Strix Group Plc · LSE:KETL
Strix — H1 2020 Earnings Presentation
28 slides from Strix's earnings presentation, September 2020
Slide 1: Investor Presentation Half Year Results
Investor Presentation Half Year Results Period ended 30 June 2020 This document is the property of Strix Ltd and the information contained is CONFIDENTIAL. The drawings and information may not be reproduced or used without the prior written consent of Strix Ltd. The designs and concepts herein are p
Slide 2: Agenda
Agenda Investor Presentation - Interim Results 2
Slide 3: Agenda
Agenda • Another solid performance with full year profitability remaining flat in line with previous guidance • New factory progressing well in Guangzhou, remaining on budget and on target to be fully operational by August 2021 • 14 new products ready to be launched by the end of 2020 Interim result
Slide 4: Managing through the pandemic
Managing through the pandemic 300 hrs Direct support COMMUNITY Strix’s Community projects SECOND WAVE – SCENARIO Support PLANNING Spent protecting OUR 700hrs workforce globally EMPLOYEE FOCUS Direct Sourcing of PPE • Continue focus on employee mental and physical well- Approached by local Government
Slide 5: Financials
Financials Period ended 30 June 2020 Investor Presentation - Interim Results 5
Slide 6: Half Year Financial Highlights
Half Year Financial Highlights Revenue £m Adjusted Gross Profit1 £m Adjusted EBITDA1 £m -21.0% -17.6% -8.6% H1 2020 34.7 H1 2020 13.8 H1 2020 13.6 H1 2019 43.9 H1 2019 16.7 H1 2019 14.9 H1 2018 42.9 H1 2018 16.3 H1 2018 14.8 H1 2020 Sales were down 21% versus PY in Strategic cost saving initiatives
Slide 7: Half Year Profit and Loss Summary
Half Year Profit and Loss Summary £m H1 2020 H1 2019 % Change2 Commentary Revenue 34.7 43.9 -21.0% Revenue: £9.2m decrease H1 sales down by 21% due to COVID-19 Adjusted Gross profit1 13.8 16.7 -17.6% disruptions, in line with scenario planning Other operating costs: (3.5) (4.8) -26.6% Adjusted gross
Slide 8: Half Year Cash Flow
Half Year Cash Flow 0.0 Net debt £36.9m (5.0) FY 19: £26.3m (10.0) FINANCING Adjusted EBITDA & TAX NET WORKING £13.6m CAPITAL HY 19: £14.9m (15.0) £26.3m EXCEPTIONAL Net Debt & OTHER £36.9m 2019 Net Debt Capital 2020 expenditure (20.0) £13.6m ADJ EBITDA CAPEX £7.0m £7.0m HY 19: £5.8m (25.0) Exceptio
Slide 9: Net Debt Inclusive of Laica Acquisition
Net Debt Inclusive of Laica Acquisition Net Debt¹ £m Net debt¹ /adjusted EBITDA £m Cash and facility headroom £m ⁴ ³ GROUP FY20 ⁴ circa £ 33.4 m GROUP FY20 c.£53m GROUP FY20 1.4x STRIX H1 £ 23.1 m H1 £36.9m STRIX H1 1.1x Estimated Group net debt, inclusive of £6.4m earn-out subject to financial perf
Slide 10: Expecting to deliver FY PBT in line with last year
Expecting to deliver FY PBT in line with last year H1 Gross Profit loss (£2.9m) Q3 YoY GP VAR Q4 YoY GP VAR H1 Overhead (£0.8m) savings H2 YoY GP VAR H1 YoY GP VAR £2.6m (£0.4m) £1.5m Q3 YoY Gross £30.2m (£2.9m) H1 OVERHEADS c.£30.2m profit variance Forecasted Adj. Adj. PBT 2019 PBT 2020 £2.6m £1.5m
Slide 11: New Factory
New Factory Milestones • The main build construction completed in July • Factory move to be completed by July 2021 • Electronic installation and inner building work • Fully operational in August 2021 is in progress • Target to complete all the construction work • Project continues to run on schedule
Slide 12: Investment Proposition
Investment Proposition The stability of the Strix business model allows us to continue to invest to realise full growth potential •Operating capital expenditure of £7m in H1 2020 demonstrates Strix’s continued investment in 1 its manufacturing and development assets to support our strategic growth o
Slide 13: Sustainability Overview and Actions
Sustainability Overview and Actions Internal operations Current actions External / products Plans Energy efficiency Electricity intensity improved Increased automation Hot water on demand Develop additional hot 3% in 2019 New Chinese facility applications and Duality water on products based Extend I
Slide 14: Category Overview
Category Overview Investor Presentation - Interim Results 14
Slide 15: Kettle Control Business
