range of electrical radiators • An innovative range of 64 heat emitters, including towel warmer, aluminium and designer ranges for the UK’s growing electrical radiator market • Q2 20
Slide 21: Summary and outlook
Summary and outlook Trevor Harvey Chief Executive Officer
Slide 22: Stelrad's four key strategic objectives continue to provide clear direction
STRATEGIC OBJECTIVES Stelrad’s four key strategic objectives continue to provide clear direction Growing market share 1 Improving product mix 2 Optimising routes 3 Positioning effectively 4 to market for decarbonisation • Strive for cost leadership • Accelerate upselling to • Adapt quickly to channe
Slide 23: Unchanged full year outlook and confidence in long-term growth plans
SUMMARY Unchanged full year outlook and confidence in long-term growth plans Robust performance for the period despite market headwinds • Resilient business model enables us to navigate challenging markets • Experience of trading through previous downturns • Favourable geographic mix Adapted to chal
Slide 24: Questions
@Stelrad Group plc
Slide 25: Appendices
@Stelrad Group plc Appendices
Slide 26: Helping to heat homes sustainably is Stelrad's core purpose
SUSTAINABILITY Helping to heat homes sustainably is Stelrad’s core purpose • Stelrad Group is fully committed to high standards of corporate responsibility, sustainability and employee engagement • Long-term success depends on proactively addressing sustainability challenges and considering the impa
Slide 27: Consolidated income statement summary
CONSOLIDATED INCOME STATEMENT SUMMARY H1 2023 H1 2022 Movement Movement £m £m £m % Revenue 157.0 150.1 6.9 4.6 • FX movements are less significant following the Revenue (pre-IAS 29) 157.0 147.8 9.2 6.2 change in the functional currency of the Group’s Turkish subsidiary to Euro Adjusted operating pro
Slide 28: Consolidated balance sheet summary
CONSOLIDATED BALANCE SHEET SUMMARY 30 June 31 December 30 June 31 December 2023 2022 2023 2022 £m £m £m £m Non-current assets Non-current liabilities Property, plant and equipment 88.7 91.6 Interest-bearing loans and borrowings 99.3 98.5 Intangible assets 5.2 3.9 Deferred tax liabilities 0.2 2.6 Tra
Slide 29: Consolidated statement of cash flow summary
CONSOLIDATED STATEMENT OF CASH FLOW SUMMARY 30 June 30 June Increase / 2023 2022 (decrease) £m £m £m EBITDA (1) 19.7 22.5 (2.8) Exceptional items (0.1) - (0.1) Gain on disposal of property, plant and equipment - (0.2) 0.2 Share-based payment charge 0.3 0.1 0.2 Working capital (adjusted for foreign e