Kettle Control Business • Maintained stable market value share Quarterly Revenue Trends £m £30.1 m • Continue to support Brands, Retailers and OEM’s providing value added services throughout the value chain H1 sales 30.0 24.1 • Record order book for Q3 +26% versus Q3 19 25.0 • Forecasted sales for Q
Slide 16: Kettle Control Business: Roadmap
Kettle Control Business: Roadmap 2020 2021 & beyond Full roll-out of Extend UHS Next Gen EK High Power Extend StrixVQ Next Gen of Next generation control StrixVQ and product line: control for glass Control for NAM brand with split StrixVQ controls & element. Other initiatives U9 series custom soluti
Slide 17: Water Category
Water Category Quarterly Revenue 3.5 Trends £m £5.3 m • • Water category exhibited solid performance in Q1 Lumi Chiller sales +1200% increase from 2019 3.0 3.0 H1 sales • Investment in category management to 3.0 increase focus on consumer needs 2.5 2.0 2.3 28% • • • Strong order book for Q3 +28% fro
Slide 18: Water Category: Roadmap
Water Category: Roadmap Our ambition in the water category is to deliver point-of-use drinking water solutions that give consumers the power to take control of their water, and reduce their consumption of single use plastics. 2020 2021 & beyond Launch Aurora water station, Next generation filters Ex
Slide 19: SDA Category
SDA Category 0.4 Quarterly Revenue Trends £m £0.5 m • Ongoing strong demand in baby care products • Increased consumer demand for water stations 0.4 H1 sales 0.3 0.4 0.3 0.3 94% • Strong order book for Q3 +94% from Q3 19 • Forecasted sales for Q3 £0.4m Q3 forecasted sales 0.2 growth 0.2 • Expansion
Slide 20: Small Domestic Appliances: Roadmap
Small Domestic Appliances: Roadmap Our mission is to deliver desirable, innovative, easy to use and eco-friendly appliances that take the frustrations out of everyday tasks. 2020 2021 & beyond Cordless Iron Next Generation Aurora Tommee Tippee New heavy duty Kettle Launch of “Boil & Day & Night True
Slide 21: Short Term Roadmap and Outlook
Short Term Roadmap and Outlook Investor Presentation - Interim Results 21
Slide 22: Business Outlook 2020
Business Outlook 2020 Despite economic uncertainty and global volatility driven by Brexit, COVID-19 and USA/China trade tensions, the Group has remained resilient. We will continue to focus on key strategic objectives whilst continuing to deliver on our strategy to create value for our shareholders.
Slide 23: Acquisition of LAICA S.p.A
Acquisition of LAICA S.p.A Investor Presentation - Interim Results 23
Slide 24: LAICA S.p.A
LAICA S.p.A • Italian specialist company focussed on the production of small household appliances for personal health and wellness and water purification Overview • Established in 1974, headquartered in Vicenza, Italy, additional manufacturing operations in China through joint ventures Currency: €m
Slide 25: Transaction Overview
Transaction Overview • Initial consideration of €19.6 million (6.8x FY19 Adj. EBITDA) and €31.6m including earnout (10.9x FY19 Adj. EBITDA) • Initial consideration funded €11.6 million in cash by extending current banking facilities and €8.0 million in Strix Consideration ordinary shares • Up to a f
Slide 26: Transaction Rationale
Transaction Rationale 1 Strengthens Strix’s market position within the Water category, providing a global platform to facilitate future growth 2 Earnings enhancing, enhancing in advance of synergy benefits, with leverage on completion expected to be c.1.4x net debt to Adj. EBITDA 3 Complementary pro
Slide 27: Products
Products Established product range and an advanced new product roadmap Water Category SDA Category Personal Vacuum Kitchen Care Sealers Appliances New Product Development New products ready to launch will accelerate growth opportunities across category Investor Presentation - Interim Results 27
Slide 28: Synergies
Synergies • Expansion of LAICA’s revenue mix using Strix’s global marketing and sales network Revenue Cross- Cross- synergies selling • Cross-selling and up-selling of Aqua Optima and LAICA’s established product range and NPD roadmap Marketing • Consolidation of marketing expertise significantly exp